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United ends 2011 as world's largest airline as Emirates encroaches on the number three spot

The single operating certificate that was granted to United-Continental last month will see the combined entity overtake Delta Air Lines as the world's largest airline. American Airlines has dropped to third in the ranking, based on available seat kilometers, and through capacity cuts associated with its bankruptcy may fall to fourth place next year, allowing Emirates to swoop in as third largest. If American and US Airways merge they would likely fall just under United Airlines but could catch up in subsequent years.

Emirates has moved into fourth place (by ASKs). Five US carriers feature on the top ten, while no mainland Chinese carrier is yet in the top flight although Hong Kong-based Cathay Pacific is in at number 10. China Southern (12th) and Air China (14th) are knocking at the door and could enter the Top 10 in 2012, if cutbacks are enacted by Europe's majors, including British Airways.

Other fast movers in 2011 have included Qatar Airways (20th) and Turkish Airways (23rd) and both are expected to keep climbing the rankings next year, likely ending the year well inside the Top 20, possibly at the expense of KLM and Air Canada.

Southwest (8th) and Ryanair (22nd) are the only two LCCs on the global ASK ranking (see separate LCC ranking).

World's biggest airlines by Seats and ASKs per week: Dec-2011*

  Dec-11 Dec-11 Dec-2011
ASKs Rank
Airline Seats
per Week
ASKs
per Week
United Airlines 3,413,491 7,665,515,192

1

Delta Air Lines 3,695,967 6,581,811,561

2

American Airlines 2,635,886 5,170,662,578 3
Emirates 923,900 4,217,113,594 4
Lufthansa 1,777,916 3,533,501,344 5
Air France 1,368,058 3,141,969,384 6
British Airways 971,338 3,052,413,092 7
Southwest Airlines 2,885,994 3,052,412,207 8
US Airways 2,023,024 2,601,232,405 9
Cathay Pacific Airways 572,675 2,523,178,383 10
China Southern Airlines 1,776,508 2,466,987,278 11
Singapore Airlines 468,655 2,287,649,767 12
Air China 1,143,859 2,095,274,291 13
Qantas Airways 775,275 2,019,158,660 14
Air Canada 839,535 1,883,710,525 15
China Eastern Airlines 1,428,628 1,877,730,572 16
Korean Air Lines 661,093 1,851,529,373 17
KLM 562,488 1,810,865,254 18
All Nippon Airways 1,450,406 1,661,498,854 19
Qatar Airways 450,542 1,657,121,443 20
Thai Airways 518,285 1,601,256,591 21
Ryanair 1,417,878 1,590,511,473 22
Turkish Airlines 870,525 1,565,599,051 23
Japan Airlines 936,509 1,538,978,651 24
TAM 966,389 1,431,062,886 25
Total for top 25 airlines 34,534,824 68,878,744,410  

Longer flights drive growth

The world's airlines are scheduling 3.2% more flights this month, translating into 5.3% more seats and 7.3% more ASKs than in Dec-2010. With ASKs growing faster than flights and seats, airlines are opening longer flights. Growth in this area is spurred by network carriers China Southern, Emirates, Etihad, Qatar and Turkish Airlines.

China Southern

China Southern this year has taken delivery of A380s and is deploying them on domestic routes before international flights, which it has yet to announce the details of but are expected to be sent to Europe and North America. Large growth at the carrier is occurring to Australia and New Zealand where China Southern hopes to become a new link between Australia and Europe. The carrier is planning a fourfold increase in flights to the region over the next three years, increasing its services to 110 flights a week – 16 a day.

Read more (premium access): China Southern Airlines adds 34 routes this winter and expands on its long-haul strategy

Emirates

Emirates had envisioned large growth in the US early last decade but put the plan on hold after the Sep-2001 terrorist attacks. The country will see a larger Emirates presence over the next few years, with the carrier starting a daily route to Seattle early next year. (A flight to Dallas will also be started, but one of its two daily Houston services will be withdrawn.) Chicago is a likely future destination. Emirates last month ordered 50 B777-300ERs to fuel medium-term growth this decade.

Read more (open access):

Etihad

This past third quarter was Etihad's best as the carrier continues to grow, seeing strong demand on ultra-long-haul flights, and nears its first annual profit.

Read more (open access): Etihad Airways sees best ever third quarter as first annual profit nears

Qatar

Qatar is adding long-haul routes but is focusing strongly on South Asia, and India in particular, as it looks to catch up from its position as the fifth largest carrier between the Middle East and India.

Read more (premium access): More Indian sub-Continent destinations on the cards for Qatar Airways

Turkish Airlines

While the big three Gulf network carriers primarily use widebody aircraft, Turkish Airlines is embarking on a novel strategy of deploying B737-900ERs on medium-haul thin routes. Whereas other carriers serve the route a few times a week with large aircraft, Turkish is pursuing daily frequencies with less capacity. It will first start this strategy in Africa but could expand it to Central Asia and India.

While some Middle East carriers deploy A319s and A320s, Turkish's B737-900ERs will have further range and can carry more passengers, with CEO Temel Kotil telling CAPA the cost is closer to that of a widebody.

Read more (open access): Small capacity with regular frequency key for Turkish Airlines strategy to Africa, and perhaps India

Worldwide capacity: Dec-2010 vs Dec-2011*

  Dec-2010 Dec-2011 % chg
Grand Total Flights per Week 558,317 576,410 3.2%
Grand Total Seats per Week 69,522,777 73,209,997 5.3%
Grand Total ASKs per Week 118,079,692,352 126,646,732,454 7.3%

Growth at alliances, LCCs and unaligned carriers

The world's LCCs have again grown their share of global aviation to 22.5% of total seats. Of the global alliances, only SkyTeam has grown its share this month, to 16.2% of seats.

LCC vs Unaligned vs Alliances capacity and shares (%) of global aviation: Dec-2010 vs Dec-2011*

 Alliance    Dec-2010  Dec-2011  % Change % of Totals  
  Dec-10 Dec-11 Variance
oneworld Flights per Week 55,375 56,361 1.8% 9.9% 9.8% -0.1%
  Seats per Week 7,735,087 7,912,797 2.3% 11.1% 10.8% -0.3%
  ASKs per Week 17,275,433,876 18,004,223,903 4.2% 14.6% 14.2% -0.4%
SkyTeam Alliance Flights per Week 80,302 89,466 11.4% 14.4% 15.5% 1.1%
  Seats per Week 10,081,057 11,869,613 17.7% 14.5% 16.2% 1.7%
  ASKs per Week 19,029,196,189 22,455,147,563 18.0% 16.1% 17.7% 1.6%
Star Alliance Flights per Week 141,037 141,383 0.2% 25.3% 24.5% -0.7%
  Seats per Week 16,811,165 17,280,855 2.8% 24.2% 23.6% -0.6%
  ASKs per Week 30,776,376,824 32,833,410,837 6.7% 26.1% 25.9% -0.1%
Low Cost Carriers Flights per Week 105,602 112,458 6.5% 18.9% 19.5% 0.6%
  Seats per Week 15,424,186 16,508,117 7.0% 22.2% 22.5% 0.4%
  ASKs per Week 18,226,468,326 19,848,579,183 8.9% 15.4% 15.7% 0.2%
Un-Aligned Carriers Flights per Week 176,001 176,742 0.4% 31.5% 30.7% -0.9%
  Seats per Week 19,471,282 19,638,615 0.9% 28.0% 26.8% -1.2%
  ASKs per Week 32,772,217,138 33,505,370,968 2.2% 27.8% 26.5% -1.3%

Largest low-cost carriers

Volaris

The largest mover in the top 25 LCCs based on ASKs was Volaris, the Mexican LCC that moved up six ranking positions and had the highest overall growth rate, 58%, of all of the top 25 LCCs. Volaris has benefited from Mexicana's 2010 exit and started rapidly increasing capacity in late 1Q2011. Volaris has now doubled its US presence while maintaining healthy load factors. Volaris is expanding out of Mexico City, a point it initially shunned, although smaller Mexican carrier InterJet has seen the largest overall growth.

Read more about the dynamic of the growing Mexican market: A year after Mexicana's exit, Aeromexico, Mexican LCCs and US carriers are main beneficiaries

Air Berlin and Indigo

Also making big moves in rankings were Air Berlin and Indigo, who each moved up two rankings. Air Berlin's growth, however, has not been followed with profitability. Indigo is the largest carrier in India, which has the second-highest domestic growth rate after Chile, and is currently the only profitable one in the market.

Read more (premium access):

9.3% overall growth

Ryanair and Vueling were the only LCCs in the top 25 to have decreased capacity. Ryanair is grounding 80 aircraft this winter to preserve yields in the face of high fuel prices. Read more (open access): Ryanair raises full-year profit target by 10% following strong 1H profit and yield result

While Air Berlin and Indigo saw jumps in their rankings, other carriers saw impressive growth, including jetBlue, Norwegian and Virgin America. The distances between themselves and larger carriers in the rankings are often large enough that even substantial growth rates are not enough to close the gap. Spirit Airlines fell four places in the ranking, but its growth rate, 10.5%, was still above the 9.3% average.

Outlook

Southwest will maintain its position as the world's largest LCC since its ASKs are not only nearly double that of the number two carrier, jetBlue, but its acquisition of AirTran (#7) will further set it apart from other LCCs. Southwest aims to have a single operating certificate with AirTran in Mar-2012.

Ryanair may continue to ground aircraft during off-peak times if fuel prices do not improve, but is unlikely to drop below jetBlue.

EasyJet (#4) and Gol (#5) each plan capacity growth around 4% for 2012. Gol's slightly longer flight sectors may see it edge ahead of easyJet. While Gol has acquired fellow Brazilian carrier Webjet, Webjet will remain a subsidiary not integrated with Gol, limiting potential for Gol to shoot ahead on its own.

Read more (open access): Gol outlook brightens as Brazilian yields start to show signs of improvement

Jetstar (#9) will likely overtake WestJet (#8) as the carrier continues to add capacity, including on long-haul flights. Virgin Australia (#10) will soon exit this list as it completes its transition to a full-service carrier, allowing AirAsia to assume the rank of tenth largest LCC in the world and further move its way up on the list.

Top 25 LCCs worldwide by capacity (ASKs/week): Dec-2010 vs Dec-2011*

 Airline  Dec-2010  Dec-2011  % change Global rank Ranking
Dec-10 Dec-11 Varionce
Southwest Airlines 3,047,074,668 3,052,412,207 0.2% 1 1 -
Ryanair 1,612,783,117 1,590,511,473 -1.4% 2 2 -
JetBlue Airways 1,003,196,733 1,189,411,594 18.6% 3 3 -
EasyJet 1,002,515,198 1,054,868,687 5.2% 4 4 -
Gol 895,777,368 988,052,824 10.3% 5 5 -
Air Berlin 538,800,872 708,889,446 31.6% 9 6 +3
AirTran Airways 703,158,940 704,027,357 0.1% 6 7 -1
WestJet 637,404,815 677,374,415 6.3% 7 8 -1
Jetstar Airways 576,959,533 657,956,959 14.0% 8 9 -1
Virgin Australia 538,009,628 563,988,380 4.8% 10 10 -
AirAsia Bhd 477,817,002 527,079,150 10.3% 11 11 -
Lion Airlines 466,152,415 508,429,885 9.1% 12 12 -
Condor 358,259,359 407,317,917 13.7% 13 13 -
Norwegian Air Shuttle 320,862,085 385,477,288 20.1% 15 14 +1
Indigo 261,526,575 363,580,357 39.0% 18 15 +3
Frontier Airlines 321,449,669 363,350,108 13.0% 14 16 -2
Virgin America 259,837,398 350,169,261 34.8% 19 17 +2
Thomsonfly 302,152,344 320,404,300 6.0% 16 18 -2
Volaris 202,061,772 312,728,888 54.8% 25 19 +6
Wizz Air 246,384,322 304,503,785 23.6% 20 20 -
Spirit Airlines 270,487,326 298,792,471 10.5% 17 21 -4
Cebu Pacific 215,718,189 265,408,429 23.0% 23 22 +1
SpiceJet 216,228,275 262,814,025 21.5% 22 23 -1
Air Arabia 218,585,518 247,294,792 13.1% 21 24 -3
Vueling Airlines 212,666,505 181,777,722 -14.5% 24 25 -1
GRAND TOTAL 14,905,869,625 16,286,621,721 9.3%