Geneva Airport

SWISS: is the star in the Lufthansa Group starting to fade?

Since its takeover by Lufthansa in 2007, SWISS has outpaced its parent’s passenger growth and has been the most profitable carrier in the Group. SWISS’ long-haul network, significant for a carrier of its size, reflects the combination of a small domestic market with an affluent population. Moreover, its long-haul market position is strong.

Playing to its strengths, ASK growth of 2.7% in 2013 will focus on long-haul, specifically driven by SWISS’ new Singapore route and additional capacity on New York and Beijing, while short/medium-haul capacity is reduced.

On the other hand, operating profit has been on a declining trend since 2007. For some years, unit costs have been falling, but unit revenues have been falling faster. Moreover, analysis of its unit costs reveals its CASK to be among the highest in Europe. While the Lufthansa Group expects to beat 2012’s operating result this year, SWISS is only targeting a similar result to last year, suggesting that its period of over-achievement may be ending.

Air China to expand European presence, further becoming largest Chinese airline on the continent

Air China is building on its reputation as China's flag carrier with an expanded schedule to Europe, increasing frequency on existing services and also opening two new routes: Beijing-Geneva and Chengdu-Frankfurt.

Air China's service will be the first Chinese one to Geneva while Chengdu-Frankfurt represents the first route from a Chinese carrier originating in a secondary Chinese city. Several secondary Chinese cities - many of them very large - are growing faster than traditional coastal areas and have also been the expansion target – out of opportunity and necessity – of European airlines.

Air China, which of China's 'Big Three' has the largest portion of its capacity in international markets, will cement its position as the largest carrier between China and Europe, and twice that of its nearest competitor (and Star Alliance partner), Lufthansa. Air China is also the seventh largest carrier between Europe and Asia-Pacific, thanks to its service to a number of smaller European cities, where it holds market leadership, unlike in major cities where it is typically overshadowed by Europe's main hub carriers.

Air Canada touts continuing transformation as 2Q2012 losses widen

Two major elements driving Air Canada’s 2Q2012 negative financial results – labour strife and pressure created by the sudden shutdown of its major maintenance provider Aveos – are the areas where the carrier sees prime opportunities in the future as new labour agreements allow for the creation of a new low cost carrier and negotiations with new suppliers ensure a substantial improvement in the costs of airframe maintenance.

Air Canada management during the last year has often cited the transformation that needs to occur at the carrier in order for the airline to compete in the new competitive environment ushered in by LCCs and spiking fuel prices. But in the short term the company still must deal with disgruntled employees and increasing competitive pressure that will not pause as Air Canada works to complete its transformation.

During 2Q2012 Air Canada widened its losses year-over-year by CAD50 million (USD50.2 million) to CAD96 million (USD96.4 million), while net losses for 1H2012 expanded by CAD241 million (USD242 million) to CAD306 million (USD307 million).

Etihad Airways extends reach with TAP codeshares to Portugal

United Arab Emirates national carrier Eithad Airways has signed a codeshare agreement with TAP Portugal, expanding its global reach a little bit further. Etihad will gain a virtual network in Portugal – where competitors Emirates and Qatar Airways do not have flights to – by codesharing on TAP flights from common European points they both serve to Portugal, which Etihad does not fly directly to. TAP will codeshare on Etihad flights from their common European ports to Abu Dhabi. The agreement will largely force Emirates and Qatar, if they want a presence in the small Portuguese market, to either establish direct routes or partners with less geographically and schedule convenient carriers.

Etihad will place its code on TAP-operated flights from Lisbon to Brussels, Düsseldorf, Faro, Frankfurt, Funchal, Geneva, London, Milan and Porto, in addition to flights from Porto to Brussels and Geneva. In return, TAP will place its code on Etihad Airways flights to and from Brussels, Düsseldorf, Frankfurt, Geneva, London, and Milan, with the two carriers effectively establishing mini transfer hubs at those airports.

New Swiss airline SkyWork aims for “metro-capital” airport success

Tiny Switzerland has another airline, this one based in Bern, the nation’s capital and fourth largest city. Given that both Zurich and Geneva, the most populous, are small by global standards, basing an airline in a metro area with only 350,000 inhabitants may be a risky, and previously unsuccessful, endeavour. However, that history has not prevented yet another attempt named SkyWork.

Air Malta troubles worsen as unions flex muscle and LCCs grow

Air Malta’s troubles have become more acute as the struggling carrier’s unions increase their opposition to large-scale redundancies. Prime Minister Lawrence Gonzi has stated the present situation is increasingly worrying, particularly in light of the EUR77 million the government has poured into the airline since Jun-2011.