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Analysis Reports
We employ a global team of highly-experienced analysts who deliver a wealth of commentary about the aviation and travel industry. Our analysts don’t just report the news, they look at the big picture to help you understand how the latest news, issues and trends will affect your business. CAPA’s commitment to independence and integrity means every report is filled with accurate data and actionable insights to help you stay ahead of the game.
Strong international demand gives South Korean airlines a good platform for next phase of growth
South Korea's international passenger traffic has almost recovered to pre-pandemic levels and exceeds them in some key markets, while there are also promising signs in sectors that have been lagging.
The rate of the country's capacity growth slowed in the first half of this year, as most aircraft were returned to service and the majority of routes resumed. Unsurprisingly, the main markets that have yet to fully recover are between South Korea and China and Japan.
As with many other Asia-Pacific airlines, South Korean airlines are seeing increasing competition and rising costs. This spurred a more cautious approach to growth, which has helped boost international load factors to higher levels.
Weakness in Japan and China demand has been partially offset by surging demand on flights to places such as the US and Western Europe.
Looking ahead, there appears to be growing confidence in the China market. Korean Air has revealed plans to resume more routes in its China network, significantly lifting its capacity there.
This indicates that demand is rising enough to warrant more services. It is also adding more Japanese flights, although to a lesser extent than in China.
Meanwhile, some of South Korea's secondary airlines are also eyeing growth prospects, boosted by the likelihood of gaining valuable routes given up by Korean Air in order to win approval for its Asiana takeover.
Abra's latest partnership with Volotea is a refreshing take on creating a competitive global network
After GOL and Avianca unveiled plans to establish Abra a couple of years ago, it appeared that Abra was attempting to build a powerful South American airline group.
And while that likely remains a major goal for the airline, recent moves by Abra indicate the company is working to create a more globally focused airline group to further enhance its network reach - evidenced by Abra and Volotea now working to establish a joint venture.
It shows a certain nimbleness by each company, and in the case of Abra, reflects its approach to thinking outside the norms of traditional airline tie-ups.
Air passenger traffic in Latin America and the Caribbean grew by 7.4% in Apr-2024, totalling 38.8 million travellers, which was an increase of 2.7 million compared to Apr-2023, according to data from the region's aviation body ALTA.
Notably, in the international market there was a 10% growth, with 18.3 million passengers total.
Mexico, Brazil, Colombia, the Dominican Republic, and Panama were the five busiest countries by international passenger numbers. The extra-regional international segment grew by 8.3%, reaching almost 14 million passengers, and that was 1.06 million more than in Apr-2023.
The Caribbean accounts for just a small share of this total, but is a region where air connectivity plays a vital economic and social role.
Data from CAPA - Centre for Aviation and OAG shows that annual Caribbean seat capacity rose 17.4% in 2023, to a figure slightly below its pre-COVID level of 2019. In 2024 regional capacity has tracked ahead of both 2019 and 2023 levels every week.
But while the landscape is looking much healthier, airlines in the region still face a volatile mix of small island populations, high taxation, and both economic and political issues.
CAPA - Centre for Aviation asked interCaribbean, CEO, Trevor Sadler to share his views on regional connectivity in the Caribbean.
Europe aviation capacity outlook: above 2019 levels again in 3Q2024, but air fares weaken
Capacity projections based on airline schedules show that seat numbers to/from/within Europe are set to be 102.1% of 2019 levels in 3Q2024 (source: CAPA - Centre for Aviation/OAG). This will be the second successive quarter above 2019 levels, after capacity reached 101.3% in 1Q2024.
Intercontinental markets to/from Europe are set to reach 103.0% (down from 103.9% in 2Q), with intra-Europe at 101.8% (up from 100.5% in 2Q).
Low cost airlines have again grown their seat share within Europe, further evidence of their stronger recovery from the COVID-19 pandemic.
EU and UK fares remain well above 2019 levels, but the most recent air fare inflation figures - for May-2024 - were negative for both. With supply chain-related constraints sill pinching capacity, this raises concerns for the ongoing strength of demand for air travel in Europe.
Both JetBlue Airways and Frontier Airlines have recently upped their rhetoric about their respective dominance in Puerto Rico or the territory's largest airport San Juan Luis Muñoz Marín International Airport.
It's an interesting time for competition to heighten between those two airlines in Puerto Rico. Each airline is attempting to find its footing after facing criticism over how they've navigated their businesses during the last couple of years.
Frontier believes San Juan can serve as a gateway to stimulate traffic within the Caribbean, while JetBlue continues to tout its legacy in San Juan and Puerto Rico.
Now the question is whether the airlines can coexist or engage in skirmishes to ensure their respective stances in the market.
Qantas has taken a major step forward on its Project Sunrise ultra-long haul initiative, after European regulators approved a key aircraft modification that had caused a delay to the programme.
Airbus gained clearance for the design of an extra fuel tank that is crucial for the A350-1000s to fulfil the mission envisaged by Qantas.
While some certifications are still required, the fuel tank loomed as one of the major remaining technical tasks for the proposed modifications on the A350-1000s.
The European Union Aviation Safety Agency (EASA) wanted revisions to the tank design, which was enough to affect the certification timetable and prompt Qantas to push back its launch target.
Meanwhile, Qantas is still convinced about the business case for Project Sunrise, despite the changed business environment and programme delays.
Executives from the airline discussed the outlook for Project Sunrise and more immediate international plans during a briefing at the IATA annual general meeting in Dubai on 4-Jun-2024.
Iberia has announced that its seat count to Latin America in 2024 will be up by 16% on 2023 (its highest ever capacity in that market) and up by 20% on 2019.
According to data from CAPA - Centre for Aviation and OAG, the Spanish flag carrier will offer 5.3 million seats to Latin America this year, compared with 4.6 million in 2023 and 4.5 million in 2019.
Iberia is the leading airline on Spain-Latin America routes, with 39% of seats in the week of 17-Jun-2024, while Air Europa is second with 21%.
If the acquisition of Air Europa by Iberia's parent IAG is approved, Iberia could control 60% of this market (subject to any regulatory remedies).
Regardless of the Air Europa deal, Iberia's growth this year demonstrates its belief that value-creating returns are once more available in post-pandemic Latin America.
SriLankan Airlines will be better placed to make major long term investments in its fleet after its privatisation is completed, but in the short term the airline is looking to grow with more leased aircraft.
The airline has had more market turbulence than most in recent years. It suffered from a loss of tourist traffic due to terrorist attacks in Sri Lanka in Apr-2019, and before it recovered from that, the COVID-19 pandemic emerged to decimate demand further.
Other challenges include the rapid growth of Indian LCCs in its neighbouring market, and competition from Gulf airlines.
The SriLankan government has been attempting to divest the financially troubled airline for some time, and finally appears to be making progress towards this goal.
Although SriLankan has limited options while the privatisation process is under way, it is doing what it can to increase capacity. It is also having to contend with engine availability issues that have caused many of its narrowbodies to be grounded.
When Virgin Atlantic Airways launched operations on 22-Jun-1984 with a flight from London Gatwick to New York Newark, its founder Sir Richard Branson may not have envisaged his creation lasting for 40 years. The challenger brand survived fierce competition with British Airways when it moved into London Heathrow in 1991, and all the shocks and beatings that the aviation cycle can propel.
Today its equity relationship with Delta Air Lines, joint venture with Delta and Air France-KLM, and its membership of SkyTeam have softened its disruptor credentials. These factors have also been crucial to its survival.
Yet the Virgin brand - and its values of fun, individuality and customer experience - remains integral to its image.
After four decades, nobody can doubt Virgin Atlantic's resilience and adaptability, in spite of chronic struggles with profitability and lack of growth.
To mark Virgin Atlantic's 40th birthday, this report considers Virgin Atlantic's strengths, weaknesses, opportunities and threats.
Calgary Airport Authority’s West Runway rehabilitation project to deliver widespread benefits to YYC
The Calgary Airport Authority (The Authority) is paving the way for a better, more sustainable future through a major capital project at YYC Calgary International Airport that will set a benchmark for future airport developments across Canada while delivering significant benefits to YYC and southern Alberta.
The West Runway Rehabilitation (WRR) project will be one of the first airport projects in the country to seek certification under the Envision® framework, which assesses the sustainability of infrastructure projects across a wide range of criteria.
The Authority commenced Phase 1 construction of the two-year, CAD201-million capital project in Apr-2024. The project scope comprises removal and replacement of the West Runway, including full-depth structural and electrical rehabilitation and modernisation of approaches, lighting and infrastructure.
In support of the project, the Government of Canada is providing CAD57.5 million through the federal Airport Critical Infrastructure Program, with the remaining CAD143.5 million being fully funded by The Authority.
Following is a brief overview of this critical infrastructure project.