Airbus announced (06-Jun-2023) new cabin features for the A200 Family, following feedback from the market. The cabin enhancements include the 'Airspace XL Bin' provided by Diehl Aviation, which offers increased capacity and lighter weight. Airbus will also integrate a redesigned and improved passenger service unit (PSU), provided by Astronics Corporation, and an enhanced ceiling. This is the first PSU collaboration between Astronics and Airbus. An optional third LED light is also offered, located under the new bin. The new A220 Airspace XL Bins will become available from 2025 and will be retrofittable and offer increased capacity of around 19 more passenger bags on the A220-300. They will also accommodate longer and heavier payload items due to a four frame design. [more - original PR] [more - original PR - II]
IATA: Airline financial performance in 2023 is beating expectations; USD9.8 bn net profit predicted
The International Air Transport Association (IATA) has announced an expected strengthening of airline industry profitability in an upgrade of its outlook for 2023. Airline industry net profits are expected to reach USD9.8 billion in 2023 (1.2% net profit margin) which is more than double the previous forecast of USD4.7 billion from Dec-2022.
Stronger profitability is supported by several positive developments, including China lifting COVID-19 restrictions earlier in the year than anticipated; cargo revenues remaining above pre-pandemic levels even though volumes have not; and on cost side, jet fuel prices, although still high, have moderated over the first half of the year.
Total revenues are expected to grow 9.7% year over year to USD803 billion. This is the first time that industry revenues will top the USD800 billion mark since 2019 (USD838 billion). Expense growth is expected to be contained to an 8.1% annual increase.
Around 4.35 billion people are expected to travel in 2023, which is closing in on the 4.54 billion who flew in 2019.
High quality, high service terminals exist at airports for the users of private and business aircraft, and notably those offered by the large Fixed Based Operators (FBOs).
Within commercial airports top revenue producers and loyalty card holders can use executive lounge facilities offered by airlines and alliances, directly or through third parties, which include the airport itself.
But there is a so far relatively untested third market of people with money to spend but not enough of it to merit even fractional business jet ownership, or who prefer larger commercial aircraft anyway. Those who travel frequently for business and/or leisure, alone or with family, who use commercial airports but who do not, for whatever reason, commit to one airline or alliance – people who seek to make their life as easy as possible. They are a market in search of a supplier – and now they have one.
Giant markets, giant potential – how does India’s air travel development compare with China’s?
India has become one of the hottest markets for aircraft manufacturers as airlines place hundreds of new orders to support growth plans based on India’s vast untapped demand for air travel. The country will soon have the world’s largest population, yet it is also relatively underserved in terms of airline capacity.
Lured by this dynamic, India’s airlines have collectively placed significantly more orders than the current fleet size.
Comparing India with China is an interesting exercise, as they now have very similar population sizes, and are both fast growing aviation markets. But China currently has a far greater air service market penetration, which highlights the scope of the potential in India.
This analysis examines some of the similarities and differences between the world’s two largest markets. China has more passenger traffic, but India’s rate of growth has been at least as high over the past decade. And while China also has a much larger fleet, order numbers are fairly similar.
IATA: Domestic travel now recovered, upward international trends, but hurdles still remain
The International Air Transport Association (IATA), has brought leaders of the global aviation industry together in Istanbul, Türkiye, for the 79th IATA Annual General Meeting (AGM) and World Air Transport Summit.
IATA has announced continued strong passenger traffic demand in Apr-2023. Total traffic in the month (measured in revenue passenger kilometers or RPKs) rose 45.8% compared to Apr-2022. Globally, traffic is now at 90.5% of pre-COVID levels. At 81.3%, industry load factor was only 1.8 percentage points below pre-pandemic level.
However, pre-COVID problems such as blocked airline funds continue to threaten connectivity with Nigeria, Bangladesh, Algeria, Pakistan and Lebanon the biggest culprits.
Meanwhile, a new analysis shows that reported unruly passenger incidents increased in 2022 compared to 2021.
International airline capacity in the Asia-Pacific market is continuing its upward momentum as it gradually closes the gap with the other major global regions that recovered sooner.
Asia-Pacific international seat capacity is still well below pre-pandemic levels, but is nevertheless rising during its rebound year. While the increase is significant, it would no doubt have been steeper without some of the growth constraints confronting the airline industry.
Demand has roared back, and many airlines have struggled to keep pace in terms of seat supply as they seek to return the remainder of their parked aircraft to service and obtain additional aircraft. Supply chain bottlenecks have not helped the situation either.
But overall the trend is encouraging, and the data points from CAPA and OAG in this analysis provide a snapshot of the recovery dynamics in the Asia-Pacific region.
Upcoming Event
Singapore: CTC Singapore Corporate Travel Summit
CTC Singapore will introduce our “Corporate Branches” format, designed to ensure all aspects of the corporate travel ecosystem are explored and featured in our signature exhibition space.
Upcoming Event
Querétaro: CAPA Latin America Aviation & LCCs Summit
The CAPA Latin America Summit is part of CAPA's regional summit series and is highly regarded as a benchmark event for the regional air travel industry.
Labor – Skill shortages, pay and productivity
Airlines spent 2021 and 2022 striving to rebuild workforces that were slashed during the pandemic. Airline employment has now retuned to close to normal, although some skilled roles remain in high demand and the dynamics of the labor market have shifted. Employees at most North American airlines, particularly pilots, have unprecedented leverage in the latest rounds of negotiations. Will those operators be successful in gaining some productivity improvements to offset some of the labor costs increases? Have the pay increases already instituted by some airlines succeeded in retaining pilots? Have training bottlenecks that hampered some US operators last year smoothed out?
IATA announced (05-Jun-2023) an expected strengthening of airline industry profitability in an upgrade of its outlook for 2023. Highlights include:
- Airline industry net profits are expected to reach USD9.8 billion in 2023 (1.2% net profit margin), more than double the previous forecast of USD4.7 billion in Dec-2022;
- Airline industry operating profits are expected to reach USD22.4 billion in 2023, improved over the Dec-2022 forecast of a USD3.2 billion operating profit. It is also more than double the USD10.1 billion operating profit estimated for 2022;
- Around 4.35 billion people are expected to travel in 2023, approaching the 4.54 billion who flew in 2019;
- Cargo volumes are expected to be 57.8 million tonnes, which has slipped below the 61.5 million tonnes carried in 2019 with a sharp slowing of international trade volumes;
- Total revenues are expected to grow 9.7% year-on-year to USD803 billion. This is the first time that industry revenues will exceed USD800 billion since the 2019 level of USD838 billion. Expense growth is expected to be contained to an 8.1% annual increase.
IATA director general Willie Walsh stated: "Airline financial performance in 2023 is beating expectations. Stronger profitability is supported by several positive developments". Mr Walsh said: "Economic uncertainties have not dampened the desire to travel, even as ticket prices absorbed elevated fuel costs". He added: "Repairing damaged balance sheets and providing investors with sustainable returns on their capital will continue to be a challenge for many airlines". [more - original PR]
Star Alliance appointed (05-Jun-2023) Theo Panagiotoulias as CEO, effective "within the coming months". Mr Panagiotoulias has more than 25 years of international experience in the airline and aviation industry and previously served as Hawaiian Airlines SVP for global sales and alliances since 2014. Mr Panagiotoulias will succeed Charlotta Wieland, who was seconded from SAS to serve as Star Alliance interim CEO since Jan-2023. Ms Wieland will return to SAS and also rejoin Star Alliance's management board as SAS representative. [more - original PR]
IATA appointed (05-Jun-2023) RwandAir CEO Yvonne Manzi Makolo as IATA board of governors (BoG) chair for a one year term. Ms Makolo succeeds Pegasus Airlines chairperson Mehmet Tevfik Nane. Mr Nane will continue to serve on the BoG. Ms Makolo has served on the BoG since Nov-2020 and becomes the 81st chair and the first woman to take on the role. Ms Makolo said: "Leading a medium-sized airline in Africa gives me a unique perspective on issues that airlines hold in common. At the top of the agenda are decarbonization, improving safety, the transformation to modern airline retailing, and ensuring we have cost-efficient infrastructure". IATA director general Willie Walsh said: "I look forward to working with Yvonne as we tackle the important challenges of sustainability, rebuilding the aviation workforce while growing diversity and reinforcing the global standards that are so critical for efficient connectivity". IATA announced IndiGo CEO Pieter Elbers will serve as BoG chair from Jun-2024, following Ms Makolo's term. [more - original PR] [more - original PR - II]
IATA stated (05-Jun-2023) that while the global airline industry is expected to return to profitability in 2023, financial performance across regions remains diverse. Industry financials are improving in all regions from the "COVID-related depths" of 2020, although not all regions are expected to deliver a profit in 2023. IATA reported the following updated regional outlook:
- North America: Remains the standout region in terms of financial performance. Consumer spending has remained solid, despite cost of living pressures, and the demand for air travel remains "robust". Air passenger demand is forecast to exceed the 2019 level in 2023;
- Europe: Notwithstanding various capacity constraints experienced over the summer period, European carriers were able to return to profit in 2022. That profitability will strengthen further in 2023. The key regional risks relate to the war in Ukraine, labour unrest and concerns about economic performance in some key countries;
- Asia Pacific: Now that all economies in the region have lifted COVID-19 travel restrictions, the industry recovery is underway. A sharp rise in both passenger volumes and capacity is expected to be reflected in a sizeable improvement in 2023 financial results and a narrowing of the gap to other regions;
- Latin America: Passenger volumes are recovering quickly, but the financial performance varies considerably across the region. The region will remain in the red, although some airlines are expected to post solid profits. Overall, industry financial performance is expected to continue to improve, but a challenging economic backdrop in a number of countries is dampening the pace of recovery;
- Middle East: The region's return to profitability in 2022 was supported by a significant increase in the passenger load factor of almost 25pp, outstripping the performance of other regions. Middle East carriers have been swiftly rebuilding their international networks and the region's international connectivity returned to 98% of its pre-COVID-19 level in Mar-2023;
- Africa: Remains a "difficult" market in which to operate an airline, with economic, infrastructure and connectivity challenges impacting the industry performance. Despite these challenges, there is still "robust" demand for air travel in the region which underpins the continued move towards a return to overall industry profitability. [more - original PR]
Canadian Council for Sustainable Aviation Fuels launches Canada's first SAF roadmap
Canadian Council for Sustainable Aviation Fuels launched (05-Jun-2023) Canada's first sustainable aviation fuel (SAF) roadmap, detailing policy framework, priority actions and next steps towards net zero carbon emissions by 2050. The roadmap focuses on the following key objectives:
- Immediate decarbonisation: Maximise SAF now from commercial ready pathways;
- Feedstock activation: Establish commercial pathways for all Canada's feedstocks;
- Innovation drive: Launch demonstrations with homegrown technology in multiple pathways.
The roadmap is premised on the target of consuming one billion litres of SAF by 2030, representing 10% of all jet fuel use in Canada. By 2035, Canada is expected to produce SAF to meet 25% of total domestic jet fuel demand, reducing emissions by up to 20%. The roadmap was developed in collaboration with the Transition Accelerator and Energy Futures Lab. [more - original PR]
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This report utilises the the CAPA Aircraft Interiors Database to analyse recent industry trends with data, visualising areas that have shown tremendous growth while providing clarity on how leading suppliers in each sector have shrunk and grown.