EUROCONTROL released (08-Jul-2013) its fourth 'Challenges of Growth' study, which looks ahead to the state of air transport in 2035. EUROCONTROL stated: "Growth is expected to return, with the most likely scenario showing by 2035, and despite the current economic situation, that traffic in Europe will pick up again significantly with an increase in the number of flights to 14.4 million, which is 50% higher than in 2012. This predicted growth is slower than that forecast five years ago, as well as having been delayed for several years." The organisation projects an increase in airport capacity by 2035 of 17% as opposed to the 38% growth by 2030 it projected in 2008. Given the scaling back of airport capacity increases, EUROCONTROL stated: "In the most likely scenario, 1.9 million flights in 2035 would not be accommodated – 12 % of total demand. This scenario would also see more than 20 airports operating at 80% or more of capacity for six or more hours per day, compared to just three such airports in 2012. This would drive ATFCM (air traffic flow and capacity management) delay up to around 5-6 minutes, taking it from a minor or intermittent to a permanent, major contributor of delay. To put this number in context, the current 2014 EU target for en-route ATFM delay is only 0.5 minutes per flight." [more - original PR]
EUROCONTROL predicts 50% increase in flights and capacity challenges for 2035
You may also be interested in the following articles...
Flybe: largest regional airline in Europe leads the airline capacity growth charge in winter 2016/17
The surprise departure of Flybe CEO Saad Hammad on 26-Oct-2016 "by mutual agreement" raises questions about the future strategic direction of Europe's largest regional airline. Mr Hammad joined in Aug-2013 and implemented a restructuring programme, returning Flybe to profit in FY2016 (March year end).
Capacity reduction during the restructuring has been followed by a period of accelerating growth. So much so that Flybe is Europe's fastest-growing airline group among the top 20 in Europe by seat numbers this winter, with an increase of 19%. CAPA has identified 45 new Flybe routes in calendar 2016 (compared with a late summer total of 165), on the majority of which Flybe has no airline competitor.
Despite low competition on its network, Flybe's FY2016 operating margin was one of the lowest among listed European airlines and coincided with weakening unit revenue. Pricing has softened further, not least due to uncertainties such as Brexit, just as Flybe's capacity growth has accelerated.
Until a replacement for Mr Hammad is found, Flybe's Chairman Simon Laffin will assume executive responsibility. Significant strategic change may be unlikely in the interim, but a key question for the next CEO will be whether to continue with such aggressive capacity growth in the face of falling fares.
Alitalia: "everyone has to pull in the same direction" – ongoing issues, and viability is at stake.
After Alitalia’s board approved the second phase of its business plan on 22-Dec-2016, CEO Cramer Ball stressed the importance of achieving the support of its workforce. He said, “Everyone has to pull in the same direction to make Alitalia a viable, sustainable success story and help the airline achieve its ambition of long-term growth and profitability”. Alitalia suffered strike action from some flight crew in 2016.
Full details of the plan, which has received the support of Italy's government, have not yet been made public. Alitalia's network strategy includes further long haul growth and a reworking of its short haul operation, with an emphasis on feeding long haul via Rome and Milan. Other elements of the plan include cost-cutting, reduced headcount and possible changes to joint venture agreements. Details are to be presented to Alitalia’s workforce in Jan-2017.
Also on 22-Dec-2016, Alitalia's shareholders approved short-term funding and gave management 60 days to begin negotiations with key stakeholders - lessors, suppliers and distribution companies, in addition to trade unions. Alitalia needs their support for deep cost reduction measures, in order to win the long-term financing needed to secure the airline's future.