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Restoring Japanese outbound travel will be a key goal for ANA international recovery
29-Nov-2022

Restoring Japanese outbound travel will be a key goal for ANA international recovery

All Nippon Airways (ANA) is optimistic that improvements in Japanese outbound leisure traffic flows will help drive the next phase of its international capacity recovery.

The airline’s international traffic has increased dramatically since the Japanese government lifted some entry restrictions on 11-Oct-2022, although the gains have been uneven across different market sectors.

Inbound leisure traffic has experienced the biggest increases, and ANA has rebuilt its North American network almost to pre-pandemic levels. However, outbound leisure travel has so far been much slower to respond, meaning that this is also the market segment with the most growth potential.

In terms of geographic markets, Mainland China traffic remains heavily constrained, and European routes have been severely hampered by ANA’s avoidance of Russian airspace. Similar issues confront ANA’s rival, Japan Airlines.

Like many other Asia-Pacific airlines, ANA is looking to lock down its long term widebody aircraft replacement plans.

However, its efforts are being complicated by delays in the Boeing 777X program, which may require the airline to look at other short term measures.

Premium Analysis
Azul ups the competitive stakes at Sao Paulo Congonhas with its long-awaited expansion
28-Nov-2022

Azul ups the competitive stakes at Sao Paulo Congonhas with its long-awaited expansion

Brazilian operator Azul has held one of the most bullish views as the global aviation industry reshapes itself in a post-pandemic environment.

The airline believes it could eventually serve up to 200 destinations within Brazil. But in the short term, Azul is gearing up to double its presence at São Paulo Congonhas after receiving coveted slots at the airport.

Azul has long sought to build up its presence at Congonhas, and the company believes its ability to tap a diverse fleet will create a competitive advantage as it grows in the market. 

Analysis
For Asian airlines, China market is 'the elephant that isn’t in the room'
25-Nov-2022

For Asian airlines, China market is 'the elephant that isn’t in the room'

The uncertainty surrounding the reopening of Mainland China’s air travel market remains the major wild card in the outlook for the Asia-Pacific airline industry. Restoring Chinese international traffic flows will be essential to the region’s full recovery, but there are very few details regarding when – and how – this will occur.

Growth in outbound and inbound travel had made China one of the most important markets for many of the region’s airlines before the pandemic. However, international capacity in Mainland China is at skeleton levels due to its strict COVID-19 travel policies.

Airlines are tentatively planning for China restrictions to ease sometime in 2023. Despite some limited moves by the Chinese government recently, there is not yet a timeline for more meaningful steps to reopen cross-border travel.

This limits the international recovery for some of the Asia-Pacific region’s airlines. Even if these airlines fully restore other routes, they will still be missing a large chunk of their pre-COVID operations.

Premium Analysis
New York Port Authority schedules JFK T6 construction for 1Q2023 - the final part of its 'Vision'
24-Nov-2022

New York Port Authority schedules JFK T6 construction for 1Q2023 - the final part of its 'Vision'

New York's airports are collectively becoming the US capital for public-private airport infrastructure projects.

Hard on the heels of the completion of two terminal projects at LaGuardia Airport, the Port Authority has announced that a USD4.2 billion, ‘state of the art’ Terminal 6 construction project at New York John F Kennedy International Airport is scheduled to start in 1Q2023.

Other works at JFK include the USD9.5 billion development of New Terminal One that will anchor the airport's south side and which broke ground recently in Sep-2022.

This new infrastructure, at all three New York airports, is bestowing respect on facilities that have – perhaps justifiably – come in for a great deal of criticism in previous years.

Analysis
Europe aviation: Asia Pacific still a check on plateaued recovery
24-Nov-2022

Europe aviation: Asia Pacific still a check on plateaued recovery

According to IATA, international bookings for air travel are back to 80% of 2019 levels this year in the UK, and more than 70% in Germany. These nations were Europe's biggest aviation markets before the COVID-19 pandemic, so their pace of recovery is significant to Europe as a whole.

Outside Europe, international bookings are close to 80% of 2019 levels in the US, but only 30% in Japan and 5% in China.

In capacity terms, in the week of 21-Nov-2022 Europe's seat numbers are at 84.5%, which represents a shortfall of 15.5% against the equivalent week in 2019.

This is a deterioration of 0.4ppts from last week and right at the bottom end of the narrow range of 85% to 86% of 2019 capacity that Europe's recovery has occupied for more than six months.

Europe's intercontinental capacity to most regions is recovering faster than intra-Europe, with the notable exception of Europe-Asia Pacific.

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Cargo – Are the good times over, or can the sector continue to profit?
Recorded at CAPA Asia Aviation Summit & Awards for Excellence, 3-4 Nov 2022

Cargo – Are the good times over, or can the sector continue to profit?

The Asia Pacific is the world’s factory, accounting for more than 40% of global exports of manufactured goods in 2021. With the COVID-19 induced disruption to shipping and supply chains, air cargo had a moment in the sun, reporting two consecutive years of record revenue. With passenger travel largely absent, air cargo was one of the few bright spots for Asia Pacific regional carriers in 2020 and 2021.

However, as passenger traffic comes back and shipping begins to regain some of its competitiveness, cargo sector revenues and profits are slowly coming back to earth. Worse still for Asia Pacific airlines, traditional Western export markets are increasingly moving to bring manufacturing onshore, particularly for high value goods. Geopolitics is also hurting the sector, as the relationship between China and the West becomes ever more frosty and barriers to trade are erected.

  • What is the outlook for air cargo in the Asia Pacific?
  • How can regional carriers benefit from major trends such as eCommerce, growing Asia Pacific regional consumption and ongoing supply chain instability?
  • What does the growing regionalization trend mean for air cargo. Are agreements like the new Regional Comprehensive Economic Partnership (RCEP) going to support regional trade and air cargo?

Moderator: The Chinese University of Hong Kong, Assistant Professor, Faculty of Law, Jae Woon (June) Lee
Panel:

  • Cathay Pacific, Regional Head of Cargo, Southeast Asia, Siddhant Iyer
  • Teleport, CEO, Pete Chareonwongsak
  • IBS Software, SVP for APAC, Gautam Shekar

Latest News Headlines

319 news items were published to CAPA Members in the past two days. What could you be missing?
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Australia's Bureau of Infrastructure, Transport and Regional Economics (BITRE) reported (21-Nov-2022) the following domestic on time performance highlights for Oct-2022:

New York's Governor Kathy Hochul announced (17-Nov-2022) the USD4.2 billion Terminal 6 construction project at New York John F Kennedy International Airport is scheduled to commence in 1Q2023, following a financial close and lease signing and US FAA environmental approval for Phase I of the project. The 1.2 million sqft facility is a public-private partnership (PPP) between Port Authority of New York and New Jersey (PANYNJ) and JFK Millennium Partners (JMP) and will feature 10 gates, connection to JetBlue Airways' Terminal 5, advanced security processing technology and over 100,000sqft of restaurant and retail concessions space. PANYNJ will commit USD130 million in capital funding towards enabling infrastructure as part of the PPP, including airside improvements and utility enhancements such as electrical support. The terminal will be constructed in two phases, with the first new gates to open in 2026 and project completion anticipated in 2028. The project is expected to create over 4000 jobs and direct wages of USD1.9 billion. Vantage Airport Group will the principal developer and operator of the new terminal, with Corsair Capital serving as the project's principal financial sponsor. [more - original PR - I] [more - original PR - II]

US and Ecuador signed (17-Nov-2022) a bilateral open skies agreement, enabling the expansion of passenger and freight services between the countries. The agreement is expected to promote increased travel and trade, thereby catalysing economic growth and job opportunities. Negotiations on the agreement concluded in Dec-2021. The US now has reciprocal open skies agreements with over 130 partners. [more - original PR - US Department of State] [more - original PR - Ecuador Ministry of Transport - Spanish]

JetBlue Airways announced (16-Nov-2022) plans to launch New York JFK-Paris CDG and Boston-Paris CDG services from summer 2023. Launch dates and frequencies have yet to be announced. Paris will be the carrier's second trans Atlantic destination following the launch of London services in Aug-2021. According to OAG, Air France and Delta Air Lines are also scheduled to operate each route, while American Airlines will also serve Paris from New York JFK. [more - original PR]

Aena presented (16-Nov-2022) its strategic plan for 2022 to 2026, with projections including:

  • Pre-pandemic traffic levels (275 million passengers p/a) to return in 2024, rising to 300 million in 2026;
  • Commercial revenue per passenger in 2026 to increase by 12% compared to 2019;
  • Total commercial revenue in 2026 to increase by 23% compared to 2019;
  • Recovery of 2019 levels of consolidated EBITDA between 2024 and 2025;
  • EBITDA margin in Spain to reach 55% in 2025;
  • International assets to contribute 15% to the group's EBITDA in 2026.

The projected traffic recovery will allow Aena to resume dividend payments, with an 80% payout over the entire period to be proposed to shareholders. The dividend proposed for 2022 will be increased by an additional EUR1.37 per share over the resulting profit at the end of the fiscal year. [more - original PR]

Wizz Air and OMV signed (15-Nov-2022) a MoU for the supply of sustainable aviation fuel (SAF) from 2023 to 2030. The agreement is a key part of the airline's environmental strategy to reduce carbon emissions intensity by 25% by 2030 and reach net zero by 2050. [more - original PR]

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Latest Reports

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CAPA-Envest Global Airline Sustainability Benchmarking & Rating Report 2022

The CAPA-Envest Global Sustainability Benchmarking Report - 2022 provides an understanding of the status of emissions in the airline industry. It provides an independently evaluated “airline sustainability rating” system, based upon a range of key emissio

Airline Sustainability Benchmarking Report 2021 - Business Travel Edition

This report, jointly prepared by CAPA - Centre for Aviation (CAPA) and Envest Global (Envest), is designed to highlight some of the core elements of sustainable aviation, methods of quantifying individual airline sustainability credentials, and emissions.