Volaris CEO Enrique Beltranena, via his personal LinkedIn account, announced (13-Nov-2019) the carrier decided to "freeze the growth" of its subsidiary, Volaris Costa Rica, due to an increase in taxes, fuel and airport costs at San Jose Juan Santamaria International Airport. Mr Beltranena stated: "An increase in operational costs for Volaris of around 59% make it unviable for any carrier to develop the local aviation".
Low cost long haul operators are establishing partnerships with short haul low cost airlines as a means of expanding their network breadth and supporting their growth aspirations. For long haul operators, connecting traffic is critical in scaling sustainably, especially as very few long haul destinations generate enough demand to justify year round capacity, while their partners benefit from additional traffic growth in short haul markets. Legacy carriers, who have long ceded competitive ground to short haul LCCs, could see history repeating itself as long haul-short haul LCC partnerships gain more momentum and disrupt full service carriers’ long haul networks.
- Does the group strategy lend itself best to delivering connecting traffic?
- How do long haul-short haul partnerships enable growth and scale?
- Are these new partnership arrangements set to disrupt network carriers’ long haul operations?
- How seamless are self connecting platforms and virtual interlining? What role can airports play in enabling connectivity?
- In which markets do long haul-short haul LCC partnerships proliferate?
- Can long haul low cost carrier operate as stand alone entities without short haul partners?
CAPA’s Asia Aviation Summit explores key issues & opportunities facing the industry in this region. A separate Corporate Travel Summit is being held at this time for buyers and suppliers on how these issues & opportunities impact their travel programmes.
The CTC-CAPA Corporate Travel Gathering - Australia will take place in November 2019 with the purpose of providing corporate travel buyers with strategic and operational skills to create a traveller centric programme.
Prague Václav Havel Airport introduced (13-Nov-2019) a long term development plan for the period to 2035. Czech Republic's Ministry of Finance approved a planned CZK16 billion (EUR625.7 million) investment in phase one terminal 2 expansion work. The work is to be completed in 2028. The airport will use its own resources to fund the project. Other development projects relating terminal and airfield development will be considers and approved at a later date. Long term construction planning is required to addressed expected traffic growth and maintain market share. [more - original PR - Czech]
SpiceJet chairman and MD Ajay Singh attributed (13-Nov-2019) the LCC's losses in Q2FY2019/2020 partly to a seasonally weak quarter and decelerating growth in India's aviation sector, stating: "With the industry's growth rate slowing down in the past few months the impact is evident on the bottom line. We, however, remain optimistic that the sector will regain the lost momentum as the inherent demand remains very strong". Mr Singh also noted the continued grounding of SpiceJet's 13 Boeing 737 MAX 8s "has hit our growth plans adversely and resulted in inefficient operations and as a result, increase in costs". He reported the LCC "added 37 planes to our fleet in the past six months" and said "The likely return to service of the 737 MAX early next year...would mean that SpiceJet has at its disposal more than 25 brand new planes". [more - original PR]
AirAsia X Group CEO Nadda Buranasiri stated (13-Nov-2019) the company recorded "moderate passenger growth" in 3Q2019 due to global economic and geopolitical challenges. Mr Buranasiri added: "That being said, the appetite for air travel in the region has remained robust and as a group we have exercised capacity discipline and embarked on a sustainable fleet and network growth program in line with consumer demand, particularly in emerging and developing Asian destinations where demand for value-driven air travel remains strongest". [more - original PR]
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- Contrasting union activity around the regions.