Air Serbia: the youthful 90-year old marks first year of New York service, suspends Abu Dhabi
Air Serbia celebrated its 90th birthday on 17-Jun-2017, making it the world's eighth oldest airline still in operation (counting also its predecessor brands Aeroput, JAT and Jat Airways).
The airline was most recently relaunched in 2013, after Etihad Airways invested in a 49% stake. Under the Air Serbia name, which will turn four in Oct-2017, it has returned to profit (but has yet to announce its 2016 results) by reducing unit costs and realigning its network and commercial positioning.
In a busy month for symbolic milestones, 23-Jun-2017 marked the first anniversary of Air Serbia's only long haul operation: Belgrade-New York. The route has enjoyed better load factors than the airline as a whole, but with soft yields.
Under CEO Dane Kondić, Air Serbia is continuing to evolve. A recent review of its five-year business plan has led to a decision to increase its focus on shorter routes, specifically suspending its services from Belgrade to Etihad's Abu Dhabi hub and Istanbul. It has also re-equipped its Airbus A320 family with higher density seating, migrated to Sabre and introduced an unbundled ticket offer. An expanded codeshare strategy has helped to offset increased competition, but the threat from LCC Wizz Air is growing.
Hong Kong-London: Hong Kong Airlines entering largest Asia-Europe market, and a potential JV
Hong Kong to London is the largest market between Asia and Europe for total passengers and premium passengers. It is a logical destination for HNA's Hong Kong Airlines, which is embarking on long haul expansion and in Aug-2017 receives its first A350.
The Hong Kong-London market has nearly returned to its 2007 size, when Oasis Hong Kong briefly served the cities. Unlike Oasis, Hong Kong Airlines is a full service and network airline; Oasis only served London and Vancouver. Hong Kong Airlines will have a normal economy and business offering, unlike its all premium A330 Hong Kong-London Gatwick service in 2012.
In the last five years since its all premium folly Hong Kong Airlines has grown significantly and matured, although it still lacks a strong home market perception. Hong Kong Airlines can be expected to form a JV on the route, although it is unclear whether it will be able to command a yield premium.
India’s aircraft orders to exceed 1,000 with Jet Airways’ imminent order; infrastructure a problem
Low cost carriers account for more than 85% of India’s current order book of 923 aircraft, but in the coming weeks two of its full service airlines will add to the tally.
Jet Airways is expected to place an order for a further 100 narrowbody aircraft (this figure may include options) – taking its total of the type to 175 – while Vistara is likely to order 50 narrowbodies and 50 widebodies, according to CAPA’s earlier research.
With these planned acquisitions, India’s order book will reach 1123 aircraft – the third largest in the world after the USA and China. And its ratio of 2.2 aircraft on order for every aircraft in service would be the highest of any major aviation market.
The projected order book will be dominated by narrowbodies, accounting for 86% of the total. Widebodies and regional aircraft account for just 6% and 8% of the total, and this is after orders in recent weeks for 50 ATR-72s by IndiGo and 25 Q400s by SpiceJet.
Air New Zealand joins Qantas Airways in evaluating both the 777X and A350 for its future widebody needs. Air NZ is an all-Boeing operator for its long haul fleet, but Airbus has been eager to promote the A350. Air NZ's 777-200ERs are approaching mid-life, and Air NZ wants new aircraft to take advantage of the latest efficiencies and, in particular, range capabilities as it seeks new markets in the Americas.
Air New Zealand wants to fly further in North America and South America than Houston and Buenos Aires. North America is Air NZ's largest long haul market, and is bigger than Asia.
For North America, a nonstop flight to New York is the obvious candidate and one the New Zealand government has wanted – even looking for fifth freedom operators to fly Auckland-New York (Qantas will consider this for the next decade). The US market is helped by Air NZ's United partnership.
Other South American points will be further, and mean that Air NZ needs to find a new partner. The airline's situation is unlike that of Qantas, and a nonstop flight to London is not on the cards.
SAS: first lower cost non-Scandinavian bases will be Málaga and (expensive, congested) Heathrow
SAS has announced a new base in Málaga and confirmed that its new London base will be at Heathrow. It had previously communicated plans for bases in Spain and London, without specifying the airports.
SAS has established an Irish subsidiary, SAS Ireland, to operate from the two new bases and submitted an application to the Irish authorities for an AOC. It has recruited a management team and is in the process of hiring cabin crew and pilots through an external agency. The first flights from SAS' first bases outside Scandinavia are planned for the start of winter 2017/2018.
Málaga is SAS' biggest leisure destination and Heathrow is its biggest airport outside Scandinavia. In both markets the LCC competition is strong - in Heathrow's case on a city pair basis. Málaga seems a fairly obvious choice, but Heathrow's high charges and congestion might have pushed SAS to choose a different London airport. It seems that SAS does not wish to alienate its core London customers, but will still benefit from the lower labour costs that are available almost anywhere in Europe outside Scandinavia.
SAS' move is unusual for a legacy airline, demonstrating new creative thinking spurred by competitor disruption.
Upcoming Event
Upcoming Event
Sydney: CAPA Australia Pacific Aviation Summit
CEOs from airlines and airports across Australia, New Zealand and the Pacific Islands, plus a selection of leaders from airlines serving the region, debate the hot topics facing aviation ‘Down Under’ in the year ahead.
Commercial Aircraft Corporation of China (COMAC), via its official Weibo account, announced (28-Jun-2017) the ARJ21 aircraft has been operation for one year as of 28-Jun-2017. In the past year, Chengdu Airlines transported 15,000 passengers with two of the aircraft type, with load factor averaging close to 90%. Chengdu Airlines ordered 30 of the aircraft.
ANA Group international passenger numbers up 5% - traffic highlights for May-2017:
- Passengers:
- Domestic: 3.3 million, +9.6% year-on-year;
- International: 743,495, +5.3%;
- North America: 172,177, +1.9%;
- Europe: 74,182, +28.9%;
- Asia: 497,136, +3.7%;
- Passenger load factor:
- Domestic: 65.7%
- International: 72.4%;
- North America: 75.3%;
- Europe: 80.3%;
- Asia: 67.4%;
- Cargo:
- Domestic: 34,780 tons, +5.0%;
- International: 70,103 tons, +13.1%. [more - original PR]
India Cabinet gives 'in principle' approval for disinvestment of Air India and five subsidiaries
India's Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, approved (28-Jun-2017) the fourth tranche recommendations of NITI Aayog on strategic disinvestment of CPSE (strategic disinvestment of Air India and five of its subsidiaries) based on the recommendations of Core Group of Secretaries on Disinvestment (CGD). Approval details are as follows:
- 'In principle' approval for considering strategic disinvestment of Air India and five subsidiaries;
-
Constitution of an Air India specific Alternative Mechanism headed by the Minister of Finance and including the Minister for Civil Aviation and such other Minister(s) to guide the process on strategic disinvestment from time to time and to decide the following:
-
-
Treatment of "unsustainable debt" of Air India;
-
Divestment of certain assets to a shell company;
- Demerger and strategic disinvestment of three profit making subsidiaries;
-
The quantum of disinvestment;
-
The "universe of bidders".
-
Air India has five subsidiaries: Air India Engineering Services, Air India Transport Services, Air India Charters, Hotel Corporation of India and Air India SATS (along with Singapore Airport Terminal Services). [more - original PR]
VietJet Air reported (28-Jun-2017) 1.5 million passengers in May-2017 with a passenger load factor of more than 88%. Revenue at the end of May-2017 stood at VND8352 billion (USD368 million), an increase of 44% year-on-year. [more - original PR]
Chicago O'Hare International Airport passenger numbers up 1% - traffic highlights for May-2017:
- Passengers: 6.9 million, +1.2% year-on-year;
- Domestic: 5.8 million, +0.2%;
- International: 1.1 million, +6.3%;
- Cargo: 159,908 tonnes, +15.0%;
- Aircraft movements: 73,928, -1.6%;
- Domestic: 66,496, -2.0%;
- International: 7432, +2.9%. [more - original PR]
US White House Office of the Press Secretary confirmed (26-Jun-2017) the US has begun accepting applications from India for the US Customs and Border Protection's (CBP) Global Entry Trusted Traveller Programme. In 2016, Indian visitors in the US spent nearly USD13 billion, making India the sixth largest market for US travel and tourism exports. [more - original PR]
Want More News Like This?
Airline Models Evolving
- Changing Business Models: The challenge of responding to travel trends
- Alliances and Beyond: Global alliances in transition
- Airports of the Future: The evolution of the airport
Global fleet and financing review 2017
- Global Fleet Outlook: deliveries peak as orders decline
- Global Aircraft Leasing: global aircraft leasing continues its international shift from west to east
- CAPA Financial Outlook: margins to stay above past cyclical peaks