Sabre Corporation acquired (16-Oct-2019) Radixx, a provider of airline retailing software with an established presence in the LCC market, for approximately USD110 million, including payments to debtholders. The acquisition was made using cash on hand. Sabre expects the acquisition to help the company offer retailing, distribution and fulfilment capabilities to serve this rapidly expanding market. Radixx's signature products are an LCC passenger service system and internet booking engine. As a combined portfolio, Sabre and Radixx will offer solutions for all segments of the airline market. Sabre plans to operate Radixx as a stand alone subsidiary through its Airline Solutions business. [more - original PR]
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Paris-New York aviation market: Corsair, French bee and othersTwo French airlines are to launch Paris Orly to New York Newark services in Jun-2020.
The leisure airline Corsair, sold by TUI Group to Intro Aviation earlier this year, plans to deploy A330-900neos on the route from Sep-2020. The LCC French bee will deploy A350-900s. Both are long haul specialists, but neither currently operates to New York.
Since these plans were announced, another leisure focused French airline that had long been operating between Paris and New York went into receivership: XL Airways France, which operated from Paris CDG to Newark, was the fifth largest of eight airlines on the city pair before hitting financial difficulties.
Paris-New York is the biggest intercontinental city pair by seats from continental Europe and Paris CDG-New York JFK is the largest intercontinental airport pair by seats from continental Europe. Paris-New York has only 44% of London-New York's annual seats in 2019, but it has grown faster since 2012. The Air France/Delta JV's share is higher than the British Airways/American JV's share on London-New York but this is falling, and there are more competing airlines.
Corsair and French bee will follow three other new entrants on Paris-New York since 2015: Norwegian, LEVEL and (briefly) Primera Air.
Canada’s second largest airline, WestJet, has gone through numerous changes to its business model during the last decade – introducing two new subsidiaries, Encore and Swoop, adding new regional partners, forging a new joint venture and launching long haul operations, first with 767s and then with next generation 787s.
The dizzying pace of change has drawn its fair share of scrutiny from the investment community, reflecting the dichotomy that airlines face in satisfying the shortsightedness of markets while also crafting long term strategic plans.
WestJet won’t be subject to the quarterly whiplash that other airlines face now that it is being bought by the private equity firm Onex for CAD5 billion. But the airline continues to forge a clear growth strategy that entails building deep partnerships to broaden its international reach and continuing to capture a larger share of Canada’s corporate travellers.
Alaska Air Group’s merger with Virgin America was one of the more seamless in US aviation history from an integration perspective, and with the combination largely complete, Alaska is now working to reach its long term margin and leverage targets.
With the exception of Hawaii, the company is also benefitting from an overall positive pricing environment and has raised its unit revenue outlook for 3Q3019. Alaska is also reaping benefits from new revenue initiatives, including segmented fares and other ancillary products, as it works to deliver an ancillary performance that mirrors its larger network peers.
Alaska also appears to be benefitting from some stabilisation in highly contested transcontinental markets; however the airline is cutting some mid- and transcontinental routes as it works to maximise the overall profitability of its network.
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Aeroflot Group SWOT: Russia's number one on course for 2023Aeroflot Group reported an 11.4% increase in passenger numbers for the first eight months of 2019, in line with its target growth rate for the year. The group is on course to achieve its 10th straight year of traffic growth. From 2008 to 2018, its compound average growth rate in passenger numbers was 17.0%.
This was boosted by acquisitions in 2011, but its average over the past five years, based on organic growth, has still been a vigorous 12.2%. Its growth has been resilient to fluctuations in the macroeconomic and geopolitical backdrop in Russia.
Aeroflot has no plans to slow down. Its target to carry between 90 million and 100 million passengers in 2023, compared with 55.7 million in 2018, implies continued growth of approximately 11% pa.
CAPA's analysis of Aeroflot Group's strengths, weaknesses, opportunities and threats suggests that it is well placed to achieve this target.
It is early days for Delta Air Lines’ operation of its fleet of Airbus A220 narrowbodies, but so far the aircraft is meeting the airline’s expectations and the route network for the jet continues to expand beyond the initial deployment from New York JFK and LaGuardia.
Delta continues to believe that the aircraft offers a superior customer experience in the US domestic market while delivering much better economics than smaller regional jets the aircraft is replacing.
Until JetBlue takes delivery of its first aircraft in 2020, Delta has the distinction of being the only A220 operator in the US, which means that Delta’s strategy for the aircraft will continue to be closely scrutinised.
Recorded at CAPA Latin America Aviation & LCCs Summit, 16-17 Sep 2019
Copa Remains Confident Of Getting The Green Light For Its JV With Avianca And United
Copa Airlines’ SVP of Commercial and Planning Dennis Cary concludes that overall, the company’s markets in Brazil and Mexico are performing solidly, while its proposed joint venture with United and Avianca should not face resistance from regulators, and secure necessary approvals.
CAPA New Zealand SummitMore
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Oct
Auckland: CAPA New Zealand Summit
CAPA’s NZ Aviation Summit explores key issues & opportunities facing the industry in this region. A separate Corporate Travel Summit is being held at this time for buyers and suppliers on how these issues & opportunities impact their travel programmes.
CAPA Asia Aviation SummitMore
Upcoming Event
5-6
Nov
Singapore: CAPA Asia Aviation Summit
CAPA’s Asia Aviation Summit explores key issues & opportunities facing the industry in this region. A separate Corporate Travel Summit is being held at this time for buyers and suppliers on how these issues & opportunities impact their travel programmes.
Air Vanuatu CEO Derek Nice, speaking at the CAPA New Zealand Aviation & Corporate Travel Summit, stated (17-Oct-2019) there is "certainly" a lot of value to airlines cooperating in the region, as there is "definitely" the demand for travel between South Pacific countries. However, he noted there is not enough demand to "justify open competition between us all", meaning there must be "some sort of cooperation". Mr Nice stated Air Vanuatu is "completely open" to cooperation and is working with ASPA to "broaden" its discussions and "encompass as many airlines in the region as we possibly can". This cooperation extends "far beyond simply sharing routes", and will include having MRO services in airports, purchase sharing and fuel bulk purchasing.
Ghana's President Nana Addo Dankwa Akufo-Addo stated (16-Oct-2019) the Ministry of Aviation initiated plans for the 'Aviation Driven Development' programme, with the strategic goal of using aviation as a driver of socio-economic transformation. Mr Akufo-Addo also highlighted the construction of new aprons at Accra Kotoka International Airport, new passenger terminals at Kumasi Airport and Tamale Airport and the rehabilitation of Sunyani Airport as projects designed to make Ghana's aviation industry more competitive. [more - original PR]
Air France, KLM and China Eastern Airlines expanded (16-Oct-2019) an existing joint venture agreement to include Virgin Atlantic Airways, effective spring 2020. The enhanced agreement will offer passengers an increased number of services and itineraries between Europe and China, further facilitated by codesharing, and joint commercial offers. UK to Shanghai markets and the connecting network within China are expected to be integral to the partnership, which includes China Eastern and Virgin Atlantic services from London to Shanghai. Passengers will be able to earn and redeem miles when travelling with and connecting across carriers. [more - original PR]
Japan National Tourism Organisation (JNTO) reported (16-Oct-2019) visitor arrivals to Japan for Sep-2019. Details include:
- Total foreign visitors: 2.3 million, +5.2% year-on-year;
- China: 819,100, +25.5%;
- Taiwan: 376,200, +14.3%;
- South Korea: 201,200, -58.1%;
- Hong Kong: 155,900, +23.6%;
- US.: 127,200, +21.6%;
- Thailand: 62,100, +14.1%;
- Australia: 60,500, +24.4%;
- UK: 49,600, +84.4%;
- Vietnam: 38,300, +30.9%;
- Philippines: 37,800, +52.5%;
- Singapore: 29,100, +24.5%;
- Malaysia: 28,800, +8%;
- Canada: 28,500, +23.4%;
- France: 26,500, +31.6%;
- Indonesia: 25,000, +2.3%;
- Japanese departures: 1.8 million, +7.4%. [more - original PR - Japanese]
China Eastern Airlines Group reported (16-Oct-2019) the following traffic highlights for Sep-2019:
- Passengers: 10.5 million, +6.4% year-on-year;
- Domestic: 8.8 million, +6.5%;
- International: 1.4 million, +13.0%;
- Regional: 234,190, -24.6%;
- Passenger load factor: 79.8%, -1.5ppts;
- Domestic: 81.4%, -1.3ppts;
- International: 77.5%, -1.2ppts;
- Regional: 69.5%, -12.0ppts;
- Cargo: 90,710 tonnes, +9.7%;
- Domestic: 63,290 tonnes, +7.5%;
- International: 25,850 tonnes, +22.0%;
- Regional: 1560 tonnes, -40.0%;
- Cargo load factor: 36.2%, +0.3ppt;
- Domestic: 35.5%, -5.2ppts;
- International: 37.0%, +2.8ppts;
- Regional: 17.3%, -2.5ppts. [more - original PR]
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