- Passenger numbers: 2.5 million, +0.9% year-on-year;
- Full service carriers: 2,133,104, +1.5%;
- Low-cost carriers: 263,835, -6.3%;
- Cargo volume: 37,394 tons, -2.1%;
- Aircraft movements: 24,470, -1.9%;
- Full service carriers: 18,711, -0.8%;
- Low-cost carriers: 2000, -12.0%.
Zurich Airport pax up 1%, cargo down 2% in Jul-2012; LCC pax down 6%
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Lufthansa Group-Singapore Airlines JV Part 3: JV to support expanded Singapore-Europe capacity
The new Lufthansa Group and Singapore Airlines (SIA) Group joint venture open up opportunities for additional capacity from Singapore to Germany and Switzerland. Lufthansa is confident the improved connectivity beyond Singapore which comes with the JV will help support higher traffic and capacity levels while SIA will benefit from improved connectivity beyond its three German and Swiss gateways.
The two airline groups recently already added over 1,100 weekly one-way seats from Singapore to Germany and Switzerland, representing expansion of 8%, ahead of the formal start of the JV. The expansion included the launch of flights by SIA to Dusseldorf, a route that likely would not have been viable without the JV, and the up-gauging of flights to Singapore by Swiss from A340s to 777-300ERs.
Both airline groups are now considering further capacity increases as well as new routes. Lufthansa is looking at using its new A350 fleet to resume Singapore-Munich, which would supplement its daily Singapore-Frankfurt A380 service and give the group 21 weekly frequencies and nearly 8,000 weekly one-way seats under the JV compared to 31 frequencies and nearly 10,000 weekly seats for SIA.
Lufthansa still Number 2 vs IAG & Air France-KLM. Soft RASK justifies more ASK trimming for all
Lufthansa Group's detailed 2Q2016 results confirmed the headline numbers that it pre-released with a profit warning on 20-Jul-2016. After increasing its operating profit in 1Q, the group suffered a decline in 2Q. Among Europe's big three legacy airline groups, Lufthansa was the only one to report lower 2Q profits. In 1H2016, IAG again has the best operating margin of the three, followed by Lufthansa and then Air France-KLM. However, LCCs Ryanair and Wizz Air are more profitable than any of them.
Lufthansa's full 2Q report provides an opportunity to compare the capacity growth and unit revenue performance of each of the Lufthansa Group, Air France-KLM and IAG for 2Q2016. Unit revenue has been soft for some time for all three, but seems to be weakening further. Lufthansa cautioned that advance bookings, especially on long-haul, have declined significantly, citing repeated terrorist attacks in Europe and greater political and economic uncertainty.
Against this backdrop, IAG and Lufthansa have reduced their capacity growth plans, while Air France-KLM has retained its 1% ASK growth outlook for its network airlines. CAPA's analysis highlights the inverse relationship between capacity growth and RASK growth. Further capacity haircuts may follow.