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Analysis Reports
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.
Spirit Airlines' recent Chapter 11 filing was hardly surprising. The airline hasn't been profitable in years, and debt payments were looming large.
The airline has forged a pre-arranged reorganisation with bond-holders, and also released a turnaround plan that's arguably a business model shift away from the aggressive product unbundling that served Spirit well for many years.
But none of its planned changes are new or innovative in a market dominated by larger airlines, whose products will remain superior to Spirit's.
For now, Spirit's bond-holders seem willing to give the company time to execute on its plan; however, the airline's fate is far from certain.
AviAlliance acquires three smaller UK airports from AGS – what will the future hold for all of them?
In a previous report earlier in 2024 it was suggested that the sale of AGS Airports, jointly owned by Ferrovial and Macquarie, might be delayed on account of the UK general election, which had just been called.
The outcome of that election, as expected, was a Labour government, that political party not being known to be a friend of aviation - although apart from raising flight taxes, it has not attacked the sector to the degree anticipated. The government has even suggested that it wants to see more investment in airports, one example being that at London Stansted Airport, which was announced last month.
The sale of AGS, which should be completed in 1Q2025, is now going ahead - to AviAlliance, the German operator that is owned by PSP Investments, one of numerous Canadian pension schemes to invest in the airport sector.
AviAlliance has had a year of turmoil, losing its holding in Budapest Airport, while gaining greater equity in Athens Airport.
Although the San Juan airport in Puerto Rico is performing well, its German airports, two of the four it partially owns, are impacted by a lacklustre German aviation market that is afflicted by location costs and other factors.
Could that be at least one of the reasons why AviAlliance has ventured belatedly into the UK market, one that it has mostly eschewed in the past?
This report aims to uncover the pros and cons of the Aberdeen, Glasgow and Southampton airports and what the future holds for them.
More than a decade ago, the aviation sector set a series of lofty goals around aviation sustainability: improve fuel efficiency by 1.5% per annum; cap net CO2 emissions from 2020; and reduce net CO2 emissions by 50% relative to 2005 levels by 2050. IATA member airlines doubled down on their sustainability ambitions with the Fly Net-Zero Commitment agreed to in 2021.
Progress has been slow, and the industry can only now start to point to measurable steps on sustainability and meeting its goals. The transition away from conventional aviation fuel and towards sustainable aviation fuel (SAF) is where the majority of the industry's efforts are concentrated.
What Trump's election might mean for US airports, infrastructure, ATC and their financing 2.0
Donald Trump's election to be the 47th US president will eventually, when the dust settles, raise questions about his government's stance on airport infrastructure and privatisation, and whether the national air traffic service should continue to be run by the FAA.
These topics are frequently raised in the US, where privatisation in particular is minimal. But they are not at the top of the new government's 'to do' list on 20-Jan-2025.
If, and when, the president gets round to them, he will recall that in 2018 he put forward some radical proposals to increase private investment in the sector, including major and positive changes to the privatisation programme.
Overall the results were not encouraging, airport leasing has died the death since 2020, and the government will have to focus more on public-private partnerships this time.
There are some suggestions, and they are reported here, as to how the system of tax free bonds could be allied to private investment, instead of being a negative factor in a calculation.
As for ATC, the time to at least corporatise it, if not outrightly to privatise it, has come. There is a consensus for funding reform.
But all of this is, at least on paper, dictated by the fact that no further FAA Reauthorisation Act is planned for another four years - if the new president gets serious about these issues, he will have to find a way around that.
Europe’s GDP – 5% generated by airports (ACI report): unravelling the statistics and philosophy
The well known and respected Amsterdam-based consultancy SEO Economics has recently researched a report on behalf of ACI Europe, which makes some impressive claims about the continent's airports: such as that they employ 14 million people (that's a country between the size of Belgium and the Netherlands). And that they generate 5% of the total European GDP between them.
More questionably: that such an increase in business has positive social implications such as on education, research and development, helps reduce poverty, improve gender equality, and even makes people happier.
Two examples given in the text here do lend support to the claims about education and R&D, at least.
The report is not a standalone one in that it must be seen (and was possibly solicited) in conjunction with two independent reports by European ex-politicians with gravitas, into (inter alia) the lack of investment in the EU and how to remedy it; how a concerted, joined-up transportation network policy is required urgently, and how to achieve even more decarbonisation across the entire air transportation network at the same time.
It isn't hard to see how this is ACI Europe playing its cards to ensure that airports get the best deal out of all this, because they - and the airlines - have been on the rack for years now, as sacrificial lambs to the God of the Environment.
The trouble is that the whole ball game has changed in a matter of a day with the election again of Donald Trump as US president. Like it or not, the airports business is now, as the other presidential candidate often said, 'unburdened by what has gone before' and must prepare itself for its own version of The Great Reset.
The Brazilian operator Azul has quickly manoeuvred a balance sheet restructuring that should set the stage for the company to become an even fiercer competitor in the Latin American aviation market.
Azul has accomplished a feat that many of its largest competitors could not achieve - overhauling its debt structure without formally entering Chapter 11 bankruptcy protection.
Now Azul can focus squarely on playing to its strengths, which include a unique fleet strategy that results in limited competition on the majority of its routes, and diversified business streams to maximise revenue generation.
On 27-Oct-2024 Iberia restored its service from Madrid to Tokyo Narita, which it had ceased at the onset of the COVID-19 pandemic in Mar-2020.
Iberia is the sole operator on the route, the longest in its network and its only one in Asia Pacific.
The success of Iberia's Doha service, launched in Dec-2023 and offering onward connections with its oneworld partner Qatar Airways, has provided a window on the strength of demand for Spain-Asia Pacific air travel.
Iberia focuses its long haul network on Latin America, and this is unlikely to diminish. However, Asia Pacific nonstops are underserved from Spain, and Iberia is attracted by the significant potential for expanding capacity to the region.
The nature and purpose of the Western Sydney airport (WSI) that is now under construction at Badgerys Creek far to the west of the city-region has changed.
Once regarded as a necessary reliever airport for the Kingsford Smith (SYD) facility that is located fairly close to downtown, and to handle mainly budget airlines when it opens in 2026, it is now being touted as potentially the busiest airport in the country by 2060.
Full service and alliance member airlines are already demonstrating their interest in operating there.
But WSI still has a few hoops to jump through as the opening date nears, including finalising the surface transport connections that have got caught up in a cost overrun for an entire Metro system, which is being expanded rapidly.
Probably the biggest issue it has got to get to grips with is whether it is still only to be a reliever for SYD, whether it should still focus on low cost, or whether it has the ability and the support to knock SYD airport off its perch.
And that raises the question of who will ultimately operate and finance it.
It would be unusual in Australia if that responsibility remained with the government.
Management at the Mexican ultra-low cost carrier Volaris recently took great effort to deliver a clear message to analysts and investors - "we are different from our US counterparts".
With Frontier Airlines and Spirit Airlines languishing during the past year, driven in part by changing market dynamics, Volaris believes that the elements that have propelled the ultra-low cost sector in Mexico for more than a decade remain intact.
A major driving force for Mexican ULCCs has, and continues to be, immense opportunity to switch bus passengers to air travel. And with a restoration of Mexico's safety rating by the US, capacity rationalisation has emerged in Mexico's domestic market, and has created new opportunities for Volaris in the transborder market.
Another way Volaris has distinguished itself from its peers in the US is the way it has faced headwinds created by issues stemming from the geared turbofan engines powering its Airbus A320neo fleet.
A sizeable portion of Volaris' fleet will remain grounded throughout the remainder of the year, yet Volaris posted a profit in 3Q2024, and expects its revenue for 2024 to inch close to its performance in 2023.
Russian government authorises sale of Fraport’s 25% stake in operator of Saint Petersburg airport
Fraport's management of Saint Petersburg Pulkovo Airport, where it was a major part of the consortium that took it under concession with a large stake in 2010, has taken several twists and turns since then, with a difficult acquisition at first proving to be a high performer.
Shortly after the Russian invasion of Ukraine in Feb-2022, Fraport withdrew its hands-on management.
Later a new company was set up by the Russian government, to which Fraport's shares were transferred. Now authorisation has been given for Fraport's stake to be sold to an unknown company.
What was always a difficult transaction became a surprisingly successful one, and then turned into a nightmare, adding to Fraport's woes in respect of abandoned and to-be-abandoned concessions in China and India.
But Fraport is less likely to be hurt by this about-turn in events than is the airport itself.