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Analysis
US airlines and climate change; environment concern mounts - slowly
16-Jul-2019

US airlines and climate change; environment concern mounts - slowly

Airlines worldwide are working to become better environmental stewards through the adoption of a variety of activities, ranging from carbon offsets to reducing cabin waste.

And the biofuel industry has taken off during the past decade, with some airlines investing in biofuel development companies as work continues to bring alternative fuels to the mass market. 

For now, North American airlines appear to be staying apart from the 'Flight Shaming' movement that has swept across Europe. There could be several reasons for those operators steering clear of the agitation, and the most obvious is that there is little prospect of high speed rail ever becoming a reality in North America’s largest aviation market – the US.

But there are some signs that the high speed rail debate could be revived in the country during the not too distant future.

Premium Analysis
Europe-India airlines not yet filling the Jet Airways gap
15-Jul-2019

Europe-India airlines not yet filling the Jet Airways gap

Air France-KLM is expanding in India after the Apr-2019 collapse of its former commercial partner Jet Airways. It plans to increase India seat capacity by more than 25% year-on-year in the coming winter schedule.

KLM will drive more of this growth with the launch of Amsterdam-Bangalore, increased Amsterdam-Mumbai frequency and upgauging Amsterdam-Delhi from 787-10 to 747-400, while Air France will increase Paris-Delhi frequency and deploy larger aircraft on Paris to Bangalore and Mumbai.

Virgin Atlantic will double capacity to India this winter when it adds a daily London Heathrow-Mumbai service (last operated in Jan-2015) to its existing Delhi service on 27-Oct-2019.

However, aside from Air France-KLM and Virgin Atlantic, the leading airlines from Europe to India are doing little to fill the gap left by the demise of the former market leader Jet Airways. Total Europe-India capacity is set to fall by 20% this winter.

Analysis
Airport privatisation: underlying challenge is funding
15-Jul-2019

Airport privatisation: underlying challenge is funding

The International Air Transport Association (IATA) has strong views on the subject of airport privatisation which have been examined previously by CAPA. At the recent IATA Annual General Meeting a significant period of time was given over to examples on a country-by-country basis, and in the main with a negative consideration.

IATA adopts an open view, neither advocating for, nor against, privatisation but its first concern is the interests of its member airlines, as would be expected.

This short report reviews the airlines' position in the context of a recent airport transaction in Japan involving two airlines which may offer a model for wider use.

Analysis
Cincinnati International: Amazon crowns the airport's renaissance
15-Jul-2019

Cincinnati International: Amazon crowns the airport's renaissance

Cincinnati Kentucky International airport faced its share of challenges as consolidation took hold in the US marketplace, but the airport has posted impressive growth during the past couple of years and earned the top spot as OAG’s fastest growing mid-size airport in North America during 2018. 

Although Cincinnati remains a focus city for Delta and the airline is the dominant carrier at the airport, LCCs and ULCCs are fuelling the surge in growth at Cincinnati. The airport earned a key victory when Southwest Airlines launched services in 2017, and the airline's entry has resulted in lower fares to the Chicago metro area. 

Cincinnati also recently marked a milestone when Amazon broke ground on a USD1.5 billion cargo facility on the south side of the airport’s airfield, which will create more jobs at Cincinnati International and ultimately drive economic growth for the region. 

Analysis
Malta aviation: Air Malta, Ryanair and now Malta Air
09-Jul-2019

Malta aviation: Air Malta, Ryanair and now Malta Air

On 11-Jun-2019 Ryanair announced an agreement to buy the start-up airline Malta Air and use it to operate its low cost operations in Malta. Ryanair has already transferred its six Malta-based Boeing 737-800s to its new subsidiary's AOC, although they will not be branded under Malta Air until summer 2020.

The deal was done with the support and cooperation of the Maltese government, which wanted to solidify Ryanair's ties to the country.

This has caused some to question the future of the flag carrier Air Malta, which is owned by the Maltese state. Although the legacy airline reported a profit for the year to Mar-2018, it had struggled with profitability over the past decade, in no small part due to competition from Ryanair. 

The Maltese government has said that there is room for both airlines, operating different business models and networks.

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SkyTeam Focuses On Technology, Stops Recruiting New Members
10-Jul-2019

SkyTeam Focuses On Technology, Stops Recruiting New Members

SkyTeam CEO Kristin Colvile talks about her first year leading SkyTeam, the recent appointment of Korean Air CEO Walter Cho as chairperson, the introduction of an executive board and its focus on technology. The alliance is not currently recruiting new members as its focus “is very much on creating this digital network, seamlessly bringing our members together to create this seamless effortless customer experience”. SkyTeam is losing this year one of its 20 member airlines as China Southern exits. Ms Colvile does not expect any impact from China Southern leaving as its network largely overlaps with China Eastern and SkyTeam also has Xiamen Airlines as a second Chinese member. SkyTeam is watching with interest the new light membership category introduced by oneworld and Star but for now this is not something it plans to pursue.

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Latest News Headlines

421 news items were published to CAPA Members in the past two days. What could you be missing?
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Hainan Airlines Group reported (16-Jul-2019) the following traffic highlights*:

  • Jun-2019:
    • Passengers: 6.9 million, +8.4% year-on-year;
      • Domestic: 6.4 million, +7.5%;
      • International: 485,770, +21.8%;
      • Regional: 29,450, +21.5%;
    • Passenger load factor: 83.7%, -1.1ppts;
      • Domestic: 87.9%, -0.6ppt;
      • International: 73.5%, -1.4ppts;
      • Regional: 74.6%, -3.0ppts;
    • Cargo: 46,260 tonnes, +3.8%
      • Domestic: 36,020 tonnes, +1.5%;
      • International: 10,160 tonnes, +13.3%;
      • Regional: 90 tonnes, -15.2%;
    • Cargo load factor: 31.2%, -12.9ppts;
      • Domestic: 22.2%, -19.8ppts;
      • International: 42.7%, -3.1ppts;
      • Regional: 8.3%, -10.2ppts;
  • Six months ended Jun-2019:
    • Passengers: 42.3 million, +7.7% year-on-year;
      • Domestic: 39.4 million, +6.8%;
      • International: 2.7 million, +21.8%;
      • Regional: 177,400, +22.1%;
    • Passenger load factor: 83.7%, -1.7ppts;
      • Domestic: 88.2%, -0.8ppt;
      • International: 71.0%, -3.1ppts;
      • Regional: 78.3%, +4.3ppts;
    • Cargo: 275,090 tonnes, +5.7%
      • Domestic: 220,180 tonnes, +3.9%;
      • International: 54,250 tonnes, +13.9%;
      • Regional: 660 tonnes, -7.8%;
    • Cargo load factor: 28.9%, -11.6ppts;

*Includes traffic for Hainan Airlines, China Xinhua Airlines, Air Changan, Shanxi Airlines, Lucky Air Company Limited, Fuzhou Airlines, Urumqi Airlines, Tianjin Airlines and Guangxi Beibu Gulf Airlines.

Air China Group reported (15-Jul-2019) the following traffic highlights:

  • Jun-2019:
    • Passengers: 9.2 million, +2.7% year-on-year;
      • Domestic: 7.3 million, +0.7%;
      • International: 1.4 million, +9.5%;
      • Regional: 489,000, +18.5%;
    • Passenger load factor: 80.6%, +0.4ppt;
      • Domestic: 82.1%, +0.1ppt;
      • International: 78.5%, +1.2ppts;
      • Regional: 79.3%, -0.9ppt;
    • Cargo: 115,311 tonnes, -5.3%;
      • Domestic: 75,518 tonnes, -6.1%;
      • International: 35,148 tonnes, -4.3%;
      • Regional: 4644 tonnes, +1.6%;
    • Cargo load factor: 48.2%, -1.9ppts;
      • Domestic: 45.3%, +1.7ppts;
      • International: 50.4%, -3.8ppts;
      • Regional: 32.0%, -6.3ppts;
  • Six months ended Jun-2019:
    • Passengers: 56.5 million, +5.1% year-on-year;
      • Domestic: 45.0 million, +2.7%;
      • International: 8.6 million, +15.0%;
      • Regional: 2.9 million, +17.9%;
    • Passenger load factor: 81.0%, +0.5ppt;
      • Domestic: 82.2%, -0.1ppt;
      • International: 79.1%, +1.5ppts;
      • Regional: 80.9%, +1.3ppts;
    • Cargo: 688,715 tonnes, -1.6%;
      • Domestic: 451,272 tonnes, -3.0%;
      • International: 211,346 tonnes, +1.6%;
      • Regional: 26,097 tonnes, -2.5%;
    • Cargo load factor: 42.2%, -2.4ppts;
      • Domestic: 35.3%, -0.1ppt;
      • International: 47.1%, -4.2ppts;
      • Regional: 29.1%, -5.0ppts. [more - original PR]

China Eastern Airlines Group reported (15-Jul-2019) the following traffic highlights:

  • Jun-2019:
    • Passengers: 10.7 million, +8.4% year-on-year;
      • Domestic: 8.9 million, +8.0%;
      • International: 1.5 million, +10.2%;
      • Regional: 354,530, +9.4%;
    • Passenger load factor: 82.8%, -0.8ppt;
      • Domestic: 83.2%, -1.8ppts;
      • International: 81.9%, +1.0ppt;
      • Regional: 83.3%, -0.4ppt;
    • Cargo: 77,900 tonnes, +9.4%;
      • Domestic: 52,960 tonnes, +7.5%;
      • International: 22,630 tonnes, +15.1%;
      • Regional: 2300 tonnes, +1.1%;
    • Cargo load factor: 33.0%, -0.7ppt;
      • Domestic: 30.6%, -3.3ppts;
      • International: 34.9%, +0.6ppt;
      • Regional: 15.8%, -1.7ppts;
  • Six months ended Jun-2019:
    • Passengers: 64.0 million, +8.6% year-on-year;
      • Domestic: 53.2 million, +8.5%;
      • International: 8.7 million, +8.7%;
      • Regional: 2.1 million, +10.5%;
    • Passenger load factor: 82.7%, +0.2ppt;
      • Domestic: 83.4%, -0.4ppt;
      • International: 81.3%, +1.1ppts;
      • Regional: 82.4%, +0.4ppt;
    • Cargo: 448,010 tonnes, +1.9%;
      • Domestic: 312,510 tonnes, +0.5%;
      • International: 122,950 tonnes, +7.4%;
      • Regional: 12,550 tonnes, -12.2%;
    • Cargo load factor: 29.8%, -2.2ppts;
      • Domestic: 27.7%, -3.3ppts;
      • International: 31.7%, -1.5ppts;
      • Regional: 13.8%, -3.5ppts. [more - original PR]

 China Southern Airlines Group reported (15-Jul-2019) the following traffic highlights:

  • Jun-2019:
    • Passengers: 12.1 million, +9.3% year-on-year;
      • Domestic: 10.3 million, +8.8%;
      • International: 1.6 million, +12.8%;
      • Regional: 226,350, +12.3%;
    • Passenger load factor: 82.9%, +0.5ppt;
      • Domestic: 83.1%, +0.2ppt;
      • International: 82.7%, +0.9ppt;
      • Regional: 76.8%, +2.1ppts;
    • Cargo: 141,920 tonnes, -0.3%;
      • Domestic: 84,280 tonnes, -0.8%;
      • International: 55,810 tonnes, +0.1%;
      • Regional: 1840 tonnes, +10.6%;
    • Cargo load factor: 51.5%, -4.0ppts;
      • Domestic: 33.7%, -1.4ppts;
      • International: 61.0%, -5.5ppts;
      • Regional: 22.0%, -0.2ppt;
  • Six months ended Jun-2019:
    • Passengers: 72.8 million, +8.1% year-on-year;
      • Domestic: 61.6 million, +7.3%;
      • International: 9.8 million, +12.7%;
      • Regional: 1.4 million, +11.4%;
    • Passenger load factor: 82.7%, +0.2ppt;
      • Domestic: 82.6%, -0.1ppt;
      • International: 83.1%, +0.8ppt;
      • Regional: 76.6%, +2.0ppts;
    • Cargo: 822,610 tonnes, -1.3%;
      • Domestic: 489,070 tonnes, -4.0%;
      • International: 322,530 tonnes, +2.9%;
      • Regional: 11,000 tonnes, +8.4%;
    • Cargo load factor: 48.3%, -3.2ppts;
      • Domestic: 29.9%, -3.1ppts;
      • International: 58.9%, -3.1ppts;
      • Regional: 21.5%, -0.9ppt. [more - original PR]

UK's Competition and Markets Authority's (CMA) reported (10-Jul-2019) the following in a response to 'Aviation 2050: The Future of UK Aviation', the Department for Transport's green paper outlining proposals for a new aviation strategy:

  • Developing new capacity at London Heathrow Airport will potentially lead to as many as 350 additional daily slot pairs being made available;
  • The green paper presumes London Heathrow will remain the UK's principal international hub, also reflected in the commission's decision to support Heathrow's third runway;
  • There may be a demand case for additional capacity from 2030, given the complexity and long timescales to deliver airport expansion, the government should consider how airport operators and owners can develop their own investment and development plans for long term growth, to facilitate competition between airports in the medium to long term;
  • There are significant social and environmental impacts associated with airport expansion that the planning framework needs to balance against the commercial desires of the aviation sector and the potential benefits to passengers;
  • If any future national decision is made on whether additional capacity through additional runways should be approved, the government should include an assessment of the impact on competition. [more - original PR]

Airports Council International North America (ACI NA) president and CEO Kevin Burke advocated (12-Jul-2019) for airports to reconsider their approaches to airport security in reaction to the growing use of unmanned aerial systems (UAS). Mr Burke stated: "Airport security is no longer simply limited to the perimeter of the airport; measures must be taken to protect beyond the perimeter for departing and approaching aircraft. As we've seen, recent incursions around airports demonstrate that more needs to be done and at a faster pace than the regulatory process allows". [more - original PR]

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Preparing for a Gathering Storm: A 12-Point Survival Plan Specifically for LCCs

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The US airline strategy dilemma

Issue 49
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    CAPA Aviation Outlook 2019

    Issue 48
    • Things could get muddy in the year of the pig.
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