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We employ a global team of highly-experienced analysts who deliver a wealth of commentary about the aviation and travel industry. Our analysts don’t just report the news, they look at the big picture to help you understand how the latest news, issues and trends will affect your business. CAPA’s commitment to independence and integrity means every report is filled with accurate data and actionable insights to help you stay ahead of the game.
LEVEL, the long haul low cost brand of IAG, is progressing its application for its own air operator's certificate (AOC) - more than seven years after its launch in 2017.
During that time Iberia aircraft and crew have operated its routes from Barcelona to the Americas on its behalf. From 2018 to 2020, other IAG subsidiaries also operated LEVEL-branded flights on trans Atlantic routes from Paris Orly, and even on short haul routes from Vienna.
In 1H024 LEVEL was IAG's fastest growing airline brand by ASKs, with an increase of 19.1% (versus group growth of 7.5%). Its 94.8% load factor was also the group's highest.
Over seven years LEVEL has consolidated its position as Barcelona and Spain's leading long haul LCC, and has given IAG more options on the North and South Atlantic.
As it matures with its own AOC, there is scope for it to consider new markets.
Austrian marks 15 years in Lufthansa Group: financial stability, but need for fleet modernisation
Austrian Airlines (AUA) has been part of the Lufthansa Group for 15 years.
The sale by the Austrian government in Sep-2009 was prompted by the 2008 global financial crisis, which exacerbated a period of loss-making by its national airline.
Lufthansa's ownership has given AUA a more financially secure footing, and it reported positive operating profits from 2013 until the COVID-19 crisis.
AUA's fleet has been simplified and its route network has been pruned. It recently started replacing its Boeing 777 and 767 widebody fleet (average age 25 years) with 787-9s - a modernisation programme that is due to last until 2028.
AUA's Airbus A320 family fleet has an average age of 19 years, so new narrowbodies must be next on the shopping list.
However, although the airline returned to profit in 2023, AUA's profitability remains somewhat brittle, and its parent will expect a suitable return on any further investment in new fleet.
Will Gary Kelly's retirement at Southwest fully satisfy Elliott's demand for a management shake-up?
It's a safe bet to assume that (after a 9-Sep-2024 meeting with the activist investor Elliott Management) it wasn't exactly the way Gary Kelly planned to announce his retirement from Southwest Airlines, a company he has served for nearly four decades.
But Executive Chairman Mr Kelly and CEO Robert Jordan have been under pressure since Jun-2024, when Elliott made a nearly USD2 billion investment in the airline and proceeded to demand a shake-up in Southwest's upper management - including the removal of Mr Kelly and Mr Jordan from their roles and an overhaul of its business.
At this point it's not clear whether Elliott will be satisfied with only Mr Kelly's decision to retire in the spring of 2025.
Mr Jordan's fate could remain uncertain, given that six of the company's directors are retiring in Nov-2024, and Southwest plans to consider three candidates previously proposed by Elliott.
It's a major development for a company whose low cost model has been replicated by airlines worldwide, and it signals that Southwest's future is more uncertain than its storied past.
In the run-up to the Global Airport Development (GAD World) conference taking place in Munich in Dec-2024, CAPA - Centre for Aviation will be presenting short, sharp SWOT analyses of some of the larger organisations likely to attend the event.
The focus will be on the leading investors globally in the airport sector; those that are active now and will continue to be in the future, and those that have the greatest number of assets and/or have the ambition to do so.
We begin with the 'daddy' of them all, VINCI Airports, a behemoth that 10 years ago had a handful of small French airports and a trio in Cambodia. It had just acquired ANA's 10 Portuguese airports, and all that has since grown to a portfolio of 73 in all, with no sign that the organisation is going to ease off in the acquisition stakes.
But has it bitten off more than it can chew?
Although the Qantas Group has experienced robust international capacity growth overall, it is one of multiple Asia Pacific airlines that are channelling more expansion to their low cost units than to the full service legacy brands.
As one of the region's pioneers in the multi-model approach, Qantas has long benefitted from its flexibility to allocate investment and capacity growth among its subsidiaries, depending on prevailing markets and economic conditions.
Other notable examples of Asia Pacific airlines that are placing increasing emphasis on LCC units in the post-pandemic environment include Cathay Pacific and the Japanese majors, All Nippon Airways and Japan Airlines.
During its latest earnings presentation, the Qantas Group reported slightly stronger international capacity growth for Jetstar Airways than for Qantas Airways for the six months through 30-Jun-2024 (its fiscal second half).
Data from CAPA - Centre for Aviation and OAG show that this trend has continued, with a more recent snapshot showing Jetstar with significantly higher international growth than Qantas versus both last year 2023 and 2019.
Qantas predicts a larger increase for the LCC in the current fiscal year, with Jetstar international again expanding more quickly than its full service sibling.
Meanwhile, aircraft delivery forecasts reinforce the Jetstar growth trend.
Brazil's aviation market appears to be in a state of flux.
Two of the country's largest airlines are in the throes of financial struggles, and currency headwinds remain an overhang.
Yet at the same time, the government seems poised to finalise some financial assistance for Brazilian operators broadly four years after the onset of the COVID-19 pandemic.
As GOL and Azul work to improve their financial stature, Brazil's dominant airline, LATAM Airlines Brazil, continues to build on its leading position in the domestic market.
LATAM's evolution could possibly entail a pivot to a different aircraft type, which could potentially increase competition on some of the country's domestic routes.
Air New Zealand: Further delivery delays and aircraft groundings exacerbate planning challenges
Air New Zealand is confronting a range of fleet headaches due to factors outside its control, which is complicating the carrier's planning and spurring short-term and long-term adjustments.
The airline's Boeing 787 delivery timetable has been hit by more delays, which will push back its transition to an all-787 widebody fleet. It is also prompting Air New Zealand to consider keeping its 777-300ERs longer than planned.
In the shorter term, the carrier is still coping with the grounding of several aircraft due to engine availability issues. And a cabin retrofit programme for its existing 787 fleet has been affected by minor delays due to supply chain problems.
The Caribbean region does not have many airport hubs on the same scale as the huge ones in North America, Europe and Asia Pacific.
The region being made up of disparate island groupings, with no obvious central point, a series of smaller hubs, pioneered by the likes of the now defunct British West Indies Airways (which was based in Port of Spain, Trinidad), and the dead but resurrected (just this month) LIAT, were more appropriate.
The main exception is the Copa Airlines hub at Panama, which has a broader scope and effectively connects many cities from southern Canada right down to northern Argentina.
Caribbean Airlines emerged out of BWIA's demise to become the largest Caribbean regional airline, and its CCO perceives an opportunity for Port of Spain's Piarco Airport to become the major hub for that region again.
While its ultimate scope to do so may be tempered by Copa's presence 2,000km or so to the east, the airport benefits from commercial activity in the locality that is greater than on other islands. Further, there is the development of an airport city, in addition to the stock position of tourism-related business, and all the trade that goes with that, including oil-related business.
As such, and while it will never be a 'Caribbean Singapore', it offers numerous advantages to incumbent and future airlines that rivals do not.
Bangkok and Kota Kinabalu airports – new Southeast Asian hubs? A Capital dream for Tony Fernandes
Capital A Group's CEO Tony Fernandes has built a remarkable empire of airlines in Southeast Asia. He has often spoken about owning airports too, but has done little about it.
This year he has twice identified the potential for new air hubs - firstly in Bangkok, and latterly at Kota Kinabalu in Malaysia's Sabah State, in both cases comparing them to the global role filled by Dubai.
Capital A airlines would play a key part in developing each of them.
In Bangkok's case, services are split between two airports, each with an identified role, and three if you count the U-Tapao/Rayong/Pattaya airport to the south. That doesn't bear comparison with Singapore, but a collection of Capital A airlines operating there at one location would make a difference.
Kota Kinabalu is a different prospect, with seven million passengers in 2023 and less than 10 million at its peak. 'KK', as it is known, which is already a tourist haven, might be better suited to attracting new markets as a stopover point if Mr Fernandes' vision should materialise.
The key question in all this is whether or not Mr Fernandes is going to put his money where his mouth is, and commit to investing in and operating airports as he has often indicated he is interested in doing but without actually having tied the knot with any of them.
This regular CAPA - Centre for Aviation report provides a summary of major developments in the aircraft interiors sector, supported by data from the CAPA - Centre for Aviation Aircraft Interiors Database and CAPA - Centre for Aviation News.
This edition covers Jul-2024 and Aug-2024 and features:
- US low cost carriers join Premium trend;
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Other Global LCCs going Premium;
- Latest global interior updates.