CAPA Fleets Analytics
- CAPA Analysis
- Fleet Search
- Worldwide Fleet Analytics
- Fleet Orders
- Fleet Deliveries
- Fleet Age Comparison
- Aircraft Capacity Comparison
- Aircraft Operating Data
- Fleet Rankings
January, as befitting the two headed Roman God who gives his name to the month, is a time for reflection and expectation.
So Oriel, CAPA's partner in leading fleet data, has put commercial aircraft values under the spotlight. With the usual turbulence in the industry compounded by the multiple flow on effects of the oil price slump, 2015 looks likely to be another year where staying agile - and knowledgeable - will be essential.
This report covers the outlook for each of the main categories of aircraft: in-production narrowbodies; out-of-production narrowbodies; in-production widebodies; out-of-production widebodies; widebody freighters; regional jets; and turboprops - along with a global overview.
CAPA's Airline Fleet and Finance Summit, 2/3 March 2015:
As LCCs across the intensely competitive short-haul Asian market rethink their business models in light of the Ultra-LCC model success in Europe and North America, questions are being asked as to how they can successfully differentiate their offerings to improve profitability. Unbundling the product offering is one strategy, while pursuit of a greater share of the corporate market or tapping regional markets are other responses. Meanwhile the low cost-long haul model will continue to evolve in 2015 and more connections within the region and particularly to the Middle East Europe are likely.
The common factor however is the large number of aircraft deliveries needing to be financed by these airlines, as well as traditional airlines in the region. But financiers are concerned about backing the airlines that will be the winners in an evolving marketplace.
VietJet Air is planning to focus on domestic expansion and growing its North Asian network in 2015 as Vietnam’s leading LCC again aims to double in size. VietJet is seeking to grow further its share of the Vietnamese domestic market, which has already surpassed 30%, while launching services to China, Hong Kong and Japan.
VietJet Air roughly doubled its fleet and traffic in 2014, ending the year with six million passengers and almost 20 aircraft. The airline aims to again double passenger numbers in 2015 as the fleet is expanded by about another 10 aircraft.
But VietJet has made a major and sensible strategic adjustment in deciding to focus primarily on the domestic market. Plans for acquiring widebody aircraft and entering the long-haul sector have been delayed for at least three years. Instead VietJet is considering regional aircraft, which would be used to further bolster its domestic position.
San Diego International Airport capped off a solid 2014 with roughly 5.9% passenger growth, buoyed in part by long-haul flights to Tokyo and continued expansion by the facility’s largest airline, Southwest Airlines.
It is welcome growth for an airport attempting to attract new international offerings with a finite amount of space and operational constraints stemming from the location of the airport’s single runway.
After failed attempts in the middle of the last decade to relocate the airport to an area that would support potentially substantial economic growth for the community, San Diego finds itself working to maximise the offerings of its existing footprint through a two phase expansion to increase passenger throughput. The constraints place San Diego in an unenviable position as it competes to capture international service, but it is having some wins.
In Jan-2015, Virgin Atlantic Airways launched a new global brand campaign. Its central message is "the world doesn't come to you, so go to it". The campaign plays to the enduring qualities associated with the brand's strengths, such as aspiration, service, passion for travel and innovation. However, under its new ownership, it coincides with network changes that are necessary to improve Virgin's profitability, but which reduce the airline's ability to take its customers to "the world".
Virgin Atlantic still offers international destinations in five continents (excluding Europe) and remains the UK's number two intercontinental airline, but in 2015 it will withdraw from Tokyo, Mumbai and Cape Town, while increasing its capacity to the US. In its 2015 summer's schedule, 72% of Virgin Atlantic's international seat capacity will be deployed to North America, compared with 58% two years ago. The word 'Atlantic' in the airline's name is more appropriate now than for many years.
Air Canada during the last couple of years has worked diligently to repair its balance sheet, improve its leverage and reduce costs; as a result it is now beginning to enjoy some of the fruits of its labour by meeting its return targets and sustaining liquidity well above its minimum threshold.
The Canadian flag carrier has also undertaken a network revamp that includes the creation of its low cost subsidiary rouge and a push into long-haul international markets, leveraging its position as Canada’s leading global airline.
But Air Canada faces challenges as it works to sustain profitability from its familiar foe WestJet, as well as potential new entrants eager to execute the ULCC model within Canada. The airline will no doubt have focussed on these threats, and be aware there is still much to prove as its efforts to transform its business continue.
This CAPA analysis of Air Canada's strengths, weaknesses, opportunities and threats continues a series on global airlines.