Analysis Reports

The global aviation industry is reasonably optimistic that the International Civil Aviation Organization (ICAO) will endorse a target to achieve net zero emissions by 2050 at the organization’s 41st general assembly, which is now under way. 

But even if ICAO establishes that baseline, challenges remain as differences between developing and developed countries need to be resolved.

And there is also the reality that the creation of a formal target will do little to satisfy critics, who argue that the industry is not moving fast enough to cut its emissions. 

The Asia Pacific spent most of the last decade as the world’s largest region for air travel.

From 2012 to the onset of the COVID-19 pandemic, traffic to/from or within the region accounted for better than a third of all passenger journeys globally.

However, with the Asia Pacific recovery lagging, thanks to closed borders, heterogeneous pandemic responses, and caution around inbound tourism, the region is forecast to lose its number one spot in 2022.

Virgin Atlantic and SkyTeam announced on 27-Sep-2022 that the UK long haul airline would join the alliance in 2023.

The announcement talked of the benefits to customers of improved frequent flyer benefits and greater access to SkyTeam members' global network.

However, Virgin Atlantic is already a member of an immunised joint venture on the North Atlantic, by far its most important market, with leading SkyTeam members Air France, KLM and Delta Air Lines (the latter also owns 49% of Virgin Atlantic).

Its relationship with these three partners could not really grow any closer as a result of SkyTeam membership. The benefits of Virgin's latest move will mainly be felt in other markets and by other SkyTeam airlines, but will be less significant than those already gained.

As much as anything, this feels like an exercise in completeness. It is doing it because it can.

Over several years now attempts by the Nigerian government to privatise the country’s four main airports by concession have been consistently and successfully resisted by a range of pressure groups.

The latest attempt, which began a year ago, now sees Turkey’s TAV Airports enter the fray, leading a consortium for the Lagos Murtala Muhammed International Airport (MMIA), the country’s busiest, and one where there is already a degree of privatisation as one of its terminals is privately managed.

The problem is that India’s GMR has also launched a bid, and that company, like TAV, is part-owned by Groupe ADP. That has given a platform for the anti-privatisation elements and there are strong words being bandied about.

On paper Lagos wouldn’t necessarily attract many investors.  But they will take a macroeconomic view – population, a growing middle class, and a solid industrial base focused on Nigeria’s oil exports.

This is part two of a two-part report.  

Australian airlines are looking to new aircraft types and a flurry of consolidation moves to broaden the scope of their operations in the country’s vital regional aviation sector.

Qantas is planning to introduce Airbus A220s on its regional network, and the airline is also seeking approval to complete its acquisition of Alliance Aviation.

Meanwhile, Regional Express Holdings (Rex) is considering how its takeover of National Jet Express could enhance its own fleet strategy.

The fleet and acquisition moves will further shake up what has been a very dynamic market sector for Australia’s airline groups.

This regular CAPA report provides a summary of recent aviation sustainability and environment news. This latest issue features:

IATA: Traditional fuel suppliers must turn their attention to SAFs

WestJet operates second SAF-powered flight

Air Canada selects CHOOOSE as new carbon offset programme provider

Curacao Hato International Airport to focus on cargo and electric aviation in new business strategy

Cebu Pacific operates first SAF powered commercial flight

Over several years now attempts by the Nigerian government to privatise the country’s four main airports by concession have been consistently and successfully resisted by a range of pressure groups.

The latest attempt, which began a year ago, now sees Turkey’s TAV Airports enter the fray, leading a consortium for the Lagos Murtala Muhammed International Airport (MMIA), the country’s busiest, and one where there is already a degree of privatisation, as one of its terminals is privately managed.

The problem is that India’s GMR has also launched a bid, and that company, like TAV, is part-owned by Groupe ADP. That has given a platform for the anti-privatisation elements and there are strong words being bandied about.

On paper, Lagos wouldn’t necessarily attract many investors.  But they will take a macroeconomic view – population, a growing middle class, and a solid industrial base focused on Nigeria’s oil exports.

This is part one of a two-part report.

CAPA analysis of quarterly capacity projections shows schedules for Europe are much firmer than at any other time in the COVID-19 era. Moreover, projections for 4Q2022 are higher than one month ago.

No previous COVID-era quarter has enjoyed an increase to capacity projections from a month out to the quarter's start. The pattern had been a consistent one of cuts.

Europe's total seat capacity is at 85.9% in the week commencing 26-Sep-2022, a shortfall of 14.1% against the equivalent week 2019. Europe remains fifth in the regional ranking, above Asia Pacific, where capacity is down by 22.6% versus 2019, but below the Middle East, where capacity is down by 12.0%. Africa capacity is down by 8.5%, North America by 7.1%, and Latin America is down by 4.5%.

Europe's capacity as a percentage of 2019 levels has hardly shifted since late May-2022. In spite of positive developments in 4Q2022, it could end up similar to the 87% achieved in 3Q2022.

After 74% in 1Q and 84% in 2Q, Europe's capacity recovery has lost momentum through 2022.

The success or otherwise of a global sporting event such as the Olympic Games and the football World Cup can often hang as much on the ability of a country’s infrastructure to handle the demand placed on it as much as what happens on the field of play.

If a country gets it right it will go unnoticed. If it gets it wrong it most certainly will be noticed.

Qatar began to enhance its main Hamad International Airport, which only opened in 2014, in time for the World Cup, and the necessary works will be completed accordingly. The country benefits from having all the activity concentrated on one gateway airport – unlike Brazil, for example, which had to allocate different airports to different countries.

But taking a belt and braces approach, it will also reopen the previous gateway, Doha International; at least, for the duration of the event.

The trial to determine whether the partnership between American Airlines and JetBlue Airways is anti-competitive or not is now under way, and few are venturing to predict the outcome. 

Under the Administration of US President Joseph Biden, the Department of Justice (DOJ) has been aggressive in its pursuit – to block what it deems as anti-competitive behaviour in many industries. 

The challenge to the Northeastern Alliance (NEA) occurs as the DOJ weighs the merits of JetBlue’s proposed acquisition of, and merger with, Spirit Airlines.

Obviously, if the DOJ prevails in dismantling the NEA it could be detrimental for both partners.

But the stakes are even higher for JetBlue, as it risks losing a key partner and the rejection of its merger with Spirit.