IATA stated (16-Jan-2019) "the future of India's air transport industry is bright. However, this does not mean that the future flightpath will be without turbulence". According to the latest forecasts from IATA/Tourism Economics, "demand for air travel to, from and within India" will increase at an average rate of 6.1% p/a over the next 20 years, expanding to close to 520 million passengers p/a by 2037, up by 359 million passengers p/a from 2017. IATA expects domestic passengers to "account for around 63% of the total growth over this period, or 228 million additional passengers". Higher income driven improvements in living standards in India are expected to contribute 5.1% of the 6.1% p/a increase in air travel demand, while "favourable population and demographic factors are forecast to contribute 0.6%". IATA projects India will overtake Germany, Japan, Spain and the UK to become the third largest air traffic market worldwide within the next 10 years and "will hold this position through to the end of our forecast horizon in 2037". [more - original PR]
Thai AirAsia is launching four new routes from Chiang Rai in northern Thailand at the end of Jan-2019 and the beginning of Feb-2019. Chiang Rai will become Thai AirAsia’s sixth hub after Bangkok, Chiang Mai, Phuket, Krabi, U-Tapao/Pattaya and Hat Yai.
Thai AirAsia is adding three international routes – to Kuala Lumpur, Macau and Singapore – as well as a new domestic service linking Chiang Rai with Phuket. Chiang Rai Airport has a small but fast growing international operation that until now has been limited to mainland China and Hong Kong.
The international market accounted for less than 10% of the nearly 3 million passengers handled by Chiang Rai in 2018. Chiang Rai’s traffic has more than quadrupled since 2010, driven mainly by domestic expansion. AirAsia is already the market leader and will widen the gap compared to competitors as it launches the four new routes.
India was the fastest growing leading long haul market from Europe in 2018 (using seat data from OAG Schedules Analyser). Nevertheless, India is only Europe's number four long haul market and is small compared with the USA, China and Canada (despite India's population being close to China's).
Europe-India is led by Jet Airways and Air India, both of which are growing quickly. Jet launched Manchester-Mumbai in Nov-2018, and Air India's entry into Denmark and Sweden in 2017 gives it a presence in eight European markets. However, European airlines control more than half of the seats in this market and have stronger connections behind their hubs.
Bilateral constraints notwithstanding, India's long haul potential is gaining tentative recognition with recent LCC entry, a good indicator of underserved, overpriced markets.
WOW air's Dec-2018 launch of Reykjavik-Delhi is the first low cost service between Europe and India, although, due to the carrier's fleet restructuring, this service will be terminated in late Jan-2019. IndiGo is considering services to London (albeit one-stop initially) and is considering services to Istanbul.
Other operators are also starting to challenge incumbents: Alitalia launched Rome-Delhi in Nov-2017 and Air Italy launched Milan to Delhi and Mumbai in Dec-2018. In addition, LOT Polish Airlines may start what would be Central Europe's only service to India.
This CAPA India report examines data on Europe-India capacity and growth, analysed by country and by airline.
Low cost airlines were late to arrive in Asia. At the turn of the century there were only two very small LCCs operating in all of Asia Pacific, whereas LCCs had already captured significant market share in Europe and North America.
LCCs in Asia have since expanded rapidly and successfully, despite fierce resistance from legacy full service airlines. LCCs now account for nearly 30% of capacity within Asia Pacific.
There are still opportunities for further capacity share gains as several major markets in Asia remain well below the global average. China particularly is punching below its weight in terms of LCCs.
US airlines continue to embrace new technologies in 2019. United recently completed a proof of concept that leverages blockchain for ticket settlement, and Delta has opened the first biometric terminal in the country at its Atlanta hub.
United concluded that the proof of concept allowed it to demonstrate the capabilities of blockchain, simplifying the payment and booking process for corporate travellers and their employers. The airline stated that several time consuming processes could be greatly improved.
Delta's is a big step with the opening of the first biometric terminal, but certain global standards need to be adopted in order for biometric usage to become more widespread.
Although the promise of those technologies, and others, continues to build, for now they remain in their early days, and widespread adoption is far off in the future. However, there is growing consensus that emerging technologies can be used in a variety of capacities in the aviation industry to create a promising financial upside.
There are very few examples anywhere in the world, and none in Europe, of a single airline brand combining long haul widebody operations with short haul regional aircraft, without there also being a narrowbody business sitting between these two extremes.
The bid for Flybe by Connect Airways, a consortium consisting of Virgin Atlantic Airways, Stobart Group and US investment form Cyrus, will do this.
Recommended by Flybe's board and subject to shareholder approval, the deal values Flybe and its website at only GBP2.8 million. It will bring Europe's largest independent regional airline (Flybe) and the UK's number two long haul airline (Virgin Atlantic) under the Virgin Atlantic brand and combine this business with a specialist in providing third party wet lease regional capacity (Stobart Air).
Connect Airways is 40% owned by Cyrus, 30% by Stobart Group and 30% by Virgin Atlantic. In addition to acquiring Flybe, Connect Airways is also expected to buy Stobart Air from Stobart Group. The combination between Stobart Air and Flybe is easier to understand than that between Virgin Atlantic and Flybe.
Season's Greetings from CAPA Team
As 2018 is drawing to a close, we would like to thank you for all your amazing support of CAPA throughout the year. Over the past 12 months, we have been very busy elves, achieving many important milestones for your stockings that we’d like to share. None of this would be possible without our valued customers and partners. So, on behalf of everyone at CAPA, have a wonderful holiday season and a prosperous and happy 2019.
CAPA will be producing news content as usual with the exception of 25-Dec-2018, 26-Dec-2018 and 01-Jan-2019. The office will be closed from 24-Dec-2018 to 04-Jan-2019 inclusive, reopening Monday 07-Jan-2019. For any enquiries during this time please contact membership@centreforaviation.com
Upcoming Event
Doha: CAPA Qatar Aviation Aeropolitical and Regulatory Summit
The Qatar Aviation Aeropolitical and Regulatory Summit is a high level forum dedicated to addressing the latest developments in aviation regulation, both within the GCC and around the world.
Upcoming Event
Delhi: CAPA India Aviation Summit
CAPA’s events attract the highest calibre of thought-leaders in the industry. This includes strong C-Level executive representation from all types of business models – from full service, LCCs and hybrid airlines.
WestJet received (17-Jan-2019) its first Boeing 787-9. The aircraft is the first of 10 787-9s to be delivered, and will operate from Calgary to Dublin. The 320 seat aircraft will feature 'Economy', 'Premium' and 'Business' cabins. [more - original PR] [more - original PR - II]
Austrian Airlines announced (17-Jan-2019) plans to invest more than EUR200 million to expand its Airbus fleet to "significantly strengthen our position in Vienna", CEO Alexis von Hoensbroech said. The carrier will increase its A320 fleet from 36 to 46 aircraft over the next three years as it works to phase out its 18 76-seat Bombardier Dash 8-400 aircraft, expanding overall Vienna capacity by more than 10%. Phase out of turboprop aircraft is expected to last until 2021 at the latest. [more - original PR - English/German]
French PM outlines EUR50m investment plan for French airports in preparation for 'no deal' Brexit
France's Prime Minister Edouard Philippe announced (17-Jan-2019) plans to launch a EUR50 million investment plan for French ports and airports "in the coming days" in preparation for a 'no deal' Brexit scenario. "We strongly believe" the UK will leave without an exit deal, Mr Philippe stated, highlighting the French Government's responsibility to ensure the "least possible impact" if the UK exits the EU without an agreement being formed by 29-Mar-2019. He noted ports and airports are "the locations the most threatened by modifications brought about by a 'hard Brexit'". [more - original PR]
Brazil ANAC commences repossession process for 10 GECAS A320s from Avianca Brazil
Brazil ANAC commenced (17-Jan-2019) the aircraft redelivery process of 10 A320 aircraft operated by Avianca Brazil. Brazil ANAC stated: "The process is being conducted following the request by the owner leasing company, GE Capital Aviation Services". The cancellation of the aircraft's Brazilian registration can occur in up to five days and the redelivery of the aircraft is "immediate". ANAC added that the process is ensured by Presidential Decree 8008/2013 which aims for a swift removal of aircraft by the owner in case of defaults. [more - original PR - Portuguese]
Norwegian Air announced (17-Jan-2019) it will permanently suspend the following routes:
- Rome-Gothenburg;
- Rome-Tenerife;
- Rome-Reykjavik;
- Rome-Tel Aviv;
- The carrier will also reduce frequency on the following services:
- Palma de Mallorca-Copenhagen: 14 to 13 times weekly;
- Palma de Mallorca-Oslo: Nine to eight times weekly;
- Palma de Mallorca-Dusseldorf: Nine to seven times weekly;
- Palma de Mallorca-Helsinki: Seven to six times weekly;
- Rome-Helsinki: Six to four times weekly;
- Tenerife North-Madrid: Nine to seven times weekly.
The decisions are part of a series of cost cutting measures to improve profitability. [more - original PR] [more - original PR - Danish]