Brazil's Metallurgic Union scheduled (18-Sep-2019) for Embraer personnel at Sao Jose dos Campos to strike on 23-Sep-2019, seeking a 6.37% increase in wages, corresponding to inflation plus a 3% real wage increase. FIESP, negotiating on behalf of Embraer, proposed inflation plus a 0% real increase. [more - original PR - Portuguese]
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British Airways' service between London Heathrow (LHR) and New York John F Kennedy (JFK) is the world's most lucrative airline revenue route. In the year to Mar-2019, it generated USD1.2 billion – the only route with revenue of more than USD1 billion, according to OAG.
More broadly, the London-New York city pair is the world's largest international route by ASKs and the largest intercontinental route by seats (and second largest of all international routes by seats). LHR-JFK (London Heathrow-New York JFK) is the largest international airport pair by ASKs and the largest intercontinental airport pair by seats.
London-New York is dominated by two antitrust-immune joint ventures.
British Airways/American's share is 48.7% and Virgin Atlantic/Delta's share is 28.4%, according to data from OAG. Norwegian's share has grown to 10.0% from a standing start in 2014. The JVs, particularly Virgin/Delta's, have lost share since Norwegian entered, but this is now stabilising. Moreover, Virgin and Delta plan to upgauge on LHR-JFK and to add a JFK service from London Gatwick (LGW), operated by Virgin, in 2020.
This report presents CAPA's analysis of OAG capacity data on the London-New York market, examining growth and seat share by airport pair, airline, and joint venture.
Vietnam is one of several countries in Southeast Asia where, on the surface at least, it appears as if the government is keen to attract both domestic and foreign investors to its airports portfolio. That appearance might be a little misleading, though.
Aéroports de Paris, which then became Groupe ADP in 2017, looked to tie up a deal with ACV whereby Groupe ADP would acquire a 7.4% equity stake (later 20%) in ACV and make long term investments there. The government approved the deal but it was then stalled by both ACV and Groupe ADP owing to multiple disagreements.
The Vietnamese government currently owns 95.39% of Airports Corporation of Vietnam (ACV), with the remaining 4.61% held by both local and foreign investors. Now, while Ministers are saying that they still welcome investment, the government is proposing to buy back the few shares in ACV not owned by the state, thus effectively nationalising it.
Total airline seat capacity in Iceland this year is set to plummet by more than a quarter versus 2018. This marks a sharp reversal of the strong double digit growth catalysed by the LCC WOW air in the six previous years, when the market leader Icelandair Group and foreign airlines also pursued rapid growth.
WOW air's exit in late Mar-2019 has not only removed the biggest contributor to capacity growth, but has also prompted most of the remaining airlines in Iceland to ease back on the throttle. Excluding WOW air, the collective capacity of Icelandair Group and other airlines will be flat this year.
There is some variation within this. The LCC Wizz Air and the Nordic airlines Norwegian, SAS and Finnair are growing rapidly in Iceland, but Icelandair Group's growth is modest overall and operators such as easyJet and British Airways are cutting capacity.
In other aviation markets the gap left by the collapse of a major player is often fairly rapidly closed by other airlines. This is not yet happening in Iceland – evidence that demand had been artificially inflated by unsustainably low prices during the WOW air years.
The head of Russia's competition authority, the Federal Antimonopoly Service (FAS), has called for more competition in the country's low cost airline segment. He has even suggested that Aeroflot launch another LCC to compete with its low cost subsidiary Pobeda.
Pobeda is the country's only LCC, with 7.2 million passengers in 2018 giving it a 5.2% traffic share. It has 100% of domestic LCC capacity and approximately 40% of international LCC capacity to/from Russia, against fragmented foreign low cost competition.
Pobeda has grown rapidly since its Dec-2014 launch and the relative underpenetration of air travel in Russia suggests that it will be able to continue to channel latent demand through its low fares.
However, Pobeda's load factor has peaked, and it slipped to an underlying operating loss in 1H2019.
More low cost competition would help to accelerate the growth in air travel's penetration levels in Russia and might even focus Pobeda on an even more efficient cost structure. Aeroflot's preference would be for others to launch competitor airlines.
Premium Analysis
Haneda's new slot awards - what routes to gain access?The latest tranche of international slot allocations at Tokyo’s Haneda Airport will open up new route opportunities for Japan’s two major carriers, and will also likely mean a further shift of international service from Tokyo Narita Airport.
Japanese regulators have allocated the new Haneda slots to certain international markets, but the key decisions about specific routes are yet to be revealed by Japan’s airlines.
Haneda slots are highly coveted due to the airport’s capacity constraints, and its proximity to one of the world’s most valuable passenger markets in the Tokyo metropolitan area. All Nippon Airways (ANA) and Japan Airlines (JAL) use a dual-hub system in Tokyo, although Haneda is more desirable as it is much closer to central Tokyo than Narita.
Recorded at CAPA Australia Pacific Aviation & Corporate Travel Summit, 08-Aug-2019
The Great Debate: Airport Regulation, Friend Or Foe?
Airport regulation is important. Airports are vertically integrated businesses. Landside – do give airports give enough space on site for rideshares, car parking, are ride-shares being overcharged? Airside – aircharges are rising – is that a sign of market pricing?Fuel lines – is there competition in the supply of jetbill?
Moderator: CAPA – Centre for Aviation, Chairman Emeritus, Peter Harbison
- ACCC, General Manager – Infrastructure Regulation Division, Matthew Schroder
- AIPA, President, Mark Sedgwick
- Airlines for Australia and New Zealand, Chairman, Graeme Samuel AC
- Frontier Economics, Economist, Anna Wilson
- Qantas, Group Executive Government, Industry, International and Sustainability, Andrew Parker
- Regional Express, Deputy Chairman, John Sharp
CAPA Low Cost Long Haul Global SummitMore
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CAPA’s NZ Aviation Summit explores key issues & opportunities facing the industry in this region. A separate Corporate Travel Summit is being held at this time for buyers and suppliers on how these issues & opportunities impact their travel programmes.
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20-Sep-2019 3:22 PM
SESAR launches AUDIO project for increasing taxiing aircraft's situational awareness
SESAR launched (19-Sep-2019) the airspace user supporting demonstration of integrated airport operations (AUDIO) project. The demonstration project, funded by the EU, aims to improve safety, efficiency and predictability of flights by increasing flight crew situational awareness while the aircraft is taxiing. The project is being conducted at Hamburg Airport Helmut Schmidt's German Aerospace Center. AUDIO project coordinator Steffen Loth explains: "Pre-operational trials have shown safety and efficiency benefits of these new solutions. For an integrated approach to a modernised air transport, we need to go beyond these ground based solutions, involve airlines as central partners and share available information between all stakeholders". [more - original PR]
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20-Sep-2019 12:47 PM
IATA: Saudi Arabian attack expected to put oil prices under pressure for some time
IATA reported (19-Sep-2019) that while the loss of oil production due to the attack on Saudi Arabia's refining capabilities could be partly compensated from storage facilities, oil prices are expected to remain under pressure as it is likely to take some time for production to return to normal. The impact of the rise in oil prices on airlines will depend on hedging ratios, but each USD5 per barrel increase in the price of jet fuel could reduce overall industry net profit margins by around 0.5% points. Oil prices were stable in Aug-2019, but jumped up in Sep-2019 following the attack. According to IATA, Brent crude oil was USD68 per barrel and jet fuel reached USD85 per barrel, 11% higher compared to the end of Aug-2019. [more - original PR]
India's Directorate General Civil Aviation (DGCA) reported (19-Sep-2019) the following domestic traffic highlights for Aug-2019:
- Passengers: 11.8 million, +3.9% year-on-year;
- Passenger load factor:
- SpiceJet: 92.4%;
- AirAsia India: 87.8%;
- GoAir: 87.5%;
- IndiGo: 84.3%;
- Vistara: 81.8%;
- Air India: 80.9%;
- TruJet: 78.0%;
- Star Air India: 53.1%. [more - original PR]
LATAM Airlines Group announced (19-Sep-2019) plans to invest USD400 million in a two year cabin retrofit programme, covering 22 widebody and 150 narrowbody aircraft. The carrier has already incorporated eight refitted aircraft. [more - original PR]
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Find Out MoreLabour unions in aviation: a force for good - or not?
Issue 50
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