Analysis for North America
30-May-2013 9:00 AM
Originally due to arrive in China in time for the country's 2008 Beijing Olympics, the 787 even missed the 2012 London Olympics. Once the aircraft were finally ready in 2012, Chinese certification lagged and then the 787's battery-induced grounding put a further hold on delivery. But now in sight is an end to the saga and start of commercial service of the 787 in China.
Three operators hold 35 orders: China Southern for 10 787-8s, Hainan Airlines for 10 787-8s as well and Air China for 15 787-9s. Xiamen Airlines has a pending order for six 787-8s. China Southern is due to be the first carrier to take delivery and Hainan the second, but Hainan was first to announce deployment plans, which include domestic services and long-haul flights to Chicago, Seattle and Toronto.
But, as a less privileged, private airline, Hainan Airlines could be constrained by its own government on which routes it can use the full 787 fleet, as the airline faces route restrictions out of Beijing, its main long-haul base – as China Southern painfully experienced when it sought to fly from the capital with its A380.
26-May-2013 8:42 PM
Shortly after Virgin America reported losses for 4Q2012, FY2012 and 1Q2013 the carrier added to its list of customer accolades by winning the top spot in customer satisfaction from Consumer Reports. It is a pattern that has been repeated throughout the carrier’s six-year existence – constant praise for its innovative customer service and equally continuous elusive profits.
During the last year Virgin America has made changes that it hopes will reverse its string of losses including slowing its growth, reworking its network to withstand seasonal troughs and attaining relief on some of its debts.
Even as the changes are largely in their infancy, sceptics are right to question the carrier’s staying power and how Virgin America fits into the mature US market place.
24-May-2013 10:00 PM
Mexican low-cost carriers Volaris and VivaAerobus are continuing to build up domestic market share during 2013 as Interjet appears to be holding its own on routes within Mexico while it awaits delivery of its first 93-seat Sukhoi Superjet 100 during 2H2013, when it plans to make a push into markets that are too thin for its current fleet of 150-seat Airbus A320 aircraft.
Volaris and VivaAerobus should continue to grow their share of the Mexican domestic market during 2013 as both carriers have stated an intent to exploit opportunities within Mexico, reflected by plans for each airline to make a push from Cancun to target Mexican travellers with increasing discretionary income.
23-May-2013 11:00 PM
Excitement exuded by Allegiant Air a year ago over its then-impending service launch to Hawaii has been dampened by the realities of operating the market. Allegiant has admitted the dynamics have changed in the US-Hawaii market place since it opted to acquire Boeing 757s during 2009 to link its small market US destinations with Hawaii. Now the carrier is tempering its expectations for its expansion into Hawaii and reining in capacity as a means to bolster its performance from the US west coast to the Hawaiian islands.
Allegiant is likening its seasonal capacity management from the US to Hawaii to adjustments it regularly makes in its Florida markets to properly align its supply with demand. But it is unclear just how firm the airline’s commitment is to Hawaii as it has not assured that some routes undergoing a seasonal suspension will return, and has hinted its Hawaiian operations are likely to be smaller in scale than originally planned.
20-May-2013 8:40 PM
There are 103 A380s in service as of early May-2013. Emirates has 33 and Singapore Airlines has 19, so when assessing network scheduling, these two and their hubs predominate: of the 1,048 weekly A380 flights, 402 are from Emirates alone. Dubai and Singapore airport see the most A380 flights.
But there are some less predictable statistics. The airport to see the most A380 operators is Hong Kong followed by Paris and Los Angeles. The largest A380 destination that is not (yet) an A380-hub is London Heathrow. The UK and USA are the most common A380 destinations after Australia, Singapore and the UAE. Asia, not the Middle East, sees the most A380 flights; South America sees none. Guangzhou-Shanghai Pudong is the shortest A380 route at 1,202km while Los Angeles-Melbourne is the longest at 12,751km. Qantas and Lufthansa have the highest average sector length while Thai Airways is placing the most number of cycles – about two – on its aircraft per day. Qantas and Air France are placing the least (just over one).
17-May-2013 12:10 AM
Delta Air Lines’ scheme to return USD1 billion to shareholders during the next three years is the latest example of how the carrier is widening the competitive distance as its merger with Northwest Airlines is essentially done and dusted. The airline unveiled its plans for shareholder returns after months of prodding by investors that have watched Delta pare down its debt, keep capital spending costs in line and generate solid free cash flow.
At the same time the carrier has set new debt reduction targets, it hopes all its efforts to get its financial house in order will lay the groundwork to achieve investment grade status, something Delta admits it will not attain anytime in the near future.
Through its latest moves Delta is also attempting to prove that the newfound stability in the US airline business has staying power after a decade of bankruptcies and economic turmoil have forced airlines to undergo a major reset.
16-May-2013 9:42 PM
Weakness in long-haul markets from Brazil continued to pressure LATAM Airlines Group during 1Q2013 as competitive capacity increases triggered depressed loads and unit revenues in its international network. But LATAM’s efforts to restore strength in the Brazilian domestic market and the relative strength in the group’s Spanish speaking companies should help to offset some of the continuing pressure in LATAM’s international network.
The company’s attempts to bolster international service during the last year to offset some of the continuing weakness in the Brazilian domestic market have faltered somewhat due to competitive capacity increases by American and United in the US-Brazil market, and LATAM’s own expansion of supply in the market. The company’s overall capacity increase in its international markets during 1Q2013 was 12.3%.
15-May-2013 11:41 PM
Brazil’s second largest carrier Gol recorded mixed fortunes during 1Q2013 as its overall losses widened year-over-year but yields and unit revenues improved at what appears to be at the expense of load factor. After recording annual losses for the last two years Gol is hoping an aggressive capacity reduction in the Brazilian domestic market place and a significant reduction in its workforce will help the carrier slowly improve its fortunes.
But Gol faces challenges in achieving its turnaround as company management believes it is uncertain that Brazil will record 2.5% GDP growth in 2013 while inflation is rising. The carrier feels positive about its position heading into the slow season in South America, but the timing of a full recovery for the carrier seems far from uncertain.