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".
Loading
Brazilian aviation is a study in contrasts. With Brazil being Latin America’s largest aviation market, the opportunity in the country is tremendous – trips per capita remain well below more mature markets, despite a more than doubling of passenger levels during the past decade.
That growth has occurred against a backdrop of tough operating conditions for Brazil’s airlines as the structural costs of doing business in the country remain high.
But there are signs of improvement surfacing, including the country’s government blocking efforts to reintroduce a free baggage requirement, and the consideration of eliminating some taxes. Those signs are fostering optimism that Brazil can reach its full passenger potential, but there remains uncertainty that recent reforms will have staying power.
It is always easy to tell that ‘disruption’ has turned into normality when organisations start to legislate for it.
The travel and transport industries are full of such disruption at the moment: Unmanned Aerial Vehicles (inadequate response); self-connection (left to a few large airports, most do not formally cater for it); the sharing economy; (and the daddy of them all) the environment (uncoordinated, ineffectual response to protests).
The UN World Tourism Organisation (UNWTO) has recently published a report – ‘New Business Models in the Accommodation Industry’ – which provides a systematic overview of the ways that both national governments and local authorities are “addressing” and managing new business models in the accommodation industry.
The UN is doing this just as a new variation on disruption shifts into gear – with accommodation sharing agencies such as Airbnb entering the hotel sector and some hotel groups targeting the sharing sector.
In addition to being a gateway to/from London, a city with more airline seats than any other in the world, London Heathrow Airport is also the UK's main international hub.
According to OAG data for the week of 12-Oct-2019, London Heathrow Airport has direct links with nine UK regional airports (i.e. excluding London). It is feed from these nine airports that gives Heathrow its UK hub status.
However, there are 20 airports in other Western European countries that have direct flights to more UK regional airports than Heathrow has (week of 12-Oct-2019, source: OAG): seven of these have at least double Heathrow's regional UK links, led by Jersey, with 21.
The majority of these airports are southern European leisure destinations and they do not threaten Heathrow's hub status. However, three important European hubs have more UK regional links than Heathrow: Amsterdam (20), Dublin (18) and Paris CDG (14).
Amsterdam and Paris CDG both offer large global networks and each has more destinations than Heathrow in Africa and Latin America, while Dublin has a strong North American niche. In addition, although Madrid, Munich and Frankfurt have fewer UK regional links than Heathrow, these hubs each serve at least one UK airport with no direct Heathrow flights.
Etihad Airways has expanded its codeshare agreement with TAP Air Portugal from 27-Oct-2019. Under the new arrangements, TAP will carry Etihad's EY code on nine additional routes from Lisbon and on one additional route from Porto (to London Gatwick).
The partnership gives each access to the other's networks, although it is heavily skewed towards routes where TAP carries the EY code and both airlines have multiple codeshare partners on several of the partnership routes. Moreover, it could have greater power if Etihad served Lisbon and if TAP served Abu Dhabi.
After the unravelling of Etihad's equity strategy, codeshare remains an important tool for the airline to enhance its access to Europe. Among the four superconnectors (the Gulf three of Emirates, Qatar Airways and Etihad plus Turkish Airlines), Etihad has the most codeshare partners and destinations in Europe.
However, Qatar Airways has added the most codeshare destinations in Europe over the past five years, while also growing its own network in Europe. Indeed, Qatar Airways appears to be going further than the others in growing through a balance between own network, codeshare, equity stakes and global alliance membership.
As flight shaming becomes more prevalent in news headlines and a dominant force in social media, airlines that do not give their attention to a long term strategy for sustainability could, at some point, find themselves at a competitive disadvantage.
But strides in sustainability, while both commendable and necessary, are slow in nature, and even as progress is being made it might not be at an adequate pace to satisfy the growing detractors of air travel.
Flight shaming is not as strong in North America as in other regions of the world, but North American airlines understand that the industry as a whole needs to communicate its environmental stewardship better.
But is there really a unified message being delivered by the airline industry?
Recorded at CAPA Low Cost Long Haul Global Summit, 10-11 Oct 2019
Low Cost Long Haul Strategy: Feeding The Network
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 Asia Aviation SummitMore
Upcoming Event
14-15
Nov
Singapore: CAPA Asia Aviation Summit
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.
CTC-CAPA Corporate Travel Gathering - AustraliaMore
Upcoming Event
25-26
Nov
Sydney: CTC-CAPA Corporate Travel Gathering - Australia
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.
Finnair announced (13-Nov-2019) plans to introduce a premium economy product to "capture demand" from both new and existing passengers. The new product will have an "elevated economy experience" with additional onboard space and upgraded dining. [more - original PR]
×
14-Nov-2019 12:39 PM
Prague Václav Havel Airport launches development plan and receives approval for terminal expansion
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]
×
14-Nov-2019 12:27 PM
SpiceJet chairman optimistic Indian aviation sector 'will regain lost momentum'
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]
Dortmund Airport exceeded (13-Nov-2019) the number of passengers handled in 2018 and broke its traffic record established in 2008. As previously reported by CAPA, the airport handled 2.3 million passengers in 2018 and expects to record 2.5 million passengers in 2019. [more - original PR - German]
Want More News Like This?
CAPA Membership provides access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find Out MoreAviation carbon emissions and climate change
Issue 51
- Pressure mounts to adopt net zero emissions by 2050 and the threat of a jet fuel tax looms – are we doing enough to mitigate the impact of aviation on the environment?
Labour unions in aviation: a force for good - or not?
Issue 50
- Contrasting union activity around the regions.