Fiji Airways acting CEO and CCO Aubrey Swift, speaking at the CAPA Australia Pacific Aviation Summit, stated (08-Aug-2013) “there are other fish to fry” than adding capacity on trans-Pacific routes for major US carriers.
Fiji Airways CEO: 'Bigger fish to fry' for US carriers than adding trans-Pacific capacity
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Hawaiian Airlines: enjoying a revenue premium while preparing for crucial new network development
During the first few years of the decade Hawaiian Airlines undertook a massive network expansion that included the addition of more than 10 long haul routes. With a few minor expansions Hawaiian efforts have been successful, reflected in the airline’s more balanced network that features some of Hawaii’s largest origin markets.
Hawaiian begins taking the next steps to fill gaps within its network in 2017. During the year the airline starts accepting deliveries of Airbus A321neos that allow it to serve smaller secondary markets in North America without degrading the company’s cost performance – which is proving to be a challenge in the short term. Hawaiian believes the aircraft is uniquely qualified to handle some of the operating conditions from the region’s islands to the US mainland.
Hawaiian embarks on 2017 enjoying a significant revenue premium above the US industry and the airline continues to strengthen its revenue management techniques to maximise product offerings, including extra legroom seating and new lie-flat premium seating on its Airbus widebody aircraft. The company is forecasting modest capacity growth for the year of 2% to 5%, the bulk of which is driven by new services to Tokyo launched in 2016.
LATAM and GOL: Excess capacity could threaten arrival of crucial recovery in Brazil domestic market
After two years of weak demand and pricing, some signs of stabilisation are emerging in Brazil; however the country’s two largest airlines are adopting an understandably cautious tone in their assessment of the operating environment. Although both LATAM Airlines Brazil and Gol have significantly reduced their domestic capacity during the last year and a half, both airlines have concluded that some excess supply remains in the market place. Fast-growing Azul has opted to slow its capacity growth in 2016, but Brazil’s fourth largest airline Avianca Brazil has continued growth in order to build its market share within the country.
LATAM Airlines Brazil also believes its performance on routes between the US and Brazil is improving, which is a similar conclusion drawn by US airlines operating between the two countries. For LATAM, the improved performance is offsetting some weakness on other long haul routes from its Spanish-speaking countries.
Neither airline has offered specific capacity guidance for 2017, but LATAM Airlines Brazil and Gol are likely to keep their supply restraint intact. Pricing in the domestic market has yet to stabilise, and competitive capacity actions will result in those airlines keeping their own ASK increases at bay in order to sustain a favourable supply/demand balance.