South African Airways chief strategy officer Barry Parsons, speaking at the CAPA Australia Pacific Aviation Summit, stated (09-Aug-2013) sporadic capacity growth at African airports “creates a lot of imbalances in hubs.”
SAA CSO: Sporadic capacity growth at African airports creating hub 'imbalances'
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South African Airways seeks regional growth and new partnerships, but outlook remains bleak. UPDATE
South African Airways (SAA) is again looking at opportunities for new partnerships and network expansion. SAA is now re-engaging with Etihad following an unsuccessful initial partnership and is keen to launch new routes after the delivery of its first two A330-300s in 4Q2016.
Any growth, however, is unlikely to be profitable until SAA addresses its longstanding challenges. The airline has still not fully implemented its previous turnaround plan and urgently needs yet another capital injection.
A full and deep restructuring is required but seems impossible in the current political environment. Repeated government meddling has put SAA in an extremely challenging situation. The airline is in dire straits, and its outlook remains bleak.
Ryanair, easyJet, Norwegian, Wizz Air, Pegasus Airlines: Europe's top LCCs' collective margin drops
CAPA's previous analysis of the 3Q2016 results of Europe's big three legacy airline groups highlighted a fall in their collective operating margin, after growth in 1H2016. This report shows that Europe's five leading LCCs, in aggregate, also suffered a fall in profit and margin in the quarter.
Three of the five – Ryanair, Norwegian and Wizz Air – improved their profit margin in the quarter, but easyJet's drop in margin was heavy enough to bring down the collective result. Pegasus' margin also declined.
Nevertheless, the LCC five remain collectively far more profitable than the legacy three. Moreover Europe's two most profitable airlines, Ryanair and Wizz Air, look set to increase their margin lead this year. Even easyJet, which has had a bad year by its standards, achieved a higher margin for calendar 9M2016 than the most profitable of the big three legacy groups, which was IAG.
The divergence of results in the European sector suggest that not all airlines are following the same cycle. However the collective margin decline for the continent's leading LCCs, and its major legacy airline groups, at least gives reason to question whether or not the cyclical upswing may have run its course.