The sudden collapse of WOW air, the LCC that took on Icelandair at its own game and lost, is likely to prompt a review of infrastructure needs at Keflavik Airport, which is the only international air gateway to the island.
The state airport operator Isavia has been criticised for its tardiness in preparation for the anticipated continuing increase in tourists especially, but WOW air’s collapse will take plenty of the sting out of that. Isavia says it will be examining the consequences that WOW air's withdrawal may have.
Isavia had predicted that there would be a fall in passenger numbers brought about by route consolidation alone this year (10% in the summer), and early statistics (Jan-Feb, around 6%) have supported that prediction, although not quite to the degree that Isavia imagined.
This collapse also prompts the question which airline(s) – if any – will take up WOW air's capacity and fly its routes, and whether the entire aviation/tourist enterprise of Iceland might start to head back towards the ‘niche’ territory where it contentedly sat for decades.
In Italy, local airlines have a lower seat share than in any other major European market. Moreover, Italy is one of only two countries in Western Europe's top 10 where the leading airline is not indigenous: Ryanair leads in both Italy and Spain. However, in Spain, number two Vueling and number three Iberia are both part of IAG and their combined seat share is more than Ryanair's. That leaves Alitalia with the most fragile market position of a national airline in a major market.
Italy is firmly among Western Europe's top five countries by population, GDP, tourist arrivals and airline seat numbers. However, its GDP per capita and hence, the propensity for air travel as measured by airline seats per capita, are both low within this group of five.
Italy is the smallest of Western Europe's top five aviation markets by seat numbers, behind the UK, Germany, Spain and France. It is also the only one without an airline ranking among Europe's top 10 by 2018 passenger numbers: Alitalia ranks 15th by this measure.
On 2-May-2019 Alitalia approaches the second anniversary of its extraordinary administration and, on 31-Mar-2019, yet another deadline slipped for securing its future with new investors.
WOW air ceased operations on 28-Mar-2019. The pioneering the low cost connecting model used its Reykjavik hub for one-stop Europe-North America services. From a start-up in 2012, it had 31% of Iceland's seat capacity in 2018. It only entered the North Atlantic in Mar-2015, but quickly became its second largest LCC (behind Norwegian), with 1.6% of seats in 2018.
A CAPA SWOT analysis on WOW air in Sep-2017 identified over-expansion as one of the LCC's greatest risks. Losses in 2017 gave some indication of its financial stresses, but a provisional sale to Icelandair in early Nov-2018 appeared to provide relief.
When this deal and another with Indigo Partners evaporated, WOW air's funding problems rapidly escalated, in spite of a significant cut to its fleet and network.
Russia was Europe's number seven aviation market by seats in 2018, after the big five Western European countries (UK, Germany, Spain, France and Italy) and Turkey. Seat numbers in the Russian market grew by 11% in 2018, faster than in any of the other top seven countries.
As with elsewhere, passenger traffic growth is related to GDP growth in Russia, but with a much higher multiplier compared with the global market. Although geopolitical and macroeconomic factors have sometimes dented demand for international air travel to/from Russia, its domestic market has enjoyed robust and reliable growth for several years.
After the collapse of the former number two airline Transaero in 2015, which accelerated the Aeroflot-led consolidation of Russia's airline industry, the top five became a top four.
Aeroflot Group remains Russia's leading airline group by some distance, followed by S7 Group, Ural Airlines and UTair Group. LCC share is small, but growing, led by Aeroflot subsidiary Pobeda. However, the consolidation process appears to have reached a plateau.
JetBlue Airways’ final decision to declare plans to enter the trans Atlantic market with service to London from its Boston and New York JFK focus cities was hardly a surprise. The airline has been dragging out the decision for years, and during that time has taken members of the three large trans Atlantic JVs to task for their market concentration.
Even as Jetblue has finally firmed up plans to operate in the trans Atlantic market, key questions remain, including which London area airports will join its roster of destinations and the specific time scale for launching the new flights.
The risks for JetBlue in its trans Atlantic undertaking are not insignificant: the market is arguably the most contested in the world, and there’s a long list of value airlines that have attempted to break into the market with unsuccessful outcomes. But in many ways JetBlue had no choice but to advance its model into longer haul international markets as questions were growing about its ultimate long term strategy.
US DoT Deputy Assistant Secretary of Transportation and International Affairs David Short discusses the agency’s top priorities for 2019 and the “landmark’ agreement with the UK that will “snap into place” as soon as Brexit happens.
CAPA’s MEAAS Summit attracts the highest calibre of thought-leaders in the industry. Join us as we: explore both markets growths opportunities; discuss infrastructure constraints and the airline and airport relationship; as well as emerging technologies.
CAPA’s events attract the highest calibre of thought-leaders in the industry. This summit brings together strong C-Level executive representation from all types of business models to explore exactly how to make money in today’s economic environment.
Sydney Kingsford Smith Airport reported (18-Apr-2019) the following traffic highlights for Mar-2019:
United Airlines EVP and CFO Gerald Laderman reported (17-Apr-2019) the airline expects the following results for 2Q2019 and FY2019:
Brazil ANAC stated (17-Apr-2019) Avianca Brazil will return eight additional aircraft to lessors in the near future, commencing 22-Apr-2019. The airline will return seven aircraft to GECAS and one aircraft to PK AirFinance. [more - original PR - Portuguese]
Flughafen Berlin Brandenburg GmbH reported (17-Apr-2019) the following traffic highlights:
AirAsia Group announced (17-Apr-2019) its wholly owned subsidiary AirAsia Investment, Gumin Company and Hai Au Aviation amicably agreed to terminate and release each other from all obligations under the transaction agreements in relation to their proposed JV in Vietnam, effective 17-Apr-2019. AirAsia Group stated it remains interested in operating a LCC in Vietnam due to the country's favourable geographical location, expanding aviation market and overall growth potential. [more - original PR]
AirAsia Group reported (17-Apr-2019) shareholders approved the disposal of 100% equity interest in its Merah Aviation entities to AS Air Lease Holdings 5T DAC, an entity indirectly controlled by Castlelake. As previously reported by CAPA, Merah Aviation Asset Holding comprises 25 aircraft to be leased to AirAsia. AirAsia Group CEO Tony Fernandes, via his official Twitter account, commented: "Selling our aircraft monetises all our aircraft at high prices and avoids residual risk and allows us to return cash to shareholders and invest in our new digital business". [more - original PR]