My Account Menu

CAPA Login

Username:
Password:
Forgotten password? Create Account
CAPA Profiles

Dubai shows fastest airport seat capacity growth, Beijing challenges Atlanta as largest airport

3rd September, 2013

Beijing Airport remains on the brink of becoming the world's largest airport, Dubai International Airport is fastest growing, rising to fifth place worldwide, while Madrid and Rome Fiumicino languish.

It is interesting to compare IATA’s recently revised global traffic demand projections for 2013 with those airports that offered the greatest amount of seat capacity in 2012 and 1H2013 (to end June) and with those airports that are preparing for traffic increases by constructing additional infrastructure.

IATA upgraded its global outlook for the airline industry at the beginning of Jun-2013.

It now predicts revenues for the year will hit USD711 billion, with airline industry profits to rise from USD10.6 billion to USD12.7 billion with a net margin of 1.8% and a return on invested capital of 4.8%.

IATA predicts three billion passengers in 2013, for the first time

In terms of passenger traffic these results will be generated by 3.13 billion passengers, the first time the three billion mark has been passed in a single year, with airline capacity up by 4.3%, demand by 5.3%, average load factor at 80.3%, and passenger yields up by 0.3%.

These rather promising, if not exactly spectacular, figures are predicated on certain assumptions, namely that oil prices will average USD108 per barrel (-USD1.5 from the previous forecast earlier in 2013) compared with a USD111.8 average for 2012; that global GDP growth will be 2.2%, up from 2.1% in 2012; and that trade growth will hit 4%, up from 2.5% in 2012.

Will oil prices really halve?

Some of these assumptions are remaining broadly accurate. At the time of writing a barrel of Brent crude is averaging USD103 - but prices have been rising again. An article in the (London) Times in Jul-2013 however suggests that the Shale Gas & Oil revolution, which is gripping the US and the UK in particular right now, could halve the price of oil. The prediction was made by the former head of international forecasting at the Organisation for Economic Co-operation and Development, who said most oil price forecasts have underestimated radically the impact of new extraction techniques for shale oil and gas on supply. Much will depend on public acceptance, which varies from country to country.

The GDP growth rate is in line with other forecasts and as for trade growth, countries such as the UK are reporting signs of an export-led recovery while Spain’s exports grew by a record amount in 2012 and the country posted its first trade surplus since 1971 in Mar-2013. There are hopes this export boom could help bring Spain’s crippling recession to an end, even in this quarter.

Returning to the IATA forecast, the regional breakdown identifies the Middle East for the biggest hike in both airline seat capacity (+12.6%) and passenger demand (+15%) in 2013. Second is Latin America, with seat capacity up by 7.8% and demand by 9.8%, followed by Africa (+6.7% and +7.5% respectively). In a perhaps surprising fourth place comes Asia-Pacific, with +5.6% capacity and +6.3% demand, supported by what IATA calls “buoyant trade flows and other business activities.” Next is Europe, where capacity will increase by 2.7% and demand by 4%, with North America trailing in last with +0.7% and +1.7% respectively.

What is evident from the IATA forecast is that demand is expected to outstrip supply in every regional case. The peculiarity is that both the revised forecast and recent results are not so promising for the airfreight sector, which is stagnant. Weak or declining freight loads usually precede falling passenger traffic but on this occasion it appears to be the other way around.

It is equally illuminating to examine which airports offered the greatest amount of seats in 1H2013, in which regions they are located, and how the data compares with 2012.

Of the top 100 airports ranked by the number of seats offered by airlines in 1H2013, 32 are in Asia-Pacific, 31 in North America, 24 in Europe, six in Latin America, five in the Middle East, and just two in Africa, at either end of that continent: Johannesburg and Cairo.

This suggests that the ‘old western world’ is still holding its own though far less of the Asia-Pacific airports and possibly none of the Middle Eastern ones would have featured as recently as 10 years ago.

Global airport ranking by number of seats: 1H2013

As for the top 10 airports, the distribution tips in favour of North America over Asia-Pacific, with Europe falling away, offering only London, in third place, and Frankfurt in 10th. The Middle East is able, through Dubai, to be represented.

Top 10 airports by number of seats: 1H2013

The top 10 airports by seat capacity: 1H2013

 

Airport

Region

1

Atlanta Hartsfield-Jackson Intl Apt

N AM

2

Beijing Capital Intl Apt

AP

3

London Heathrow Apt

EUR

4

Tokyo Haneda Apt

AP

5

Dubai International

ME

6

Chicago O'Hare International Apt

N AM

7

Los Angeles International Apt

N AM

8

Dallas/Fort Worth Intl Apt

N AM

9

Hong Kong International Apt

AP

10

Frankfurt International Apt

EUR

The top 10 airports by seat capacity: 2012

 

Airport

Region

1

Atlanta Hartsfield-Jackson Int Apt

N AM

2

Beijing Capital Intl Apt

AP

3

London Heathrow Apt

EUR

4

Tokyo Haneda Apt

AP

5

Chicago O'Hare International Apt

N AM

6

Los Angeles International Apt

N AM

7

Frankfurt International Apt

EUR

8

Dubai International

ME

9

Paris Charles de Gaulle Apt

EUR

10

Hong Kong International Apt

AP

Beijing Airport is set to overtake Atlanta’s seat capacity

No gain has been made by Beijing Airport, which is expected to overtake Atlanta eventually and settle into first place for a long time. Beijing did overtake Atlanta in Jan/Feb and May-2013, may do so again in Oct-2013, and it will soon become a regular feature.

It is evident even from a cursory glance at the tables above that the most significant mover in the last six months has been Dubai International, which leapfrogged Frankfurt, Los Angeles LAX and Chicago O’Hare airports from eighth to fifth place.

Dubai International Airport is one of largest airports in the Middle East, among the largest airports in the world, as well as being a key cargo hub in the region. The airport has seen phenomenal growth in the past decade, which has come mainly with the expansion of home carrier Emirates though the airport has benefited from increasing service from carriers around the world as Dubai has gained prominence as a tourist destination and business centre. 100% of the seats offered are on international services.

Dubai International Airport capacity (seats per week, all carriers): 05 to 11-Aug-2013

But Dubai International is located in a built-up urban area, and to cater for expected growth the facility will be complemented by the larger, but more distant, Al Maktoum International Airport, also known as Dubai World Central.

No obvious global airport trend

The trends affecting the next batch of airports, those ranked from #11 to #50 by seat capacity in 1H2013 versus 2012 is intriguing because there is no much in the way of a global trend to observe. In the US (and CanadaToronto), nine airports moved down the rankings, which is in line with expectations as capacity continues to be crunched there, but three managed to move up and in one case there was ‘no change’. In Asia-Pacific the trend was for slightly more airports to move up (10) versus down (4) with two ‘no changers’ as might be expected in a very large region where the LCC capacity boom hasn’t petered out yet.

Airports ranked from #11 to #50 by seat capacity: 1H2013 vs 2012

 

Airport

Region

Pos 2012

Pos change

11

Paris Charles de Gaulle Apt

EUR

9

2

12

Jakarta Soekarno-Hatta Apt

AP

14

2

13

Singapore Changi Apt

AP

12

-1

14

Guangzhou

AP

17

-3

15

Bangkok Suvarnabhumi International Apt

AP

13

-2

16

Shanghai Pudong International Apt

AP

18

2

17

Istanbul Ataturk Airport

EUR

20

3

18

New York J F Kennedy International Apt

N AM

16

-2

19

Denver Intl Apt

N AM

15

-4

20

Kuala Lumpur International Airport

AP

22

2

21

Amsterdam

EUR

21

n/c

22

Seoul Incheon International Airport

AP

24

2

23

Charlotte

N AM

26

3

24

Madrid Barajas Apt

EUR

19

-5

25

San Francisco International Apt

N AM

23

-2

26

Sydney Kingsford Smith Apt

AP

28

2

27

Munich International Airport

EUR

25

-2

28

Phoenix Sky Harbor Intl Apt

N AM

27

-1

29

Las Vegas McCarran International Apt

N AM

30

1

30

Miami International Apt

N AM

33

3

31

Houston George Bush Intercontinental Apt

N AM

31

n/c

32

Delhi

AP

32

n/c

33

Sao Paulo Guarulhos Intl Apt

LATINAM

40

7

34

Rome Fiumicino Apt

EUR

29

-5

35

Shanghai Hongqiao International Apt

AP

36

1

36

Tokyo Narita Apt

AP

37

1

37

Mumbai

AP

41

4

38

Newark Liberty International Apt

N AM

35

-3

39

Toronto Lester B Pearson Intl Apt

N AM

38

-1

40

Barcelona Apt

EUR

34

-6

41

Orlando International Apt

N AM

43

2

42

Taipei Taiwan Taoyuan International Apt

AP

42

n/c

43

Manila Ninoy Aquino International Apt

AP

39

-4

44

Minneapolis International Apt

N AM

46

2

45

Mexico City Juarez International Apt

LATINAM

53

8

46

Philadelphia International Apt

N AM

44

-2

47

Melbourne Airport

AP

49

2

48

Detroit Wayne County

N AM

47

-1

49

Chengdu

AP

50

1

50

London Gatwick Apt

EUR

45

-5

The pain in Spain falls mainly on the plane

But it is individual airport rankings that catch the eye whatever their geographical location.

One of the largest fallers is Madrid’s Barajas Airport (-5 places), where both Ryanair and easyJet (which collectively still have a combined 12.6% of seat capacity) have slashed that capacity in an ongoing dispute with AENA over airport charges; where Iberia (42.3% capacity) has been slashing long-haul routes to Latin America, will curtail short and medium-haul next, and faces the real threat of being put out of business despite a recently reported rally; where the economy is general is still in intensive care but where there are high hopes that the more cost efficient Vueling (just 3.3% of the capacity), newly acquired by IAG, can save the day.

Madrid Airport capacity (seats per week, all carriers), 05 to 11-Aug-2013

But Spain’s other major gateway airport, Barcelona, has slipped even further, by six places in the table.

Barcelona is much more reliant on Vueling than is Madrid.

Vueling has its headquarters and main base there, and engages in hubbing activities on quite a scale, unusually so for an LCC. Presently, it is responsible for 40.3% of Barcelona’s seat capacity. The seat availability mirrors passenger traffic that fell continuously each month from Nov-2012 to Apr-2013.

Barcelona Airport capacity (seats per week, all carriers), 05 to 11-Aug-2013

Spanish media reports that Barcelona’s passenger traffic may exceed that of Madrid Barajas International Airport for the first time during summer 2013 due to the aforementioned Ryanair and easyJet cuts at Madrid. But to do that airlines based there have to offer more seats and based on these figures there is little incentive to do that. It is really a case of which of the two airports will deteriorate more than the other in the immediate future.

The other two airports tumbling down the mid-table rankings are Rome’s Fiumicino Airport and London Gatwick Airport (both minus five places), while Manila’s Ninoy Aquino Airport fell by four.

Dwindling seats offered at Rome Airport match reduced passenger numbers over 18 months

In the case of Fiumicino (FCO), Italy’s premier international gateway airport, the dwindling capacity in the first half of 2013 again mirrors a consistent fall in passenger numbers that dates right back to the beginning of 2012. To make matters worse, FCO has been operating beyond its nominal capacity of 35 million ppa for some time.

At least there are plans for a huge building programme (see later). FCO is dominated by Alitalia, which is hardly in the best of health and has not recovered since it was last resurrected in 2009. It is not expected to break even until 2015. Indeed, like post-election Italy, Alitalia in 1H2013 was leaderless, devoid of cash and unsure about its future.The ‘new Alitalia’ hasn’t proved to be the success that was hoped for. It lost EUR280 million in 2012, bringing its cumulative net loss to EUR843 million since it was created in 2009.

Rome Fiumicino Airport capacity (seats per week, all carriers), 05 to 11-Aug-2013

Gatwick Airport in limbo

London Gatwick Airport is stuck between a couple of rocks and several hard places at the moment.

Following its takeover by GIP in 2009, Gatwick adopted a position of ‘London’s O&D airport’ but in the light of the further break-up of BAA’s airport portfolio it has the opportunity to compete (along with Stansted and other airports) for the hub traffic that was the domain of Heathrow Airport. But only if and when it gets a second runway - which it legally cannot until 2019 - as it is capacity constrained for most of the day, and if the Davies Commission on UK airport capacity comes down on its side.

If Davies does not do that it might have to settle for ‘Crawley’s O&D airport’. In the meantime, with its charter airline base in decline, British Airways having successively reduced its presence, some new long-haul services not having succeeded and renewed pressure from Stansted Airport, it is in something of a no man’s land for the moment, unsure which way to turn. It is spending quite a lot of cash on refurbishment (GBP1.5 billion), but it is additional tarmac it really needs.

For now Gatwick has become disconcertingly dependent on easyJet, which has almost 45% of capacity and which operates to over 100 airports from there. But how much more can it add? In the interim BA’s presence has shrunk to 16.6% of capacity while the loss-making Flybe will exit all its slots as it claims it cannot afford to operate them. EasyJet may take some of them.

The future may lie with airlines such as Norwegian, which has built a sizeable base, keeps expanding it, and already accounts for over 6% of capacity. There is little prospect of Ryanair expanding its presence as it appears it will sign a big deal with Stansted Airport.

London Gatwick Airport capacity (seats per week, all carriers), 05 to 11-Aug-2013

Manila's Ninoy Aquino Airport unlikely to generate confidence for airlines

Away from Europe, Manila’s Ninoy Aquino International Airport (NAIA) also fell four places in the table. NAIA faces a continuing battle with the Clark International Airport (previously known as Diosdado Macapagal International Airport), about 50 miles (80km) northwest of Manila but close enough to the metropolitan city-region, and which has been identified - somewhat optimistically - as a potential replacement for the troubled NAIA for several years.

In Apr-2013 the Secretary of the Department of Transportation and Communications began considering three options for the development of the country's major airports serving Manila. The options are shutting down and selling NAIA and expanding Clark International to act as a replacement; developing both airports until 2025 while constructing a new international airport; and developing the existing airports and delaying a decision on a potential new airport.

These options are actually a reprieve for NAIA. Previously, the direction being taken was to move all NAIA’s current operations to Clark International Airport within the next five to seven years. Now it seems that Clark will more likely specialise in budget airline traffic; a new terminal will be built accordingly to take capacity to five million passengers p/a. But governments have been known to change their minds in Asia-Pacific, especially where budget terminals are concerned. Not so long ago the ‘direction’ seemed to be gravitating towards a full size and scope terminal for Clark. It could do so again.

As if to prove the point, on 04-Jul-2013 the Transportation Secretary stated the government plans to construct a low cost carrier terminal (LCCT) at NAIA, adjacent to terminal three. The proposed terminal would handle domestic and international services operated by Cebu Pacific and Zest Air, and would provide additional capacity to support operations at terminal three.

In the circumstances airlines cannot be expected to have too much confidence in NAIA. Traffic grew by 62% in 1Q2013 at Clark (albeit from a small base). NAIA is in fact growing, but not by anything like that rate. In NAIA’s favour is that it has broad base of traffic with the three main carriers being Cebu Pacific (LCC); the recovering Philippine Airlines (flag carrier/network); and PAL Express (LCC).

Manila Ninoy Aquino International Airport capacity (seats per week, all carriers): 05 to 11-Aug-2013

Sao Paulo's Guarulhos and Mexico City Juárez International lead the charge in Latin America

The two big gainers in the #11-#50 table are São Paulo’s Guarulhos Airport (+7 places) and Mexico City’s Juárez International (+8 places), both of which are capacity constrained.

Guarulhos International Airport, recently rebranded for no obvious reason as GRU Airport, is the busiest airport in Brazil and the country's main international gateway, serving Brazil's commercial centre and biggest city, São Paulo, which is 25km distant. But with slot restrictions limiting it to 45 operations an hour it also has a poor record for delays.

It was one of the first airports to be privatised in Brazil, with state-owned Infraero retaining a 49% stake after a 20-year concession was awarded to a consortium. The privatisation kick-started a delayed new terminal building (T3), whose opening in 2014 should, with other improvements such as high-speed taxiway exits and runway widening, double capacity to 60 million ppa.

Guarulhos is dominated by Brazil’s two leading airlines, Gol and TAM. Gol has been losing money in each of the last two years but that has not stopped its expansion and fleet growth while TAM is still coming to terms with its merger with Chile’s LAN. The airport is now served by all major North American and Latin American carriers.

Sao Paulo Guarulhos International Airport capacity (seats per week, all carriers): 05 to 11-Aug-2013

Mexico City’s Juárez International Airport is the second busiest airport in Latin America by passenger numbers after Guarulhos and operates at capacity at peak hours and over capacity in some cases. Juárez serves as a hub for Aeromexico and Interjet, which count for over 61% of its capacity and is served by most major North American and Latin American carriers, as well as by the principal European ones.

Mexico City Juarez International Airport capacity (seats per week, all carriers): 05 to 11-Aug-2013

Urgent meetings have been taking place to relieve congestion at the airport by reorganising slots and slot restrictions have been imposed. But as with some of the other countries mentioned here the real issue is whether there should be a replacement facility built. As with São Paulo’s airports the growth in neighbourhoods around the airport leave little room for expansion at the current facility, with the suburb of Texcoco being mentioned frequently as a possible site for a new airport.

Also in the frame is the expansion of facilities at the partly privately-owned Toluca Airport, some 40km from downtown Mexico City in a commercial area. Toluca is on the way to becoming a low-cost base for Mexico City, serving as an alternative hub for Interjet, which has bravely invested in 20 Sukhoi Superjets. It could be argued that Toluca, with its very long runway (4200m) is underused but the alliances remain centred on Juárez at least for now.

However, the Air France Director General for Mexico recently commented that Juárez needs infrastructure improvements before it is able to accommodate larger aircraft, potentially opening the door to Toluca’s operating company to press its case.

With the capacity restrictions at some of these airports, does airport construction and capital expenditure tally with seat capacity data?

It certainly does in the Gulf, where Dubai Airport moved up three positions in the seat capacity league in the first half of this year. Of the USD45 billion airport cap ex that is current or planned in the immediate future in the Middle East, approaching USD10 billion of it is in Dubai, at the existing airport or the Al Maktoum/Dubai World Central facility.

Separately, a new airport, Hamad International, is set to open in Qatar by the end of the year and Abu Dhabi is adding a massive midfield terminal, at a combined cost of over USD20 billion.

These airports are basing traffic, and therefore seat capacity, projections largely on transfer traffic; there is still a comparatively small amount of O&D traffic at Dubai or the other two Gulf hubs. That isn’t the case in Turkey though, where Istanbul Ataturk Airport moved three places up the rankings in 1H2013, and where USD6.5 billion will build possibly the last of the giant airports, one ultimately capable of 150 million passengers per annum, also at Istanbul. While a lot of that will also be 6th freedom transfer traffic Turkey does have the advantage of having a sizeable population and it attracts swathes of tourists from across Europe and beyond. That O&D base must give it an advantage in the long term over the Gulf airports, which do not really have such indigenous traffic.

Despite Rome’s Fiumicino Airport falling five places in the seat capacity rankings, its building programme is huge and possibly the lengthiest so far. Aeroporti di Roma will finally complete its USD12 billion investment into the makeover of Fiumicino Airport in 2044. This is well beyond the boundaries of the foreseeable and forecastable future and prompts the question as to whether anyone knows what the air transport business will look like at that time.

The overall figures are impressive. As of this month (Aug-2013) the total amount of airport cap ex under way or promised in a way that suggests it will go ahead (the benchmark is a 50% likelihood) totals, conservatively, USD320 billion globally. The projects included are runways and terminal buildings of course (irrespective of who is paying for them) but also cargo and maintenance facilities and ‘airport cities’ that are projects either sponsored or supported by the airport authority.

For further airport information from CAPA, see: CAPA unveils comprehensive Airport Data suite - Capex, Charges, Investors, Traffic and more

Data on airport rankings and on construction/capex forms part of a new and comprehensive suite of airport related products recently released by CAPA.

Other features include databases on ownership and privatisation; charges and benchmarking; traffic; route analysis and fares. Click on the banner below for a Free Trial...

CAPA employs a leading team of writers and analysts positioned around the world. Find out more about CAPA's regional and global analysts.
Feedback or comments? Please email us your comment or feedback on this article.