Analysis Reports

In the first part of this report on the relationship between international multilateral development banks, smaller regional investment banks and airports, the raison d'être for their interest in the airport sector was considered, along with their heavy focus on airports satisfying ever-stricter environmental criteria when applying for loans and grants - not to mention the occasional equity investments they occasionally make.

In this second part more of these institutions come under scrutiny. They are contrasted in several ways.

For example, the projects they support can range from a new baggage-handling unit to a state-of-the-art terminal.

Some are strictly regional, while others have a global brief. At least one of the largest domestic banks is more active abroad than at home, in line with the home country's political objectives.

Some, like the BRICS' New Development Bank, are having to transition rapidly as the market they serve and the bank's needs have grown.

Some are more involved with the sector than might be expected, given other available financing options, while others punch below their weight, where their assistance is required to a greater degree.

Also by image. While all promote themselves as the serious institutions they are - one has a slogan more appropriate to a used-car sales outlet.

The common factor to most of them, though, is the one pointed out in part one of this analysis - the ever-growing demand that any airport investment project owner that has asked to be supported by these banks must tick every single box where the environment is concerned.

Turkish Airlines (THY) is investing EUR300 million in Air Europa, a small to medium sized Spanish airline whose fleet is little more than a tenth of that of the Istanbul-based global super-connector. In the week of 25-Aug-2025 THY ranks as Europe's number three airline by seats, whereas Air Europa is 36th.

THY announced on 19-Aug-2025 that its binding offer for a minority stake in Air Europa had been accepted. The "vast majority" of THY's investment will be by way of a capital increase, and its exact percentage stake will be determined at closing. The transaction, which requires regulatory approval, is expected to complete in six to 12 months.

The rationale is based on the complementary nature of the two networks. THY's short haul network is underweight in Spain, which is one of Europe's biggest markets. In long haul, Latin America is THY's smallest market, while Air Europa is third by seats and first by number of destinations between Europe and Latin America.

There are still some uncertainties - not the least, the future for IAG's 20% shareholding in Air Europa.

Nevertheless, THY's investment should pave the way to a close commercial partnership with Air Europa and benefits for both.

Condor Flugdienst's lobbying campaign against Lufthansa has failed to bring about the result that it sought. The final frayed thread in ties between the two airlines that go back 70 years may now have snapped.

A 20-Aug-2025 high court ruling in Duesseldorf upheld Lufthansa's terminating of a long term agreement that had given favourable rates to short/medium haul passengers transferring onto Condor's long haul network.

After Lufthansa ended the agreement in Oct-2024, the German leisure airline cut some long haul routes that it says were no longer viable. Condor's argument that its much larger competitor (and one-time shareholder) was abusing its dominant position in the market has not been successful.

There have been previous twists and turns in this story, and a further twist could still change the decision once more, but for now it seems that Lufthansa cannot be forced to reinstate the SPA once more.

However, Condor is currently pursuing strong capacity growth, upgrading its fleet and contemplating a doubling of its aircraft numbers. Cutting the ties may be good for it in the long run.

The main organisations that are involved with investment into the airport sector have been identified in previous CAPA - Centre for Aviation reports across the classification of pension funds, private equity funds and sovereign wealth funds, while some of the principal operator/investors have also come under scrutiny.

Now it is the turn of the leading International and Regional Development Banks.

In this, the first of two parts, the raison d'être for their interest in this sector is considered, along with their heavy focus on airports satisfying ever stricter environmental criteria when applying for loans and grants - not to mention the occasional equity investments they occasionally make.

This report then moves on to look at some of the larger scale financiers among their ranks, such as the World Bank and its partners, also the Islamic Development Bank and the European Bank for Reconstruction & Development.

One prominent theme emerging from Canada's airline sector in 2025 is a push by the country's airlines into Latin America during the northern hemisphere's winter season.

The pivot towards Latin America is largely in response to dampened demand from Canada to US leisure destinations, resulting from trade policy and geopolitical tensions.

It is not clear that the wave of new service could spur over capacity in some markets, or if the latest US tariff adjustments will trigger more economic uncertainty. But for now, Canadian airlines are moving full steam ahead to bolster their presence in Latin America.

Wizz Air's planned expansion in Italy in the forthcoming winter 2025/26 schedule signals the continued importance of the group's biggest market. It ranks third by seats in Italy in the week of 18-Aug-2025, behind Ryanair and easyJet, but has improved from sixth in the equivalent week of 2019.

Italy has outpaced Europe in the post-pandemic capacity recovery. This has been driven largely by low-cost airlines, in particular by the two ultra-LCCs Ryanair and Wizz Air.

Second-ranked easyJet has not grown capacity by very much since 2019, and Alitalia's successor ITA Airways is still smaller than its predecessor as the national flag carrier.

Nevertheless, backed by Lufthansa, ITA is better placed than Alitalia was to steer a path through, and around, low-cost competition.

Australasian airlines are focusing on narrowbody fleet renewal this year, as the arrival of more modern and capable aircraft types increases their network options.

However, next year 2026 will mean the arrival of new widebodies that will have great significance for Air New Zealand and Qantas long haul services.

Executives from Australasian airlines discussed these fleet developments during the CAPA Airline Leader Summit Australia Pacific held in Cairns 31-Jul-2025 to 1-Aug-2025.

Part one of this analysis discussed how Qantas and Air Niugini are starting the delivery of new narrowbody types this year, and what this means for their operations.

This second part will look at Virgin Australia and Air New Zealand narrowbody developments, as well as widebody strategies for Qantas, Air New Zealand and Virgin Australia.

The Middle East is a region where airports are often required to regroup and fight their way back from an adversity that has nothing to do with the air transport business.

Beirut's is a case in point, while those in Iraq have frequently had to surmount problems, along with those in Jordan and in Israel, and nearby in North Africa in Libya.

The 14-year long civil war in Syria, which ended in Dec-2024 but hasn't really ended, took its toll on all the country's airports. Now, out of the blue (and somewhat surprisingly), a five-member consortium has been formed to rebuild Damascus International Airport at a cost of USD4 billion - effectively to build a new airport, as much of the funding will go towards a brand new terminal.

The investors, based in Qatar and Türkiye, have between them (mainly the Turkish ones) a great deal of experience in operating large airports. There is a possibility they could call in some Development Bank support to boost the financing.

Moreover, they have the backing at the moment of various governments, some of which have re-established diplomatic ties with Syria and have promised to provide aid (but not to build airports with), although the US is still playing its cards close to its chest.

The signs generally are good; but countries do not exit civil wars just like that, as the examples of Lebanon and Libya confirm.

It could well be a risky investment for all concerned.

Australasian airlines are focusing on upgrading their narrowbody fleets this year 2025 to tap into strong domestic and international short haul demand, although there are also some notable widebody additions on the horizon for these airlines.

Qantas has begun taking delivery of its first Airbus 321XLRs, which will form the backbone of its domestic narrowbody fleet and also offer new international opportunities.

Meanwhile, Virgin Australia is set to receive several more Boeing 737 MAXs, and Air New Zealand has boosted its short haul operations with new Airbus A321neos.

In neighbouring New Guinea, Air Niugini is also slated to begin taking delivery of Airbus A220s.

While there are no widebodies scheduled for delivery this year, both Air New Zealand and Qantas have aircraft that are due to arrive in 2026 that will herald new long-range services and cabin products.

Virgin Australia is considering widebody orders, but expects to take a few years to decide, based on the success of its wet-leased Boeing 777 operations.

Senior executives from these airlines discussed their fleet plans during the CAPA Airline Leader Summit Australia Pacific held in Cairns from 31-Jul-2025 to 1-Aug-2025.

Croatia Airlines' summer 2025 flight schedule involves five new routes from Zagreb and represents an 8% increase in the number of flights, and an 18% increase in seat capacity compared with 2024.

This expansion has been enabled by the delivery of five A220-300s since Jul-2024, which are part of Croatia Airlines' fleet replacement programme. This project is replacing its A320 family and Bombardier Dash-8 fleets with an all-A220 fleet.

It is managing the transition against a backdrop of its long-term downward trend in market share in Croatia, accompanied by increasing LCC share.

The fleet renewal programme is hitting Croatia Airlines' profitability - it reported losses in 2024 and in 1H2025 - but it should reap long-term benefits.