Sydney Kingsford Smith Airport

Sydney Airport sticks with plans for dual use terminals to handle forecast doubling in demand

Sydney Airport’s redevelopment plans remain largely unchanged in its revised draft master plan issued on 05-Aug-2012 looking out to 2033. By then total passenger numbers are forecast to have doubled to more than 74 million per year. The airport has also retained plans to establish two separate international and domestic terminal precincts located on opposite sides of the main runway by 2019.

The existing T2 and T3 domestic terminals on the eastern side of the airport will be redeveloped and expanded to also cater for international services including the addition of more A380-capable gates. The T1 international terminal on the western side of the main runway will also be extended to create about four more gates. Both precincts will be equipped with swing gates able to serve domestic and international traffic from the same gate at different times.

Garuda Indonesia's attempt to compete in Australia-Europe market faces challenges

Garuda Indonesia plans to start competing on the Kangaroo route in Nov-2013, when it launches services to London Gatwick. The carrier is expected to start offering services between Australia and other European destinations in 2014, when it aims to launch new non-stop routes from Jakarta to continental Europe.

The Indonesian carrier is expanding in the Australian market ahead of launching services to London, adding capacity to its three existing Australian destinations – Sydney, Melbourne and Perth. Garuda is also launching services to Brisbane in Aug-2013 and aims to launch services within the next several months to Auckland, which opens up the possibility of connections between New Zealand and Europe.

This is the second of a two-part series of reports on Garuda Indonesia’s international expansion plans. The first part analysed the carrier’s overall position in Indonesia’s international market and the 10 international routes it plans to add in 2013. This part looks at the carrier’s entry on the highly competitive Kangaroo route between Australia and Europe.

Garuda Indonesia accelerates international expansion with 10 new routes to be launched in 2013

Garuda is accelerating expansion in Indonesia’s under-served international market as part of an initiative to build its international profile ahead of entry into the SkyTeam alliance. The international expansion will see Garuda launch at least 10 new routes in 2013, including Jakarta-London.

London Gatwick will become in Nov-2013 its second European destination after Amsterdam. Garuda will also launch in 2013 several new short-haul international routes within Southeast Asia and three new medium-haul routes to Australia and Japan.

The long-haul expansion is made possible by the delivery of Garuda’s first batch of 777-300ERs. The 777-300ER will be Garuda’s new flagship and the only aircraft in its fleet featuring a three-class cabin – with economy, business and first class sections. Garuda also continues to expand its A330 fleet, which it uses primarily within Asia-Pacific.

The A380 becomes mainstream, with 103 now in service: which airlines, destinations, stage lengths?

There are 103 A380s in service as of early May-2013. Emirates has 33 and Singapore Airlines has 19, so when assessing network scheduling, these two and their hubs predominate: of the 1,048 weekly A380 flights, 402 are from Emirates alone. Dubai and Singapore airport see the most A380 flights.

But there are some less predictable statistics. The airport to see the most A380 operators is Hong Kong followed by Paris and Los Angeles. The largest A380 destination that is not (yet) an A380-hub is London Heathrow. The UK and USA are the most common A380 destinations after Australia, Singapore and the UAE. Asia, not the Middle East, sees the most A380 flights; South America sees none. Guangzhou-Shanghai Pudong is the shortest A380 route at 1,202km while Los Angeles-Melbourne is the longest at 12,751km. Qantas and Lufthansa have the highest average sector length while Thai Airways is placing the most number of cycles – about two – on its aircraft per day. Qantas and Air France are placing the least (just over one).

China Southern Airlines A380 to Sydney - Part 2: competitors to feel more pricing pressure

This is the second part of a report on China Southern's A380 deployment to Sydney, a move that will gain public interest from the angle of a previously obscure carrier bringing in the world's largest aircraft to one of the world's most iconic cities. While the capacity increase is large at 41%, the 1,554 additional weekly seats have been put in by or been exceeded by other carriers serving Sydney in recent times.

What makes China Southern's A380 deployment to Sydney notable – and worrisome – is not the sheer number of seats but the low yields they will be priced at. China Southern is offering return economy tickets from Australia to Europe during the European summer – before the A380's entry and capacity increase – for as low as AUD1,102 (USD1,143), half the price of typical fares only two years ago. Business class fares have seen similar percentage cuts over the last two years, with return business class to Europe for AUD5,819 (USD6,034).

Yield pressure for China Southern Airlines as it deploys A380 to Sydney

While China Southern's announcement to serve Sydney from Oct-2013 with the A380 may be good for Australia at large, for China Southern there are limited upsides besides strategic ambition and slowly ending its negative perception from not being able to use the A380 in international markets.

The carrier will replace one A330 Sydney service with the A380, generating a 41% increase in capacity, which will likely make the service loss-making for some time. Sharper increases will occur in the premium cabins, where daily business class seats will rise from 48 to 100 and first class from four to eight.

The increase in capacity will occur in an already over-saturated Australia/NZ-Asia market, which is seeing increased capacity from AirAsia X, Air New Zealand, Emirates, Qantas, Scoot and Singapore Airlines.