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Aeroflot reports (31-Aug-2012) the following traffic highlights in Jul-2012:
Wizz Air: why Europe’s second lowest cost producer may be looking for fresh capital: IPO time?
The fast-growing Wizz Air Group, privately owned and not subject to the same financial and traffic reporting requirements as publicly listed companies, has remained a mystery when it comes to its cost structure and profitability. CAPA has obtained and analysed detailed financial and operating data and the results are presented in this article. The group’s cost base is certainly low – it has the second lowest unit costs among European carriers, with CASK more than one third lower than easyJet’s, and a track record of cutting ex fuel unit costs. This cost structure, built mainly on Europe's most productive and low-cost labour force, has helped Wizz Air to a strong market position in Central and Eastern Europe, where it was the leading LCC in the 12 months to Mar-2013.
Its last reported financial year (to Mar-2012) saw a healthy EBIT margin of 5.8%, after seeing net losses in six of the previous seven years, suggesting that the business may be maturing. Wizz's closest competitor, with overlap on around one quarter of its routes, is Ryanair, whose unit costs are 14% lower than Wizz Air’s. Ryanair is growing strongly in the region and this could threaten Wizz Air’s goal to become its largest carrier over the next decade unless it can continue to lower unit costs.
Eurocontrol flight movement forecasts to 2019: go east, young man
Eurocontrol’s impressive medium term forecast of flight numbers in Europe, covering 44 markets for the period 2012 to 2019, sees an average growth rate of 2.3% p.a. under its base case. It contains a number of key points concerning recent trends and the outlook for European airlines. Eurocontrol sees the weak traffic environment of 2012 continuing in 2013, with another year of falling flight numbers and winter seasons especially weak. However, it forecasts a recovery in 2014 and that Turkey will lead the superior growth of Eastern countries both in 2013 and through to 2019. Airport capacity constraints and competition from high speed rail are forecast to cut 1.6% from the total of flights in 2019.
For charter carriers, 2012 brought some welcome relief as flight numbers recovered from the impact of the Arab Spring in 2011, although they are still on a longer term downward trend. Traditional carriers saw a fall in their share of flights in 2012 and this looks set to continue as LCCs are projected to increase their share further (especially in Central and Eastern Europe). The main point of comfort to traditional carriers is that growth rates to destinations outside Europe are forecast to be higher than within Europe.