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Alaska lays out a logical framework to buy Hawaiian, will regulators push back?
07-Dec-2023

Alaska lays out a logical framework to buy Hawaiian, will regulators push back?

Although Alaska Air Group’s decision to acquire, and merge with, Hawaiian Airlines took many by surprise, the reality is that Alaska’s management has always taken a quietly adept approach to managing its business and looking for strategic opportunities. 

Alaska’s relatively smooth integration with Virgin America during the past decade, after the close of their merger, serves as a reliable framework for Alaska’s acquisition of Hawaiian, pending regulatory approval, which is a major wildcard. 

In a US market where scale is increasingly important outside certain niche airline models, Alaska is moving to ensure its relevance for the future, and Hawaiian attains a certain level of sustainability that was arguably not otherwise achievable. 

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ANA faces macroeconomic and fleet challenges in next stage of recovery
06-Dec-2023

ANA faces macroeconomic and fleet challenges in next stage of recovery

All Nippon Airways (ANA) expects Japanese outbound traffic will continue to recover slowly through 2024, although the airline’s plans for next year (2024) have been complicated by fleet availability issues.

Japan’s outbound travel was an important traffic flow for many airlines before the COVID-19 pandemic, so it has been closely watched during the post-pandemic period. It has not rebounded as quickly as in other markets, and a full return to 2019 levels is not expected to occur until well into 2024.

The Japanese government was slower than others to remove travel restrictions, and there was also some early reluctance in Japan to travel abroad. However, both these constraints have eased, and the main influence on demand now is the higher cost of travel.

Some overseas markets, such as Hawaii, are performing more strongly, and this is a positive sign for the overall international outlook.

ANA faces the extra problem of grounded aircraft due to the Pratt & Whitney engine issues that are affecting many airlines around the world. This impacts domestic more than international services for ANA, although it is occurring just when the airline is looking to ramp up its overall capacity and improve its earnings.

Analysis
Global air travel growth faces limitation from slow aircraft deliveries
06-Dec-2023

Global air travel growth faces limitation from slow aircraft deliveries

CAPA ANALYST PERSPECTIVE - a new series where CAPA - Centre for Aviation's analyst team provide personal views on a hot topic facing aviation around the world. 

Air travel has now returned to pre-pandemic levels and forecasts are that growth in passengers will continue into 2024, albeit moderating somewhat from recent rapid growth.

The outlook for the air transport sector is now largely positive, with airlines and airports reporting record revenue and the sector largely moving back towards profitability, after a series of difficult years.

However, if you look at the state of the global aircraft manufacturing industry, a very different picture emerges. You might even be forgiven for thinking that the crisis induced by the COVID pandemic has yet to end.

Simon Elsegood, Head of Research at CAPA - Centre for Aviation shares his viewpoint.

Premium Analysis
Athens Airport ownership deal end-game in sight as EU approves AviAlliance’s 'sole control’
05-Dec-2023

Athens Airport ownership deal end-game in sight as EU approves AviAlliance’s 'sole control’

The saga of the redistribution of equity in Athens International Airport seems to have lasted as long as the Greek Debt Crisis, which began in 2009.

The complex ownership structure, involving the Greek government, state development funds, a private German company (from the country that bailed out Greece, but at a cost), and a Greek family was increasingly less fit for purpose, with decision-making decentralised.

Now that German company, AviAlliance, has been given the green light by the European Commission to take sole control, with marginally more than 50% of the equity.

That provides the airport with a clear strategic development focus. AviAlliance operates similar airports in Germany, Hungary and the Caribbean.

Now the country awaits the outcome of an IPO on the airport, in 2024, which will shed more light on whether or not Greece has finally extricated itself from the shackles of that debt crisis.

Analysis
Prioritising cargo – Belgium’s Liège Airport to invest EUR500 million in expansion drive
04-Dec-2023

Prioritising cargo – Belgium’s Liège Airport to invest EUR500 million in expansion drive

There are several small airports in Europe that have chosen to prioritise cargo operations over passenger.

One of them is Liège Airport in Belgium, and arguably it is the most successful, handling aircraft from across the world and benefitting from its location close to major industrial conurbations.

Now the airport’s owners intend to invest EUR500 million in additional facilities to benefit both long haul services and maintenance operations.

Air cargo, which prospered during the COVID-19 pandemic, has faltered during the post-pandemic economic turndown, but recent statistics from IATA for the period 3Q2023 suggest that international cargo demand registered its first growth since the end of 2021.

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Granada: CAPA Airline Leader Summit - Airlines in Transition 2024

The lead event in CAPA’s 2024 global summit series, the Airline Leader Summit - Airlines in Transition examines the most challenging aspects of the global aviation recovery as air travel exits the pandemic era.

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CAPA TV
Utilising technology for distribution & disruption
Recorded at CAPA Asia Aviation Summit & Sustainability Awards, 2-3 Nov 2023

Utilising technology for distribution & disruption

As travel has returned across the Asia Pacific, it’s becoming increasingly apparent that consumer expectations and demands of the traveller are changing across all stages of the journey. COVID-19 has produced a transformation in expectations about the travel process for consumers in the region, from how they research, plan and book a trip, to where they want to travel, who they want to travel with and what they want to spend their money on. 

 

Given the regional lockdowns and uncoordinated nature of border closures and travel bans imposed during the pandemic, it’s unsurprising that a degree of uncertainty and caution prevails for international travel. Asia Pacific travellers have also been slower to abandon concerns around health and safety, have shortened their planning and booking windows and are retaining heightened demands concerning the level of timely information and support made available to them through the travel process.  

 

COVID-19 also accelerated a range of ongoing issues: Regional consumers continue to pivot towards online & direct sales channels and mobile booking; travellers are becoming more independent, particularly in younger generations; consumers are more conscious about sustainable travel and tourism options and their personal impact when the travel.   

 

Technology is at the heart of the air travel sector’s response to these disruptive changes. The industry is pushing digital solutions to facilitate new preferences and ways of interacting with travel.  

  • What are the key technologies that Asia Pacific travel firms need to adopt to meet changing regional travel trends?  

  • What are the technology priorities for the traveller through different stages of the journey? 

  • With the rise of the ‘always on’ traveller and greater desire to stay informed, what information does the regional traveller want, and what can they do without? 

  • How are travel research/planning, booking and payment trends changing? 

  • Should regional travel companies be pioneering technology development to create bespoke solutions, partnering with third party firms/using established systems or outsourcing development completely? 

  • Are regional travel companies falling behind, and if so, what can they do to keep up with new trends? 

Latest News Headlines

357 news items were published to CAPA Members in the past two days. What could you be missing?
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Alaska Air Group and Hawaiian Airlines entered (03-Dec-2023) a definitive agreement under which Alaska Airlines will acquire Hawaiian Airlines for USD18 per share in cash for a transaction value of approximately USD1.9 billion. Features of the acquisition will include:

  • The combined airline will maintain both Alaska Air and Hawaiian Air brands while integrating into a single operating platform;
  • The combined organisation will be based in Seattle under the leadership of Alaska Airlines CEO Ben Minicucci;
  • The airline will serve 138 destinations with a fleet of 365 aircraft;
  • Honolulu will become a "key" Alaska Airlines hub;
  • The company will maintain and grow union represented jobs in Hawaii, including preserving pilot, flight attendant, and maintenance bases in Honolulu and airport operations and cargo throughout the state;
  • No anticipated material impact on long term balance sheet metrics with return to target leverage levels expected within 24 months.

Hawaiian Airlines president and CEO Peter Ingram said: "In Alaska Airlines, we are joining an airline that has long served Hawaii, and has a complementary network and a shared culture of service. With the additional scale and resources that this transaction with Alaska Airlines brings, we will be able to accelerate investments in our guest experience and technology, while maintaining the Hawaiian Airlines brand". The acquisition is conditioned on required regulatory approvals, approval by Hawaiian Holdings shareholders and other customary closing conditions, with closing expected between Dec-2024 and Jun-2025. [more - original PR - Alaska Airlines] [more - original PR - Hawaiian Airlines]

SAS confirmed (30-Nov-2023) it "intends to eventually exit the Star Alliance and join the SkyTeam Alliance, of which Air France-KLM is a founding member". The carrier stated: "This move towards a partnership with SkyTeam determines a clear path forward for the company", and expects to "be able to further enhance SAS' offerings for the benefit of our colleagues, customers and communities" as a result. SAS noted "nothing is changing immediately", and it is still part of Star Alliance. [more - original PR]

CAPA - Centre for Aviation announced (29-Nov-2023) the following winners of the CAPA Aviation Awards for Excellence at the CAPA World Aviation Summit & Awards for Excellence in Abu Dhabi on 28/29-Nov-2023:

SunExpress CEO Max Kownatzki, speaking at the CAPA World Aviation Summit & Awards for Excellence, stated (28-Nov-2023) "We've been profitable for three years in a row and will have one of the best results in 2023".

Air Serbia announced (29-Nov-2023) plans to host the CAPA 2024 World Aviation Summit, together with the City of Belgrade. CAPA Airline Leader Summit World & Awards for Excellence will take place on 21/22-Nov-2024, bringing together more than 250 global leaders from the aviation industry, including CEOs and high ranking representatives of the most significant global and regional airlines, airports, and other participants in the passenger and cargo air transport, tourism, and conference travel sectors from around 40 countries. [more - original PR - English/Serbian]

Etihad Airways announced (29-Nov-2023) plans to deploy A380 equipment on one of two daily New York JFK frequencies from 22-Apr-2024. The other daily flight will be operated with Boeing 787-9 featuring first, business and economy cabins. The introduction of the A380 marks a significant enhancement to Etihad's capacity in the US market, connecting to the broader GCC and Indian subcontinent. It will further attract an increased number of visitors to Abu Dhabi. The US route becomes the second destination after London to enjoy the remarkable A380 experience. The aircraft offers economy, business and first class seats, as well as a three room suite. [more - original PR]

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CAPA-Envest Global Airline Sustainability Benchmarking & Rating Report 2023

This report aims to benchmark the performance of the world’s major airlines – to understand their relative carbon emission quantity and intensity with respect to passenger and freight transport.

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