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Eastern/Central Europe airports: long haul connectivity opportunities
18-Oct-2018

Eastern/Central Europe airports: long haul connectivity opportunities

By comparison with Western Europe, Eastern/Central Europe has very few airports with long haul connections. According to data from OAG Schedules Analyser for the week of 8-Oct-2019, there are 62 airports in Western Europe with direct flights to long haul destinations and only 16 in Eastern/Central Europe.

Moreover, while Western Europe has 25 airports with 10 or more long haul routes (and six with more than 50), in Eastern/Central Europe only the two leading Moscow airports have a double digit number of long haul routes.

Moscow Sheremetyevo has the greatest number of short haul to long haul connections in C/E Europe, mainly operated by Aeroflot. Outside Russia/CIS, Warsaw has the greatest number of short haul to long haul connections, with LOT Polish its leading operator. At Prague and Budapest, short haul to long haul connectivity is mainly provided by airlines from elsewhere.

Premium Analysis
American Airlines SWOT: high leverage overshadows its strengths
17-Oct-2018

American Airlines SWOT: high leverage overshadows its strengths

American Airlines is in the final stages of its merger with US Airways, after reaching major milestones that included merging more than 1,300 IT systems, moving its pilots and aircraft onto a single operating platform, and completing the rebanking of strategic hubs in Miami, Dallas and Chicago.

The airline enjoys the benefit of operating the youngest fleet among its large US global network peers, and has risen to take the title of the largest US domestic airline, just passing Southwest in US market share.

But despite those achievements and positioning, American’s financial leverage is significantly higher than its peers, and the company faces short term revenue pressure that could affect the lofty financial targets that it has set for itself.

This report examines American’s strengths, weaknesses, opportunities and threats.

Analysis
Thailand-China LCC expansion drives enormous growth
17-Oct-2018

Thailand-China LCC expansion drives enormous growth

Thailand-China has emerged as one the largest and fastest growing air travel markets in the world. There are currently close to 1,300 weekly flights from Thailand to China, generating 250,000 one-way seats. Seven years ago there were 200 weekly flights, generating only 40,000 one-way seats.

Thailand has become the most popular destination for Chinese travellers outside Greater China. Chinese visitor numbers to Thailand are on pace to exceed 11 million in 2018, compared to less than two million in 2011. 

Airlines of all types from both countries have benefitted from the rapid growth in Thailand-China travel. However, LCCs in particular have grown rapidly. The LCC penetration rate in the Thailand-China market has grown over the past seven years from only 7% to 44%, and is poised to increase further as all of Thailand’s LCCs are now banking heavily on China as they expand.

Analysis
Urumqi Airport: fast growing Central Asian hub, but no BRI benefit yet
16-Oct-2018

Urumqi Airport: fast growing Central Asian hub, but no BRI benefit yet

Urumqi has emerged as one of China’s fastest growing airports. Passenger traffic has nearly quadrupled over the past decade, from only 5.8 million in 2018 to 21.5 million in 2017. Traffic increased by 6% in 2017 and was up another 9% in the first seven months of 2018.

However, Urumqi is still relatively underserved from an international perspective, despite its strategic location on the Silk Road and only 300km from Kazakhstan. Urumqi is closer to Central Asia than eastern China and is within narrowbody range of several markets benefitting from China’s 'Belt and Road Initiative' (BRI). Urumqi also has a large Central Asian ethnic population and has become a hub for international companies seeking to increase their presence in Central Asia or the Silk Road Economic Belt. 

China Southern has operated a hub at Urumqi for several years and currently links Urumqi with 15 international destinations – all of which are along the Silk Road. However, the China Southern hub consists predominantly of domestic services and 96% of Urumqi’s total seat capacity is in the domestic market. International traffic has declined over the past three years, whereas domestic traffic has grown rapidly.

Analysis
Vietnam-India market's rapid growth. VietJet first with nonstops
16-Oct-2018

Vietnam-India market's rapid growth. VietJet first with nonstops

VietJet Air is poised to become the first airline to operate scheduled nonstop flights connecting Vietnam and India. The Vietnamese LCC plans to operate four weekly services initially, from Ho Chi Minh to Delhi, but over the next several years could add several routes to India. 

The Vietnam-India market is relatively small but has been growing rapidly. From a small base, traffic has nearly tripled over the past five years and was up 30% in 2017, driven by a 30% increase in Indian visitor numbers to Vietnam.

Vietnam and India are among the 10 most populated countries in Asia and are only four to six hours apart by air. Vietnam is also an increasingly popular tourist destination and India is one of the fastest growing outbound markets. While there is now sufficient demand to support direct services, VietJet will have to overcome stiff competition from sixth freedom competitors, which have the advantage of offering multiple Vietnam-India city pairs.

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Amadeus Update – Digitalisation, Enabling Technology Advancements And Staying Relevant In A Changing Landscape
Recorded at CAPA Low Cost Long Haul Global Summit, 4-5 Oct 2018

Amadeus Update – Digitalisation, Enabling Technology Advancements And Staying Relevant In A Changing Landscape

David Doctor, VP strategy & marketing, airlines, Amadeus, highlights how the travel technology specialist is already active within the Low Cost Long Haul space and working to help airlines on their digitalisation journey to stay relevant in both today’s and tomorrow’s emerging marketplace.

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CAPA Asia Aviation Summit

Upcoming Event

8-9
Nov
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Singapore: CAPA Asia Aviation Summit

The summit will bring together up to 30 CEOs of leading carriers based in Asia, as well as those serving the world’s most vibrant aviation region. It will also have a dedicated day on corporate travel focusing on the biggest corporate travel spend: air

CAPA Asia Corporate Travel Summit

Upcoming Event

8
Nov
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Singapore: CAPA Asia Corporate Travel Summit

The summit will bring together up to 30 CEOs of leading carriers based in Asia, as well as those serving the world’s most vibrant aviation region. It will also have a dedicated day on corporate travel focusing on the biggest corporate travel spend: air

Latest News Headlines

790 news items were published to CAPA Members in the past two days. What could you be missing?
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Ryanair announced (17-Oct-2018) its summer 2019 timetable from Germany:

Leipzig/Halle Airport announced (17-Oct-2018) plans to launch a EUR210 million expansion of DHL Express' apron 4 freight hub. The expansion is in response to "ever increasing traffic volumes" driven in particular by e-commerce, with freight volumes increasing from 150,000 daily parcels in 2010 to 350,000 in 2018. The scope of the project covers an area of 67 hectares, including:

  • Expansion of aircraft parking capacity by up to 36 new stands;
  • Creation of two taxiway connections to the south runway;
  • Construction of two new taxiways serving the northeastern and southwestern areas of the south runway;
  • Construction of an empty container terminal;
  • Secured parking areas dedicated to truck parking;
  • Construction of an MRO hangar for small aircraft.

The apron extension is "essential for the longterm continued operation" of the DHL Leipzig freight hub, and will support the cargo carrier's plans to integrate A330F into its fleet, the airport noted. Leipzig/Halle Airport will submit documentation to the Land Directorate of Saxony in early 2019. [more - original PR - German]

India's Ministry of Civil Aviation (MoCA), via its official Twitter account, confirmed (17-Oct-2018) "Government plans to bring in Cape Town Convention Act for aviation sector". As previously reported by CAPA, MoCA plans to introduce the 2018 Cape Town Convention Bill to facilitate the implementation of the aircraft equipment protocol of the 2001 Cape Town Convention on International Interests in Mobile Equipment. MoCA stated: "This act will enable cheaper and easier financing of aircraft".

Aeromexico CEO Andres Conesa, speaking on Aeromexico's 3Q2018 financial results call, stated (17-Oct-2018) the carrier will "take immediate action" to adjust to the current market environment, with a "rational and disciplined approach to growth". The carrier plans to retire three Embraer 170 and two Boeing 737-700 and a further three aircraft retirement is "under consideration depending on financial performance". In addition, the carrier is considering the following network adjustments: 

With these changes, capacity (ASK) growth "will remain flat in 2019 compared to 2018".

Jazeera Airways opened (17-Oct-2018) a 470sqm duty free shopping area at Kuwait International Airport terminal 5 in partnership with Dufry and That Al Salasil. The store offers more than 3000 items across food, beauty, travel accessories and jewellery. Jazeera Airways CEO Rohit Ramachandran said there are "more services and features ready to roll out at the new terminal in the coming months". [more - original PR]

SKYWAY Costa Rica commenced (17-Oct-2018) operations, offering services including scheduled operations, charters, ground transportation, car rental and helicopter flights. The carrier operates with LET L410 UVP E20 aircraft from San Jose to Puerto Jiminez, Drake, Arenal, Liberia, Manuel Antonio, Quepos, Tamarindo and Bocas Del Toro Airport in Panama. Managing director Kenneth Roqhuett stated: "I lead our team with a safety culture I learned in the US military as an aviation officer, ensuring all operational and maintenance facets are audited and monitored to achieve the highest level of service and safety". SKYWAY CR provides an array of transportation options including concierge service for hotels, restaurants, tours, spas and all inclusive vacation packages bookings. [more - original PR]

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Latest Reports

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Airport Finance & Privatisation Review 2018

Airport Finance & Privatisation Review 2018

IATA AGM CAPA Daily Day 3: 05-Jun-2018

Airline Leader

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LCCs are changing the shape of long-haul aviation

Issue 46
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    China's Belt & Road Initiative and Aviation

    Issue 45
    • A massive global initiative: aviation legacy could entrench liberal market access
    • Airports recovering from airline consolidation
    • Fleet changes as airlines reevaluate
    • Russia’s RoI on USD15 billion World Cup investment
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