Avianca continues to shake up Latin America's aviation scene with creation of 'Abra'
If there were any doubts that Avianca had bold ambitions after its exit from bankruptcy, they have been put to rest.
The company has made its most enterprising move yet, after reaching an agreement with GOL to create a powerhouse Latin American aviation group: Abra.
Abra will comprise the principal shareholders of Colombia's Avianca and the controlling shareholder of Brazil's GOL. It will own a non-controlling 100% stake of Viva, and convertible debt representing a minority interest investment in Chile's Sky Airline.
Avianca and GOL aim to close the deal in the second half of this year, and if they are successful in their efforts Abra would have leading positions in Brazil and Colombia.
Now the questions are how will competitors react, and will further alliances – and even consolidation – follow.
TO READ ON, VISIT: Avianca continues to shake up Latin America's aviation scene with creation of 'Abra'
Japan's airlines plot path to profitability – part 1: ANA recovery gathers steam
While Japan has moved more slowly than many other Asia-Pacific countries to reopen its borders, it is now taking important steps to ease border restrictions. The expected demand boost means Japan’s major airlines can see a path back to profitability for the current fiscal year.
Foreign travellers have generally been barred from entering Japan since the early days of the coronavirus pandemic. This prohibition was removed in early Apr-2022, but effectively only business travellers and students could enter, whereas foreign leisure travellers were still excluded.
Now the Japanese government has signalled that it will allow vaccinated tourists to enter without quarantine from Jun-2022. This will obviously be significant for Japan Airlines (JAL) and All Nippon Airways (ANA), as well as the country’s tourist industry. Domestic capacity has already rebounded well, and now the airlines are beginning to ramp up their international services again as they prepare for overseas demand to return.
In this first part of this feature we consider market trends and ANA's recovery.
TO READ ON, VISIT: Japan's airlines plot path to profitability – part 1: ANA recovery gathers steam
Japan’s airlines plot path to profitability – part 2: JAL’s demand growth may spur quick rebound
While Japan has moved more slowly than many other Asia-Pacific countries to reopen its borders, it is now taking important steps to ease border restrictions. The expected demand boost means Japan’s major airlines can see a path back to profitability for the current fiscal year.
Foreign travellers have generally been barred from entering Japan since the early days of the coronavirus pandemic. This prohibition was removed in early Apr-2022, but effectively only business travellers and students could enter, whereas foreign leisure travellers were still excluded.
Now the Japanese government has signalled it will soon start allowing tourists to enter. This could start with a trial programme for organised tour groups this month, and the Prime Minister has said the government intends to allow a broader reopening for vaccinated tourists from Jun-2022. Details of these steps are yet to be revealed, however.
In this second part of this feature we consider the outlook for Japan Airlines (JAL) as it seeks to bounce back to net profit in the fiscal year as international markets open and its network is rebuilt.
TO READ ON, VISIT: Japan’s airlines plot path to profitability – part 2: JAL’s demand growth may spur quick rebound
JetBlue gets aggressive in its pursuit of Spirit Airlines
Shareholders of the US ultra-low cost carrier (ULCC) Spirit will soon vote on endorsing a recommendation from the company’s board of directors to merge with fellow ULCC Frontier, despite JetBlue’s offer of a higher price per share.
But JetBlue has now launched a hostile takeover bid for Spirit, claiming Spirit's board did not engage constructively on JetBlue's bid for Spirit.
It is the latest twist in the fate of Spirit, which remains unknown until its shareholders weigh in.
TO READ ON, VISIT: JetBlue gets aggressive in its pursuit of Spirit Airlines
Europe aviation recovery hits another high, but prices start to soften
Europe's capacity recovery from the COVID-19 pandemic continues this week, reaching a new high at almost 85% of the seats flown in the equivalent week of 2019. At the same time, the most recent monthly data on price inflation for passenger air travel in the EU-27 and the UK show that price growth has slowed in 2022.
Europe's seat shortfall of -15.5% versus 2019 levels in week commencing 16-May-2022 is only slightly better than last week, but takes it to its best performance on this measure since before the crisis.
However, Europe remains fifth in the regional ranking, above only Asia Pacific, where capacity is down by -29.3%. Middle East capacity is down by -11.7%, while North America capacity is down by -10.7%, Latin America by -5.1%, and Africa – at the top of the ranking for the first time – capacity is down by -4.6%.
The capacity recovery is projected by current schedules to rise to 91% of 2019 levels in 3Q2022. However, uncertainties surrounding future virus developments and geopolitical events remain. The continued capacity recovery may require further price stimulation.
TO READ ON, VISIT: Europe aviation recovery hits another high, but prices start to soften
Rex to add more 737s this year, upgrade FFP, lounges. Delta interline 'a whole new ball game'
The Australian airline Rex is preparing to take some important steps in its efforts to expand its services and compete more directly with its larger rivals in Australia’s domestic market.
Rex has historically been a regional turboprop operator, but it began to diversify last year (2021) by introducing Boeing 737s on major domestic trunk routes. The airline currently operates six Boeing 737s and has plans to grow the jet fleet and network in 2022.
Rex also intends to: sign an interline deal with Delta Air Lines; upgrade or add more passenger lounges; and launch a new loyalty programme. These are intended to help overcome differences in services and customer offerings between Rex and full service domestic competitors such as Qantas and Virgin Australia.
Competition in the Australian domestic network is heating up, with Qantas the incumbent, Virgin Australia growing its fleet close to pre-pandemic levels, Rex also expanding, and newcomer Bonza planning to enter the fray. It will no doubt be a tough market – particularly on east coast trunk routes.
TO READ ON, VISIT: Rex to add more 737s this year, upgrade FFP, lounges. Delta interline 'a whole new ball game'
Iceland’s Isavia expects almost 100% of 2019 traffic later in 2022, but it's not all plain sailing
Many European countries are experiencing a swift return of passengers to the routes their airlines are flying as the coronavirus pandemic continues to abate and is no longer the first item on the television evening news – if it features at all.
That is the case in Iceland, which was locked down and isolated internationally for long periods of time in 2020 and 2021 but where, according to the airports' operator Isavia, capacity, passenger numbers and tourism will all return to 2019 levels, or close to those levels, by the third quarter of the year.
But this is 2022, not 2019, and no assumptions should be made as to what passes for normal.
There are potentially circumstances, both operational ones and sociological ones, which could yet impede that resumption of normal service.
TO READ ON, VISIT: Iceland’s Isavia expects almost 100% of 2019 traffic later in 2022, but it's not all plain sailing
VINCI chosen as Cape Verde airports concessionaire - beginning of the end, or end of the beginning?
The 10-island archipelago of Cape Verde, in the Atlantic Ocean west of Senegal, is an unusual place. It is one of the most stable countries in Africa and has managed to attract the sort of tourism that most other countries on the continent crave but could never achieve.
Its own air transport business has been in some disarray, however, and added to this is an agreement with Loftleiðir Icelandic (Icelandair Group) not being able to get fully to grips with the national carrier's problems.
Now another foreign organisation, VINCI, has won the contract to operate the (seven) airports, the government having sought a workable privatisation solution for them for some years.
Part one of this two part feature looks at the background and terms of the new deal.
TO READ ON, VISIT: VINCI chosen as Cape Verde airports concessionaire - beginning of the end, or end of the beginning?
Cape Verde’s airports: hub, full service, mixed and charter characteristics challenge VINCI
The 10-island archipelago of Cape Verde, in the Atlantic Ocean west of Senegal, is an unusual place. It is one of the most stable countries in Africa and has managed to attract the sort of tourism that most other countries on the continent crave but could never achieve.
Its own air transport business has been in some disarray, however, and added to this is an agreement with Loftleiðir Icelandic (Icelandair Group) not being able to get fully to grips with the national carrier's problems.
Now another foreign organisation, VINCI, has won the contract to operate the (seven) airports, the government having sought a workable privatisation solution for them for some years.
Part one of this feature looked at the background and terms of the new deal; in the concluding part of this two-part feature a closer look at Cape Verde's four main airports highlights some of the challenges for VINCI.
TO READ ON, VISIT: Cape Verde’s airports: hub, full service, mixed and charter characteristics challenge VINCI
Hyderabad airport concession agreement extended for further 30 years – seniority counts
The Indian airport concession programme, which was directed immediately at the busiest in the country, began in the mid-2000s and was beset by many difficulties. Subsequent governments were reluctant to upset the apple cart again and the procedure was suspended for a decade until a number of smaller airports were privatised over the past few years.
Now the government’s aviation ministry has extended the concession period for the first of the big city airports, at Hyderabad, for a further 30 years. Usually such extensions are for 10 or 20 years, so this action indicates that the government is more than content with the existing consortium.
Moreover, this is the second time there has been such an extension in the past two years.
The action sends out a message to aggressive ‘new kids on the block’, queuing up for an anticipated eruption in Indian airport deals, that seniority can count, and that their proposals need to come up to the mark.
TO READ ON, VISIT: Hyderabad airport concession agreement extended for further 30 years – seniority counts
SPECIAL REPORTS: Aviation Sustainability and the Environment
This regular weekly CAPA report features a summary of recent aviation sustainability and environment news, selected from the 300+ news alerts published daily by CAPA.
This week’s issue includes: IATA: Global solution required to address 'huge gap' between sustainability goals and reality; Xiamen Airlines realises 45% fuel saving from participation in SkyTeam sustainable flight challenge; Newcastle International Airport contributes to reforestation project as part of zero emissions drive; Bremen Airport Hans Koschnick commences sustainable aviation fuel supply; UK DfT announces plans for transatlantic SAF demonstrator flight, support for UK SAF industry.