Pegasus Airlines stated (Aug-2017) passenger numbers at Turkey's airports increased 10% year-on-year to 48.6 million in 2Q2017, according to Devlet Hava Meydanları İşletmesI (DHMİ). Foreign visitor arrivals increased for the first time since Jul-2015 in 2Q2017. [more - original PR]
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Investing in Latin America aviation, the expansion of LCCs and the impact of the digital revolution17-Aug-2017
Investing in Latin America aviation, the expansion of LCCs and the impact of the digital revolution
Investing in Latin America aviation, the expansion of LCCs and the impact of the digital revolution are just a selection of the key issues to be discussed at CAPA's Latin America Aviation Summit, to be held in Cartagena on 11/12-Sep-2017.
With at least a dozen CEOs already confirmed, the event promises to be a major gathering point for Latin American aviation leaders in 2017. It is a timely moment to be addressing the market, as most economies begin to emerge from the recent downturn and as new entrants, especially LCCs, start to change the shape of airline operations.
Other topics to be discussed will include the early effects of airline liberalisation in Argentina, the challenging issues of infrastructure, investing in the market and the status of connectivity. There are growing positive signs emerging from the region, with hopes that the dark days of economic downturn are slipping back into the past.
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Cebu Pacific Air delays acquisition of new generation widebody aircraft, and North America flights16-Aug-2017
Cebu Pacific Air delays acquisition of new generation widebody aircraft, and North America flights
Cebu Pacific Air has shelved the evaluation of new generation widebody aircraft and the potential launch of nonstop services to North America. Competition in the Philippines-North America market has intensified over the past year, prompting the Philippine LCC to rethink its widebody fleet strategy.
Irrational competition in the Philippines-Middle East market has also prompted Cebu Pacific to drop three of its four Middle East routes. The airline is now primarily using its fleet of eight A330s on short haul routes and will stick with the current widebody strategy, focusing on routes within East Asia of up to four hours, until long haul market conditions improve.
The Philippine LCC still aims eventually to serve the North America market, which would require new widebody aircraft such as the A350 or 787. However, the move into North America and a new widebody type is no longer under consideration for the short term.
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Airberlin files for insolvency. Lufthansa to cherry pick from its operation; easyJet also looking16-Aug-2017
Airberlin files for insolvency. Lufthansa to cherry pick from its operation; easyJet also looking
Air Berlin PLC, the parent of airberlin and NIKI, has filed for provisional insolvency proceedings in a court in Berlin-Charlottenburg (NIKI is not included). Lufthansa has said that it is supporting airberlin's restructuring efforts jointly with the German government and is in talks to take over parts of its operations.
The Lufthansa Group already wet leases Airbus narrowbodies from airberlin and the government is to provide a EUR150 million loan to airberlin, allowing it to continue to operate during its administration. Noises from the government suggest that closer ties between Germany's two biggest airline groups may not attract close regulatory scrutiny. Etihad called the filing "extremely disappointing" given its "extensive support" since it invested in 29% of Air Berlin PLC's equity in late 2011. It is also extremely costly for Etihad, hard on the heels of Alitalia's Jun-2017 entry into administration.
Given airberlin's long history of losses, it is no surprise that it is filing provisional insolvency proceedings, particularly as Etihad has run out of patience and cash to support it. Lufthansa has played a canny waiting game over a number of years and is now well placed to cherry pick those parts of airberlin's operation that suit it best without buying the whole loss-making enterprise. EasyJet also has a reported interest in airberlin assets. Lufthansa's priority will be to keep Ryanair out. The German Federal Cartel Office and the EU Commission will be watching with great interest.
Analysis
China Airlines targets Europe-Australia Kangaroo Route traffic to counter EVA's N America strategy16-Aug-2017
China Airlines targets Europe-Australia Kangaroo Route traffic to counter EVA's N America strategy
Taiwan's China Airlines is consolidating strategic developments from recent years into a strategy to target incremental Europe-Australia Kangaroo Route transfer traffic. This sixth freedom focus was not an explicit end goal as China Airlines moved its Bangkok-Europe services to nonstop, significantly upgraded its product, and took delivery of new 777-300ERs and A350s. The catalyst for the new focus appears to be China Airlines' intent to relaunch service to London and its needing feed to support the thin market.
The Europe-Australia focus gives China Airlines more differentiation from its Taiwanese rival EVA Air, the privately owned airline that has quickly expanded in the North America-Southeast Asia transfer market.
China Airlines rightfully considers EVA's North America focus to be at overcapacity, but Europe-Australia has seldom been a yield saviour. North America may be a safer long term play.
China Airlines is adding a second daily Sydney flight to support connections to European cities other than London, but overall China Airlines has a small proposition of destinations, frequency. Market awareness is also lacking. China Airlines can certainly earn incremental traffic, but China Airlines will need to beware adding too many flights for what should be a filler strategy.
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Cathay Pacific: depressed results but there may be rays of hope. Time to regain the initiative14-Aug-2017
Cathay Pacific: depressed results but there may be rays of hope. Time to regain the initiative
Cathay Pacific on 16-Aug-2017 reports financial results for 1H2017. These results follow from 2016 when Cathay for the first time since 2008 posted a group loss and became a whipping post: Bloomberg referred to "a horror story when it comes to Cathay". The South China Morning Post described "a flawed business model in a changing world".
No reprieve is expected in 1H2017, when Cathay embarked on a restructuring programme, which as is typical has a ramp-up period but front-loaded transformation costs. Fuel hedges are winding down but losses will still be pronounced. Cargo is the bright spot with an unexpected boost in yields. Passenger over-capacity persists in all key markets, and exacerbated especially in Europe and from Cathay's A350 deliveries. Declining passenger yields are closely watched and now may be re-balanced with less aggressive load factors.
There is considerable work ahead for Cathay. Yet any "horror story" would have been magnified by uncertainty. This may be fading with a change in practices and management. Cathay will now seek vindication of its premium hub strategy, geography and brand. While lack of detail will invite criticism, Cathay's future is in focus.
CAPA-ACTE Adelaide Aviation & Corporate Travel Summit
Upcoming Event
CAPA Latin America Aviation SummitMore
Upcoming Event
11-12
Sep
Cartagena: CAPA Latin America Aviation Summit
Bringing together high ranking executives of airlines, airports and travel and government organisations from across Latin America and beyond to address the key strategic and commercial issues affecting aviation development in the continent.
Avinor CEO Dag Falk-Petersen stated (16-Aug-2017) CO2 emissions are "a major challenge for aviation". Aviation accounts for 5% of CO2 emissions in Norway, according to Mr Falk-Petersen. He added: "We take this very seriously, and Avinor is working closely with the airlines to reduce emissions. The development of more fuel efficient aircraft, the introduction of jet biofuel and eventually electric aircraft for passenger traffic will help to alleviate these challenges". [more - original PR]
Beijing Capital International Airport reported (16-Aug-2017) traffic highlights for Jul-2017:
- Passengers: 8.0 million, -3.3% year-on-year;
- Aircraft movements: 48,959, -5.3%. [more - original PR]
Pegasus Airlines reported (16-Aug-2017) financial highlights for three months ended 30-Jun-2016:
- Revenue: TRY1223 million (USD341.6 million), 53.4% year-on-year;
- Costs: TRY1182 million (USD330.2 million), +29.9%;
- Fuel: TRY350.1 million (USD97.8 million), +52.1%;
- Labour: TRY170.1 million (USD47.5 million), +6.9%;
- Operating profit: TRY34.6 million (USD9.7 million), compared to a loss of TRY79.5 million (USD27.4 million) in p-c-p;
- Net profit: TRY160.1 million (USD44.7 million), compared to a loss of TRY12.4 million (USD4.3 million) in p-c-p;
- Passenger numbers: 6.9 million, +17.0%;
- Load factor: 83.8%, +6.8ppt;
- Yield: TRY134.8 (USD37.7), -13.5%;
- Average stage length: 979km, -1%;
- Total assets: TRY6426 million (USD1795 million);
- Cash and cash equivalents: TRY1200 million (USD335.2 million);
- Total liabilities: TRY4784 million (USD1336 million). [more - original PR]
*Based on the average conversion rate at TRY1 = USD0.279354 for 2Q2017
*Based on the average conversion rate at TRY1 = USD0.345146 for 2Q2016
Avinor Group reported (16-Aug-2017) the following financial highlights:
- Three months ended 30-Jun-2017:
- Total revenue: NOK2950 million (USD346.3 million), +7.1% year-on-year;
- Airport operations: NOK2622 million (USD307.8 million), +6.1%;
- Traffic income: NOK769.3 million (USD90.3 million, -2.6%;
- Security: NOK369.4 million (USD43.4 million), +20.4%;
- Duty free: NOK699 million (USD82.1 million), +5.9%;
- Parking: NOK236.4 million (USD27.8 million), +5.6%;
- Air navigation services: NOK522.3 million (USD61.3 million), +5.3%;
- En route charges: NOK281.3 million (USD33.0 million), +13.5%;
- Inter group income approach and control tower services: NOK205.4 million (USD24.1 million), +6.2%;
- Airport operations: NOK2622 million (USD307.8 million), +6.1%;
- EBITDA: NOK333.0 million (USD39.1 million), -65.3%;
- Airport operations: NOK818.9 million (USD96.1 million), -18.2%;
- Air navigation services: (NOK202.0 million) (USD23.7 million), compared to a profit of NOK36.6 million (USD4.3 million) in p-c-p;
- Net profit (loss): (NOK184.6 million) (USD21.7 million), compared to a profit of NOK464.6 million (USD54.8 million) in p-c-p;
- Total revenue: NOK2950 million (USD346.3 million), +7.1% year-on-year;
- Six months ended 30-Jun-2017:
- Total revenue: NOK5595 million (USD677.9 million), +10.9% year-on-year;
- Airport operations: NOK4968 million (USD601.9 million), +10.2%;
- Traffic income: NOK1450 million (USD175.7 million, -1.7%;
- Security: NOK677.0 million (USD82.0 million), +20.6%;
- Duty free: NOK1199 million (USD145.3 million), +4.1%;
- Parking: NOK445.2 million (USD53.9 million), +9.1%;
- Air navigation services: NOK1005 million (USD121.8 million), +6.3%;
- En route charges: NOK530.9 million (USD64.3 million), +13.8%;
- Inter group income approach and control tower services: NOK402.9 million (USD48.8 million), +5.9%;
- Airport operations: NOK4968 million (USD601.9 million), +10.2%;
- EBITDA: NOK882.6 million (USD106.9 million), -38.8%;
- Airport operations: NOK1403 million (USD170.0 million), -8.8%;
- Air navigation services: (NOK175.4 million) (USD21.3 million), compared to a profit of NOK32.2 million (USD3.8 million) in p-c-p;
- Net profit (loss): (NOK230.0 million) (USD27.9 million), compared to a profit of NOK346.3 million (USD41.0 million) in p-c-p;
- Total assets: NOK43,287 million (USD5245 million);
- Cash and cash equivalents: NOK1826 million (USD221.2 million);
- Total liabilities: NOK29,247 million (USD3544 million). [more - original PR]
- Total revenue: NOK5595 million (USD677.9 million), +10.9% year-on-year;
*Based on the average conversion rate at NOK1 = USD0.117392 in 2Q2017
*Based on the average conversion rate at NOK1 = USD0.117963 in 1H2017
*Based on the average conversion rate at NOK1 = USD0.121165 in 2Q2016
*Based on the average conversion rate at NOK1 = USD0.118509 in 1H2016
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17-Aug-2017 1:13 PM
Australia’s BITRE releases domestic airfare index for Aug-2017, domestic fares down 5%
Australia's Bureau of Infrastructure, Transport and Regional Economics (BITRE) released (17-Aug-2017) the Domestic Air Fare Index for Aug-2017 which showed the 'Best Discount Fare' Index (Jul-2003 = 100) for domestic travel declined 4.9% year-on-year to 54.7 in Aug-2017. 'Restricted economy' increased 5.6% year-on-year and 'Business class' declined 1.8% year-on-year. [more - original PR]
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