Analysis Reports

The trial to determine whether the partnership between American Airlines and JetBlue Airways is anti-competitive or not is now under way, and few are venturing to predict the outcome. 

Under the Administration of US President Joseph Biden, the Department of Justice (DOJ) has been aggressive in its pursuit – to block what it deems as anti-competitive behaviour in many industries. 

The challenge to the Northeastern Alliance (NEA) occurs as the DOJ weighs the merits of JetBlue’s proposed acquisition of, and merger with, Spirit Airlines.

Obviously, if the DOJ prevails in dismantling the NEA it could be detrimental for both partners.

But the stakes are even higher for JetBlue, as it risks losing a key partner and the rejection of its merger with Spirit.

Long before individual Chinese mainland airports began their rapid growth in the late 1990s, Hong Kong International (HKIA) was like a beacon for the entire region as a gateway to China and indeed, to much of North and Southeast Asia.

But the prolonged pandemic in China and Hong Kong, and the vain attempts there to achieve ‘zero COVID’ by locking people up for months on end, have dealt the airport and Cathay Pacific a body blow such that neither appears to have the wherewithal to bounce back from the canvas, according to IATA’s Director General Willie Walsh.

This report adds some statistical meat to Mr Walsh’s concerns and concludes that he is right.

Air travel in Australia and New Zealand has been recovering well in 2022. Domestic capacity has returned particularly strongly, and while the international rebound started later, it has followed a sustained growth trend. This is an encouraging picture after the volatility and false starts of the past few years.

The following presentation was made at the CAPA Australasia-Pacific Aviation Summit in Adelaide on 13-Sep-2022 by Adrian Schofield, who is Aviation Week’s senior air transport editor for Asia-Pacific and also a CAPA analyst.

Charts and data help illustrate the extent to which demand has recovered in Australasia, and what this has meant for international and domestic market dynamics and aircraft fleets.

While the market revival is very promising for airlines, they still face some challenges. The most immediate is ensuring that a recent spike in service disruptions does not return to derail progress.

In the West Nordic region in the Atlantic Ocean (Greenland, Iceland and the Faroe Islands) Iceland has become the go-to destination for many people over the last 10 years. The other two countries are coming up on the rails in the way of attracting tourists but still have some way to go.

Under a new initiative Icelandair and Air Greenland are better coordinating their schedules by way of Keflavik Airport, which becomes the de facto international gateway for both countries. It should make all manner of travel easier between Iceland and Greenland and beyond, although not having flights directly into the downtown Reykjavik Airport may have a downside.

But the bigger issue here is whether this is a one-off decision or whether it will lead to wider airline and tourism cooperation within what is a definable region – one that offers visitors experiences they would be hard pressed to find anywhere else.

This regular CAPA report provides a summary of recent aviation sustainability and environment news. This latest issue features:

Air Canada to acquire 30 ES-30 electric aircraft

Virgin Australia Group CEO: 'foundational investments' needed for SAF journey to commence

Fiji requires aviation industry to collaborate on sustainability: Fiji Airways executive manager

Air New Zealand to receive first shipment of SAF into New Zealand

Rockton confirms LoI for up to 40 Heart Aerospace ES-30 aircraft

ACSA, the state airport operator in South Africa, is the subject of an unsolicited offer from investors for a stake. That stake would only be in six regional airports, according to the entrepreneur involved.

The South African air transport industry has seen better days.

Both ACSA and South African Airways (SAA) were heavily impacted by the pandemic and SAA, which has recently been part-privatised, had long since become a loss maker.

Even so, there is a possibility that others might be prepared to make a counter bid.

This is part two of a two-part report.  

The fanfare surrounding a new pact between United Airlines and Emirates Airline is understandable.

Seven years ago United, along with American Airlines and Delta Air Lines, launched a campaign to convince the US government that Emirates, along with Etihad Airways and Qatar Airways, had received USD42 billion in illegal subsidies. 

Eventually, both the governments and the airlines involved in the dispute reached agreements that appeased all the parties.

But relations between the three largest US global airlines and the major Gulf carriers remained frigid – until the COVID-19 pandemic forced some of those operators to put their grudges aside. 

ACSA, the state airport operator in South Africa, is the subject of an unsolicited offer from investors for a stake. That stake would only be in six regional airports, according to the entrepreneur involved.

The South African air transport industry has seen better days.

Both ACSA and South African Airways (SAA) were heavily impacted by the pandemic and SAA, which has recently been part-privatised, had long since become a loss-maker.

Even so, there is a possibility that others might be prepared to make a counter bid.

This is part one of a two-part report.

Earlier this month the Israeli cabinet ratified a bilateral aviation agreement with Turkey. The deal, which the two nations signed in Jul-2022, should lead to a resumption of services to Turkey operated by airlines based in Israel.

Israeli airlines last operated commercial flights to Turkey in 2007. However, Turkey is already Israel's biggest destination country, based on continued service by airlines from Turkey.

Israel has a relatively small number of direct long haul connections and routes to Western European hubs and, more recently, UAE hubs, provide additional connectivity. The addition of Istanbul as a destination for Israeli – in addition to Turkish – operators will increase connectivity and competition.

Meanwhile, the seat share of Israel's national airline El Al is in long term decline, whereas LCC seat share continues to grow and has been boosted since the COVID-19 crisis.

This reflects the dominance of short/medium haul markets to/from Israel.

During the COVID-19 pandemic many new partnerships emerged in the worldwide aviation sector as airlines worked either to stay afloat or to ensure that they retained a certain level of competitiveness once the worldwide health crisis became more manageable. 

But in the case of Air Canada and United Airlines, they’ve decided to revive a deeper US transborder relationship the operators attempted to establish in 2011.

Now, as a new state of normality returns to the aviation industry, Air Canada and United are working to expand their transborder presence, and forge new levels of scheduling efficiency that should ultimately drive growth in revenue.