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Argentina turmoil: Norwegian cedes LCC operations to JetSMART
13-Dec-2019

Argentina turmoil: Norwegian cedes LCC operations to JetSMART

A little more than year after launching domestic operations in Argentina, Norwegian Air Argentina is exiting the market and selling a 100% stake to JetSMART Argentina.

Norwegian is trying to achieve sustained financial health, and a three aircraft operation halfway around the world seems like a logical cord to cut. Argentina’s economy is faltering, and the administration that instituted reforms for the establishment of LCCs in the country was voted out of office in Oct-2019. 

If the incoming government preserves the reforms that paved the way for low cost operators to enter the market, two ultra low cost airlines will remain in Argentina – Flybondi and JetSMART Argentina. Perhaps a more rational number of low cost operators for the country. 

For now, all airlines in Argentina are battling currency headwinds and general unease as the country’s economy continues to suffer. Even as inflation climbed to more than 50%, Argentina’s domestic passenger growth remained solid, but in Oct-2019 it slowed to flat growth year-on-year after double digit market increases for most of this year. 

Analysis
Hong Kong traffic decline hurts airlines and airport
12-Dec-2019

Hong Kong traffic decline hurts airlines and airport

Hong Kong travel demand has experienced a seismic shock from the civil unrest that has swept the special administrative area. This has had major ramifications for airlines, particularly Hong Kong-based Cathay Pacific and Hong Kong Airlines. Both have experienced a plummet in demand, prompting major capacity cuts that have been extended into 2020.

It is not yet clear what the full financial impact will be for the airlines.

For the Cathay group airlines and Hong Kong Airlines the loss of traffic and revenue hit when they were already in fragile financial condition – particularly so, Hong Kong Airlines – and broader economic concerns are also growing for Asia’s airline industry.

Analysis
Iberia’s purchase of Air Europa and the impact on the ‘Madrid hub’
11-Dec-2019

Iberia’s purchase of Air Europa and the impact on the ‘Madrid hub’

Several primary hub airports in Europe would like to be recognised as the most significant one connecting that continent with Latin America; Paris Charles de Gaulle and Frankfurt numbered amongst them, and Lisbon. But it has been Madrid that has usually ruled the roost.

Spain’s economic recession and its impact on Iberia threatened that position several years ago when the airline cut many of its westbound long haul routes, opening a window of opportunity for competitors.

The recently announced purchase agreement between Iberia (part of IAG) and Air Europa (Globalia), which is scheduled for completion in 2H2020, theoretically alters the balance again in favour of Madrid, but it is not clear yet how the combined airline will accommodate that Latin American region as the larger Iberia seeks to become a '360° hub'.

Analysis
Major US airlines are playing the long game with their Asia strategies
09-Dec-2019

Major US airlines are playing the long game with their Asia strategies

US Airlines generally adopt a long term view in their trans Pacific strategies, often enduring short term pain for what they believe will be higher returns in the mid to long term.

The North America-Asia market is tough. It was plagued by overcapacity and low yields even before the US-China trade spat and political unrest in Hong Kong.

US airlines have long complained that securing favourable slot times at China’s airports is a challenge, and American cut its service from Chicago to China last year, being eventually forced to return slots covering those flights that its rivals are looking to use. 

There is no clarity on whether the trans Pacific fortunes of American, United and Delta will get worse before they get better, and there is no lack of scrambling by some of those airlines to gain coveted slots to ensure that they will be a competitive force in the trans Pacific for years to come. 

Analysis
CAPA's World Aviation Outlook Summit heads to London Stansted in 2020
06-Dec-2019

CAPA's World Aviation Outlook Summit heads to London Stansted in 2020

CAPA – Centre for Aviation (CAPA), the world’s most trusted source of market intelligence for the aviation and travel industry, announced London Stansted Airport as the host of the CAPA World Aviation Outlook Summit in 2020 during this year’s Summit proceedings in Malta.

To be held on 2/3-Dec-2020, the Summit will welcome over 200 aviation executives to analyse the industry’s performance over the year, discuss the current state of play and forecast the outlook of the aviation market. Covering all regions - Europe, Asia, Middle East, Americas and beyond - expert speakers will guide the debate as they address the commercial and operational pillars that will essentially drive strategic decision-making in 2021.

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NDC Workshop – Looking Forward, A Guide For Experts
Recorded at CTC-CAPA Corporate Travel Gathering - Australia, 25-26 Nov 2019

NDC Workshop – Looking Forward, A Guide For Experts

Consider yourself an NDC Expert? The NDC topic has been one that has dominated discussions all around the world. Key parts of the corporate travel industry are now ready to look forward and delve further into the real impact of this important capability.

  • What will NDC look like in five years?
  • Is this complex commercial and technological distribution landscape sustainable?
  • How are business models evolving in response?

Session Provocateur: ATPI, Commercial Head for Global Corporate Business, Julian Mills

Moderator: ATPI, Commercial Head for Global Corporate Business, Julian Mills

  • CTM, Global Head of Partnerships, Scott Ward
  • Qantas, Global Manager – Distribution Strategy & Channel Development, Anthony Collins
  • Serko, Chief Strategy Officer, Bob Shaw
  • University of Sydney, Travel and Expense Manager, Penny Meakes

Latest Events

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CAPA Qatar Aviation Aeropolitical and Regulatory Summit

Upcoming Event

5-6
Feb
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Doha: CAPA Qatar Aviation Aeropolitical and Regulatory Summit

The Qatar Aviation Aeropolitical and Regulatory Summit is a high level forum dedicated to addressing the latest development in aviation regulation, both within the Gulf Cooperation Council countries and globally.

CAPA Middle East & Africa Aviation Summit

Upcoming Event

2-3
Mar
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Amman: CAPA Middle East & Africa Aviation Summit

The CAPA Middle East & Africa Aviation Summit, to be held on 2-3 March 2020, will examine commercial and operational issues affecting airlines and airports in Africa and the Middle East, focusing on both domestic and international markets.

Latest News Headlines

286 news items were published to CAPA Members in the past two days. What could you be missing?
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UNWTO reported (11-Dec-2019) mixed results among the largest spending tourism source markets over the first nine months of 2019:

  • US (+6% year-on-year) led growth in international tourism expenditure in absolute terms, supported by a strong USD;
  • China, the world's top source market, saw outbound trips increase by 14% in 1H2019, though expenditure fell 4% compared to 9M2018;
  • India and some European markets also performed strongly, though global growth was more uneven than in 2018;
  • France (+10%) reported the strongest increase among the world's top ten outbound markets, reflecting surging demand for international travel for the second consecutive year. Spain (+10%), Italy (+9%) and the Netherlands (+7%) also posted robust growth, followed by the UK (+3%) and Russia (+2%);
  • Some large emerging markets such as Brazil, Saudi Arabia and Argentina reported declines in tourism spending this period, reflecting recent and ongoing economic uncertainty. [more - original PR]

Far Eastern Air Transport (FAT), via its official website, announced (12-Dec-2019) it will suspend all operations from 13-Dec-2019, citing "long term operating loss and difficult financing situation". The carrier's sudden cessation is expected to affect 3400 passengers (CNA, 12-Dec-2019). The airline also faces legal action from the government because it did not notify authorities 60 days prior of any redundancy plans. This is the second time FAT has suspended operations after its operating permit was suspended in 2008 by the Taiwan Civil Aeronautics Administration in 2008 due to bankruptcy proceedings.

​IATA DG and CEO Alexandre de Juniac said (11-Dec-2019) it is important that the ICAO Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is "successful and not compromised by a patchwork of competing taxes and charges". Mr de Juniac also said there is a need to get governments to focus on driving the technology and policy solutions that will make flying sustainable, concentrating on sustainable aviation fuels in the immediate term. He added that people are adjusting their personal habits to manage their individual carbon footprints and it is "our duty as an industry to ensure that they have the facts needed to make the right choices on air travel". [more - original PR]

CAAC reported the following for Chinese airlines (Carnoc.com, 12-Dec-2019):

  • Nov-2019:
    • Passengers: 53.1 million, +6.0% year-on-year;
      • Domestic: 47.2 million, +4.7%;
      • International: 5.9 million, +17.3%;
    • Passenger load factor: 81.5%;
    • Cargo: 700,000 tonnes, +5.7%;
      • Domestic: 476,000 tonnes, +7.3%;
      • International: 223,000 tonnes, +2.3%;
    • Aircraft utilisation: 9.2 hours per day, stable;
  • 11 months ended Nov-2019:
    • Passengers: 610 million, +8.1%;
    • Cargo: 6.8 million tonnes, +1.5%.

CAAC announced (10-Dec-2019) the 2020 subsidy scheme for small and medium airports, totalling CNY1560 million (USD222.2 million) to 174 airports, including 163 civil aviation airports and 11 general airports. CAAC allocated CNY1518 million (USD216.2 million) subsidy to 168 airports in 2019. The following airports will receive the highest subsidy in 2020:

GRU Airport Sao Paulo Guarulhos International Airport reported (12-Dec-2019) the following traffic highlights for Nov-2019:

  • Passengers: 3.6 million, +0.8% year-on-year;
    • Domestic: 2.5 million, +4.6%;
    • International: 1.1 million, -6.8%;
  • Aircraft movements: 24,261, +5.3%;

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

IATA AGM CAPA Daily - Monday 3-Jun-2019

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Aviation carbon emissions and climate change

Issue 51
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