Qantas announced (20-Aug-2019) plans to invest AUD10 million (USD6.75 million) in providing fare discounts for residents in 16 towns across Queensland, Northern Territory and Western Australia in response to demand. The programme will be offered in towns which compete which a high proportion of corporate travel or are impacted by the region's remoteness. Fares between regional towns and fare levels will be reviewed periodically to consider inflation or other cost increases, while offering residents sale fares below the levels "from time to time". The initial rollout will include Mount Isa, Cloncurry, Longreach, Barcaldine, Blackall, Karratha and Kalgoorlie, with the carrier currently consulting with local airports and councils in Moranbah, Roma, Charleville, Broome, Port Hedland, Newman, Paraburdoo, Alice Springs and Ayers Rock. Qantas additionally noted its current discounts of 20% to 30% for passengers travelling between their home town and the nearest capital city will remain available. [more - original PR]
Finnair launched Helsinki to Los Angeles at the start of summer 2019 and will add Beijing Daxing to its Beijing Capital service this winter, when Guangzhou will become a year-round destination. The airline also plans to launch a service to Busan in South Korea in summer 2020.
These route additions underline that the focus of the airline's long haul network remains North East Asia, building on its connecting strategy between there and Europe via its Helsinki hub. In addition, its US network is growing, albeit from a small base, and this is giving some additional impetus to its east-west transfer flows.
Finnair's expansive mood is coming at a time when it admits that there is a slowdown in its key markets. Its 1H2019 financial results statement indicated that its FY2019 operating margin is likely to fall below its target of 6.0%, since revenue is expected to grow at a slower rate than capacity growth.
This report considers Finnair's strengths, weaknesses, opportunities and threats.
The UK-Russia aviation market is a massive underachiever, judged by its size against the magnitude of each country as a market in its own right.
There are currently only two airlines, Aeroflot and British Airways, operating only 70 weekly frequencies on a meagre four airport pairs and two city pairs (London-Moscow and London-St Petersburg) between two of Europe's largest nations.
This underserved market is attracting interest from new entrants.
The ultra LCC Wizz Air will launch two new routes from the UK to Russia on 1-Oct-2019, with services to Moscow Vnukovo and St Petersburg from London Luton Airport operated by its Wizz Air UK subsidiary. On 27-Oct-2019 Ural Airlines will launch London Stansted to Moscow Zhukovsky.
Nevertheless, the total of six UK-Russia airport pairs in the coming winter is still a paltry figure, and weekly seat capacity will only be back to where it was in 2014. Since then, easyJet has abandoned its loss-making three-year foray into this market, and Aeroflot's LCC subsidiary Pobeda has been and gone in just one winter season. UK-Russia has long been seen as a difficult market for new entrants.
Wizz Air UK, the UK subsidiary of a Central/Eastern European airline, may change that.
Sacramento International airport posted record passenger numbers in 2018, achieving impressive double digit passenger growth and surpassing its own forecasts for the year.
The airport was one of the top growing mid-sized airports in North America last year, according to CAPA partner OAG. Sacramento was ranked seventh among the top 50 mid-sized airports in seat growth in 2018, and has recently welcomed services from two new ULCCs – Spirit and Sun Country.
Sacramento is no doubt still working to add long haul flights to its network roster, and it remains to be seen whether the airport will secure intercontinental flights in the future.
But the upside is that its prospects for maintaining steady passenger growth remain promising.
Spirit Airlines is the largest ULCC in the Americas and deserves a lot of credit for making the model well-known, albeit at times not in the most positive ways.
As both Spirit and the ULCC model reach a certain level of maturity, the airline apparently no longer internally refers to itself as an ultra low cost airline, but believes it is more of a 'high value provider'.
Although Spirit’s long term fundamentals remain solid, the company is facing short term cost pressure and the challenge of correcting aspects of its operations, after changes it made for the busy summer time period have resulted in a tarnish on its improving operating performance.
This report considers Spirit’s strengths, weaknesses, opportunities and threats.
LCC growth in Argentina is continuing full steam ahead, with low cost operators representing approximately 31% of the country’s domestic flights for the seven months ending Jul-2019.
But there is growing uncertainty about the future of low cost operators in Argentina as the odds of the country’s current president Mauricio Macri winning re-election are growing increasingly slim. Mr Macri’s government is responsible for liberalised policies that have created opportunities for low cost operators to establish themselves in Argentina.
After a Cristina Kirchner-backed candidate showed likely to win the next election, the Argentinian peso lost nearly 20% of its value in a week. Even as the political winds appear to be shifting within Argentina, the country’s start-up low cost airlines remain in growth mode, looking to seize on opportunities for traffic stimulation within the under-served country. Even as the political winds appear to be shifting within Argentina, the country’s start-up low cost airlines remain in growth mode, looking to seize on opportunities for traffic stimulation within the country.
What’s Really Going On Within The Competitive Market Within Australia?
Our panel of leading analysts will discuss:
- Where to next for airline stocks? What’s outlook for the key drivers: economic growth, capacity and fuel?
- Who are the ROIC stars and why? how are airlines valued relative to other industrials?
- Which airlines are better placed to weather economic storms?
- How can the industry learn to deal with fuel prices volatility?
- How are airlines faring in containing non-fuel costs?
Moderator: Aviation Week, Senior Air Transport Editor, Adrian Schofield
- Citi, Analyst – Industrials & Transport, Jakob Cakarnis
- Evans and Partners, Head of Research, Cameron MacDonald
- Ord Minnett, Senior Research Analyst, John O’Shea
- S&P Global, Lead Analyst, Director, Graeme Ferguson
- UBS, Analyst – Transport & Infrastructure, Matt Ryan
Upcoming Event
Winnipeg: CAPA Canada 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.
Upcoming Event
Curacao: CAPA Latin America Aviation & LCCs 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.
Aeropuertos y Servicios Auxiliares (ASA) reported (19-Aug-2019) the following traffic highlights for the first seven months of 2019:
- Seven months ended Jul-2019:
- Passengers: 2.0 million, +13.6% year-on-year;
- Tamuin National Airport: +42.1%;
- Puerto Escondido Airport: +33.5%;
- Tepic Airport: +30.4%;
- Loreto Airport: +29.1%;
- Colima Airport: +29.1%;
- Chetumal Airport: +19%;
- Nogales International Airport: +14.5%;
- Puebla Hermanos Serdan Airport: +13.4%;
- Ciudad del Carmen Airport: +9.5%;
- Nuevo Laredo Airport: +8.3%;
- Tehuacan National Airport: +7.2%;
- Poza Rica Tajin Airport:+6.6%;
- Ciudad Obregon Airport: +5.1%;
- Uruapan Airport: +2.5%;
- Matamoros Airport: +1.1%;
- Cargo: 2790 tonnes, +23.6%;
- Matamoros Airport: +161.1%;
- Chetumal Airport: +52.9%;
- Poza Rica Tajin Airport:+44.7%;
- Ixtepec Airport: +38.7%;
- Puerto Escondido Airport: +37.9%;
- Campeche International Airport: +26.2%;
- Ciudad del Carmen Airport: +21.4%;
- Ciudad Obregon Airport: +12%;
- Colima Airport: +8%. [more - original PR - Spanish]
- Passengers: 2.0 million, +13.6% year-on-year;
Cathay Pacific Group appoints new HK Express CEO, former CEO to assume chairmanship
Cathay Pacific Group appointed (19-Aug-2019) Mandy Ng as the new CEO of HK Express with immediate effect. Ms Ng, who has been with the Swire Group for 17 years, takes over from former CEO Ronald Lam who is now Cathay Pacific chief customer and commercial officer. Mr Lam also assumes the chairmanship of HK Express. [more - original PR]
Costa Rica's President Carlos Alvarado announced (16-Aug-2019) plans to invest over CRC90 billion (USD157.3 million) in airport infrastructure modernisation. Liberia Daniel Oduber Quirós International Airport, San Jose Tobias Bolanos International Airport and Limon International Airport are undertaking works exceeding CRC75.1 billion (USD131.3 million). Palmar Sur, Golfito, Pérez Zeledón, Guápiles, Quepos, Tortuguero, Coto 47 and Puerto Jiménez airports will receive CRC15 billion (USD26.2 million) in investment. [more - original PR - Spanish]
Chongqing Airport Group, via its official Weibo account, announced (16-Aug-2019) Chongqing Wushan Airport commenced operation on 16-Aug-2019 (CAAC-News, 16-Aug-2019). China Express Airlines operated the first service at the airport from Chongqing Jiangbei International Airport. The airport is a category C regional airport with one 3500sqm terminal building and one 2600m runway, targeting capacity of 280,000 passengers, 1200 tonnes of cargo and 3333 aircraft movements p/a.
Air Mauritius, via its official Facebook account, reported (14-Aug-2019) improved financial results with a net loss of EUR4.1 million in Q1FY2019/2020, ended 30-Jun-2019, compared to a net loss of EUR14.9 million in Q1FY2018/2019. Load factor increased from 78% to 80.2%, revenues decreased 2.3% year-on-year and costs decreased 7.3%. The airline noted the first quarter of the financial year coincides with the low tourism season. The carrier is finalising a new business model based on an improved network and fleet.
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