European Commission announced (26-Jan-2023) the EU rules establishing a dedicated airspace for drones (U-space) entered into force on 26-Jan-2023. The U-space creates conditions for both drones and manned aircraft to operate safely and will allow the industry to continue scaling up the market for the drone sector and services. The commission noted the new rules will support more complex and longer distance operations, in particular in low level and densely operated airspace and when out of sight of the remote pilot. The next steps will involve member states designating their U-space areas and service providers as well as work on information exchange and navigation performance standards. [more - original PR]
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Europe's three leading independent low cost airline groups – Ryanair, easyJet and Wizz Air – have all reported financial results for the final calendar quarter of 2022.
Robust demand for air travel can be seen in the strength of traffic growth and yields for the three airlines in the period, and in their commentaries about 2023. European economies may be experiencing weakness, but this does not appear to be dampening consumers' desire to fly after the removal of two years of travel restrictions.
easyJet said that it had achieved record revenue booking days in Jan-2023; Ryanair also spoke of record bookings in the second week of the year. Wizz Air said that people might be prepared to sacrifice consumer items other than air travel. The leading European legacy airlines have not yet reported results for 4Q2022, but similar commentary on strong demand seems likely.
Strong demand and yields seem set to remain features of European aviation into the summer.
07-Feb-2023
Growing importance of travel sustainability could spell trouble for Asia Pacific airlines
Sustainability has become an essential element of travel for consumers in the Asia Pacific.
With the COVID-19 pandemic fading into the background and concerns about the safety and ease of travel diminishing, travellers across the Asia Pacific are exhibiting a newfound concern about the impacts of their travel – be they environmental, social or otherwise.
However, while sustainability is increasingly important, confusion lingers around how environmental impacts are measured, tracked and compared.
In addition, there are concerns about how easy information is to access and about the quality of information available, and how to verify the claims of travel operators.
Travellers and aviation industry stakeholders are increasingly demanding objective, reliable data on sustainability performance targets and outcomes in order to make informed purchasing or investment decisions.
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UK aviation: MAG reports 48% EBITDA margin; prospects examined across its airports – part two07-Feb-2023
UK aviation: MAG reports 48% EBITDA margin; prospects examined across its airports – part two
Full-year financial results (calendar year 2022) will not be announced by most airports and airport groups for a month or so yet, so a half-year result from Manchester Airports Group, which witnessed disruption in the first four months of 2022 owing to severe staff shortages, merits consideration.
The resilience of airports is again evident, with the Manchester, Stansted and East Midlands group recording positive operating profit and EBITDA, and with the EBITDA Margin close to 50%.
It is also an opportunity to look at construction activities at the group’s airports and especially at Manchester, the torch bearer for ‘levelling up’ in the UK air transport business. That construction includes an extension to what is possibly the biggest terminal in the country already, and also an 'Airport City', partially Chinese-funded, which has stalled somewhat during the COVID-19 pandemic.
Part two of this two-part report looks at Manchester Airport.
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Cebu Pacific closes in on full network recovery; latest capacity gains in international markets06-Feb-2023
Cebu Pacific closes in on full network recovery; latest capacity gains in international markets
Cebu Pacific plans to complete its return to pre-pandemic operation levels within the next few months, and the airline’s international growth in 2023 will be supported by more deliveries to its widebody and narrowbody fleets.
The Philippine-based LCC estimates that both its system capacity and network will return to pre-COVID-19 levels by the end of Mar-2023.
This will be achieved through increases in frequency and the relaunch of more international routes, particularly in the China market. With its strong domestic network already essentially recovered, system capacity gains will come mainly on the international side.
The airline is rebuilding its widebody fleet and intends to complete its transition from A330ceos to A330neos this year. The addition of new A320neo-family aircraft will be somewhat balanced by the retirement of older Airbus narrowbodies.
Analysis
UK aviation: MAG reports 48% EBITDA margin; prospects examined across its airports – part one06-Feb-2023
UK aviation: MAG reports 48% EBITDA margin; prospects examined across its airports – part one
Full-year financial results (calendar year 2022) will not be announced by most airports and airport groups for a month or so yet, so a half-year result from Manchester Airports Group, which witnessed disruption in the first four months of 2022 owing to severe staff shortages, merits consideration.
The resilience of airports is again evident, with the Manchester, Stansted and East Midlands group recording positive operating profit and EBITDA, and with the EBITDA Margin close to 50%.
It is also an opportunity to look at construction activities at the group’s airports and especially at Manchester, the torch bearer for ‘levelling up’ in the UK air transport business. That construction includes an extension to what is possibly the biggest terminal in the country already, and also an 'Airport City', partially Chinese-funded, which has stalled somewhat during the COVID-19 pandemic.
Part one of this two-part report looks at the financial performance and explores the prospects for Stansted and East Midlands airports.
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Partnerships and alliances take on an increased purpose
For the surviving airlines, partnership and alliances appear as an increasingly attractive option. Before the pandemic many had started to question the value of alliances. Now they are providing an important safety net for carriers enabling them to serve strong, profitable markets and allow partners to support wider connectivity.
Mergers and consolidation have accelerated as a result. JetBlue’s acquisition of Spirit Airlines from under the nose of Frontier Airlines – and the premium it paid – could be the start of a trend as airlines seek to solidify their market penetration.
The expansion of partnership has not just been within the industry though – it is also looking at expanding collaboration with other transport providers, technology partners, environmental organisations and more.
The global pandemic has significantly accelerated the pace at which companies are bringing new ideas to market, including massively expediting some processes and applying pressure on industry ecosystems to deliver services in new ways.
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How should companies use partnerships to build business resiliency?
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Can strategic joint ventures bridge the supply and demand gap?
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Will the COVID pandemic break down the Mergers & Acquisitions wall or actually make it stronger?
Wizz Air Group CEO József Váradi provided (26-Jan-2023) the following outlook:
- Continued cost management is driving ex-fuel CASK towards earlier guidance. Wizz Air caught up with peers in terms of systematic jet fuel hedging impact through FY2024. Ex-fuel CASK is expected to return to pre-COVID-19 levels in FY2024;
- Continued evidence of a solid fare environment as average fares are trading above 2019 and 2022 levels. Mr Váradi added booking volumes are ahead of 2022 levels towards the end of Jan-2023. Mr Váradi said: "We remain optimistic and maintain our RASK guidance for H2 F23 at mid-single digits above the same period in 2019";
- On track to operate 35% higher capacity compared to H2FY2020. For H1FY2024, the planned ASK growth is 30% compared to 2023 and 65% compared to 2019. As with the Q3FY2023, the company expects slightly more ASK contribution from longer routes connecting locations in the Middle East and Near East, as this region continues to attract a higher volume of passengers;
- Load factors improving. The load factor gap is expected to continue to close compared to 2019 in the coming quarters as recent network investments start to mature;
- Overall net loss expected in FY2023, however profitability is forecast for FY2024, subject to no adverse pandemic or geopolitical events. [more - original PR]
Bonza placed (27-Jan-2023) its services on sale and launched its airfare list. Customers are able to book on 15 routes to 12 destinations as part of a phased rollout. Bonza chief commercial officer Carly Povey stated: "We're committed to low cost fares which will in turn, stimulate new markets for Australia's domestic tourism industry". [more - original PR]
AlphaStruxure announced (26-Jan-2023) an agreement to design, construct and operate integrated microgrid infrastructure at the New Terminal One (NTO) facility at New York John F Kennedy International Airport. The 11.3 megawatt microgrid will provide NTO with sustainable, locally generated and cost-predictable energy and is expected to deliver immediate greenhouse gas emissions reductions of 38% compared to grid-sourced energy. The project will feature the largest rooftop solar array in New York City and on any airport terminal in the US, with all available and viable rooftop areas being used for the project. When complete, NTO will be the first airport transit hub in the New York region that can function independently of the power grid. [more - original PR]
Phoenix Mesa Gateway Airport reported (25-Jan-2023) it handled 1.9 million passengers in 2022, an increase of 6.5% compared to 2019 and a new record for annual passenger throughput. The airport handled 199,287 passengers in Dec-2022, its eighth record month of 2022. [more - original PR]
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20-Jan-2023 10:49 AM
WTTC: Dubai the top city for traveller spend in 2022, Hong Kong predicted to top rankings by 2032
World Travel & Tourism Council (WTTC) reported (18-Jan-2023) the top cities by international traveller spend for 2022 and its prediction for 2032, as follows:
- 2022:
- 2032:
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