Analysis Reports

There has been some indecision about the future of the Brazilian airports concession process since the seventh tranche was completed.

A change of government initially saw a shift back towards the retention, by way of the state operator Infraero, of the domestic Santos Dumont Airport in Rio de Janeiro, while the re-concession of the international Galeão Airport there was put on the back burner while it was 'reinvigorated', which meant redirecting domestic capacity from Santos Dumont to Galeão.

That process was completed in 2024; Galeão is flying high, and a deal for Galeão now looks to be on the cards for 1Q2025, which is pretty quick by Brazilian standards.

In what is one of the more unorthodox countries when it comes to these things, it seems that the existing concessionaire, RIOgaleão (effectively now just Changi Airports International, which has been trying to offload Galeão since 2017), may now even re-bid for it. While the state operator Infraero, which has acted as an 'uncle' to the privatisation process since it began back in 2011, and holds on to 49% of the equity at most of the privatised airports (including this one), could be booted out.

There is never a dull moment in this saga, dubbed a 'Soap Opera' in Brazil; it is 14 years old this year, and there is plenty of minor detail to get to grips with.

Read on…

Georgia's airports handled more passengers in 2024 than at any time in their history.

The former Soviet republic's aviation market is small (7.4 million passengers last year 2024), but is growing rapidly (growth of 24% year-on-year).

It has enjoyed a faster recovery from the COVID-19 pandemic than Eastern/Central Europe as a whole.

The government of Georgia has been active in seeking new airline services, attracting 13 new routes and three new airlines in 2024: the entry last year of Austrian Airlines, Transavia and Air China is due to be followed in summer 2025 by the entry of British Airways, easyJet, Transavia France and Edelweiss Air. The government is also seeking more direct services to/from China.

Wizz Air is the biggest airline by seats and passengers in Georgia, where low cost airline seat share has grown over the past 15 years.

However, LCC share has plateaued, and even fallen slightly, in the past two years.

The saga that the opening of Lelystad airport near Amsterdam to commercial traffic (as the permitted aircraft movements at Schiphol Airport have adjusted) has dragged on for at least a decade, and shows no sign of ending.

Schiphol Group's CFO hopes for a resolution in 2025 - but one had been expected in 2024.

At the heart of the matter is the conflict between growth and environmental protection, which means it isn't unique, by any means.

But the circumstances are a little different, where a draconian enforced reduction in aircraft movements for 2025 at Schiphol (albeit less stringent than it originally was) flies in the face of attempts by KLM to maintain and grow its critical hub business there.

KLM would not move to Lelystad - that job would be left to LCCs and charter airlines that have an O&D business model. And Lelystad is ready for them.

But they won't be moving there either, unless a conundrum involving potentially overlapping airspace and - more significantly - a row between government and farmers and the presence of nitrogen can be resolved.

It isn't looking good, and the odds are stacked against it ever happening, as things stand.

Azul and Abra Group have ended months-long speculation of a tie-up by tabling a memorandum of understanding to combine GOL and Azul, which would create Brazil's largest airline group, and solidify Abra's stature as a leading entity in upper South America.

If the arrangement is finalised, Abra would have market leaders in two of Latin America's strategic aviation markets - Brazil and Colombia.

Of course, the companies need to secure requisite approvals for the Azul-GOL combination.

But if Abra and Azul are successful in their endeavours, a new powerful force will emerge in Latin America.

The year 2025 might have got off to a slow start where the air transport business is concerned but the political world now awaits the outcome of territorial and other ambitions of the newly sworn in President Trump that could have huge implications for the aviation industry.

There is going to be a sea change in how countries relate to each other, in the application of business principles, and in attitudes to government, regulation, economic relations, global ambition, the environment and many other things, and in some cases that change could manifest itself in a complete 'volte face' from what has happened in the last four years.

It will take place not only in America. The United States is being prepared to become the undisputed world leader again and that will have reverberations across the globe and include all sectors. The airport sector will not escape, when it eventually comes under the gaze of the US president's cabal of advisors.

For these reasons this Outlook for the airport sector in 2025 is set heavily within the context of political change affecting both it and the wider air transport business, and surveys both the knowns and the unknowns.

This report looks at trends and developments in the airport sector, globally, while also making observations on how external events may influence the sector and air transport generally.

This is the first in an occasional series about small, often regional, airports which have something that sets them aside.

In this one, Punta del Este Airport, on the Uruguayan coast and not far from the capital (Montevideo) comes under scrutiny, along with the town itself.

Punta del Este, with a population of 170,000, might be no more than a small and insignificant town, but a series of natural circumstances and a history of staging international events have combined to turn it into an international jet setters' paradise; much of its high-end tourists come out of Argentina, while its expat population continues to grow, partly to hedge against the impact of political developments in the northern hemisphere.

The question is: does the airport, even if it is ultimately managed by one of the world's leading private sector operators, have what it takes to handle what could amount to a big increase in traffic in the coming years?

Air Lease Corporation executive chairman Steven Udvar-Házy, who has more than 50 years' experience in aviation, does not expect aircraft deliveries to return to normal for at least three or four years.

Neither of the two leading manufacturers, Airbus and Boeing, has been able to meet production targets. However, the scale of the problem is not equal for both of them.

Airbus' 2024 delivery of 766 aircraft was more than twice Boeing's 348, and was the European airframer's sixth straight year of beating its US rival on annual deliveries. Moreover, Airbus' order backlog is 43% more than Boeing's, while both are at record highs.

At 2024 delivery rates, the global aerospace industry will need almost 14 years to clear the logjam of outstanding orders.

This report presents data on passenger aircraft deliveries and the order backlog, both on a global scale and for the two leading manufacturers.

Loganair announced on 9-Jan-2025 that it would join IAG's loyalty scheme in 2025.

Its agreement to adopt Avios as the currency for its ClanLoganair loyalty programme will deepen its relationship with one of Europe's biggest airline groups. Loganair, which styles itself 'Scotland's airline', already codeshares with British Airways.

Loganair is a mainly domestic regional airline with a focus on Scotland. Its international network, only one fifth of its seat capacity, is limited to UK Crown Dependencies (Isle of Man, Jersey and Guernsey), two destinations in Ireland (Dublin and Donegal), two in Norway (Bergen and Stavanger), and one in Denmark (Esbjerg).

Its entry into Avios, on top of its British Airways codeshare, should provide Loganair's customers with further incentives and travel opportunities.

Loganair's decision to join IAG's loyalty scheme also marks another step in its development away from its past as a Flybe franchise.

Meanwhile, after trimming capacity in 2024, Loganair is set to resume modest growth in 2025.

Prospects for the majority of Mexico's airlines look favourable as 2025 gets under way.

Perhaps the one airline exception is the state-owned Mexicana, which opted to cut several routes shortly after it first anniversary and has failed to build up a significant presence in the domestic market over the past twelve months.

While that's not unusual for an airline start-up, it does reflect continued challenges for the airline in its second year of operations.

There is the possibility that geopolitics could create some uncertainty in Mexico's aviation sector.

It's not clear how the threat to impose tariffs on goods from Mexico by the incoming US president could affect the country's economy, and potentially, passenger demand.

But as Mr Trump takes office, perhaps the joint venture between Delta Air Lines and Aeromexico, which has been operating under a threat of dissolution during the last year, could be spared.

The year 2024 having been another disappointing year for airport M&A activities, the business perked up a little with three announcements right at the end of the year: one of them being that RfPs were being sought for a privatisation and improvement contract at Saudi Arabia's Abha Airport, which turns out to be just one of several contracts that will become available in the kingdom this year.

Saudi Arabia is already the most privatised nation in the Middle East where its airports are concerned, and this trend might just spill over into neighbouring states if it can be shown that security issues are not compromised and that the state will always be in overall charge.

For that reason, closely controlled PPP deals using a variety of methods (BOT, BTO, DBFOM etc.) will continue to be the order of the day, rather than wholesale transactions.