Industry Intelligence – catch up on CAPA’s exclusive market insights

3 October, 2022

Each week, CAPA – Centre for Aviation produces informative, thought provoking and detailed market analysis of the aviation industry. With supporting data included in every analysis, CAPA provides unrivalled and unparalleled intelligence. Here’s some of the reports published over the past week.

Mapping Australasia’s rocky path to recovery – CAPA Australia Pacific Aviation Summit

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.

TO READ ON, VISIT: Mapping Australasia’s rocky path to recovery – CAPA Australia Pacific Aviation Summit

Europe aviation: schedules are firmer, but capacity recovery slows

CAPA analysis of quarterly capacity projections shows schedules for Europe are much firmer than at any other time in the COVID-19 era. Moreover, projections for 4Q2022 are higher than one month ago.

No previous COVID-era quarter has enjoyed an increase to capacity projections from a month out to the quarter's start. The pattern had been a consistent one of cuts.

Europe's total seat capacity is at 85.9% in the week commencing 26-Sep-2022, a shortfall of 14.1% against the equivalent week 2019. Europe remains fifth in the regional ranking, above Asia Pacific, where capacity is down by 22.6% versus 2019, but below the Middle East, where capacity is down by 12.0%. Africa capacity is down by 8.5%, North America by 7.1%, and Latin America is down by 4.5%.

Europe's capacity as a percentage of 2019 levels has hardly shifted since late May-2022. In spite of positive developments in 4Q2022, it could end up similar to the 87% achieved in 3Q2022.

After 74% in 1Q and 84% in 2Q, Europe's capacity recovery has lost momentum through 2022.

TO READ ON, VISIT: Europe aviation: schedules are firmer, but capacity recovery slows

Fate of American Airlines’ and JetBlue’s NEA uncertain as trial gets under way

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.

TO READ ON, VISIT: Fate of American Airlines’ and JetBlue’s NEA uncertain as trial gets under way

Australian aviation: Qantas and Rex look to expand their regional capabilities

Australian airlines are looking to new aircraft types and a flurry of consolidation moves to broaden the scope of their operations in the country’s vital regional aviation sector.

Qantas is planning to introduce Airbus A220s on its regional network, and the airline is also seeking approval to complete its acquisition of Alliance Aviation.

Meanwhile, Regional Express Holdings (Rex) is considering how its takeover of National Jet Express could enhance its own fleet strategy.

The fleet and acquisition moves will further shake up what has been a very dynamic market sector for Australia’s airline groups.

TO READ ON, VISIT: Australian aviation: Qantas and Rex look to expand their regional capabilities

Hong Kong ‘loses its status as an international hub’ as a reaction to China’s zero-COVID policy

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.

TO READ ON, VISIT: Hong Kong ‘loses its status as an international hub’ as a reaction to China’s zero-COVID policy

South Africa rejects offer for ACSA stake: part two – president ‘values’ public-private partnerships

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. 

TO READ ON, VISIT: South Africa rejects offer for ACSA stake: part two – president ‘values’ public-private partnerships

Qatar gears up for FIFA World Cup by reopening old Doha airport

The success or otherwise of a global sporting event such as the Olympic Games and the football World Cup can often hang as much on the ability of a country’s infrastructure to handle the demand placed on it as much as what happens on the field of play.

If a country gets it right it will go unnoticed. If it gets it wrong it most certainly will be noticed.

Qatar began to enhance its main Hamad International Airport, which only opened in 2014, in time for the World Cup, and the necessary works will be completed accordingly. The country benefits from having all the activity concentrated on one gateway airport – unlike Brazil, for example, which had to allocate different airports to different countries.

But taking a belt and braces approach, it will also reopen the previous gateway, Doha International; at least, for the duration of the event.

TO READ ON, VISIT: Qatar gears up for FIFA World Cup by reopening old Doha airport

TAV Airports bids to operate Lagos Airport: part one – legal issues cloud the prospect

Over several years now attempts by the Nigerian government to privatise the country’s four main airports by concession have been consistently and successfully resisted by a range of pressure groups.

The latest attempt, which began a year ago, now sees Turkey’s TAV Airports enter the fray, leading a consortium for the Lagos Murtala Muhammed International Airport (MMIA), the country’s busiest, and one where there is already a degree of privatisation, as one of its terminals is privately managed.

The problem is that India’s GMR has also launched a bid, and that company, like TAV, is part-owned by Groupe ADP. That has given a platform for the anti-privatisation elements and there are strong words being bandied about.

On paper, Lagos wouldn’t necessarily attract many investors.  But they will take a macroeconomic view – population, a growing middle class, and a solid industrial base focused on Nigeria’s oil exports.

This is part one of a two-part report.

TO READ ON, VISIT: TAV Airports bids to operate Lagos Airport: part one – legal issues cloud the prospect

SPECIAL REPORT: Aviation Sustainability and the Environment

This regular CAPA report provides a summary of recent aviation sustainability and environment news. This latest issue features: IATA: Traditional fuel suppliers must turn their attention to SAFs; WestJet operates second SAF-powered flight; Air Canada selects CHOOOSE as new carbon offset programme provider; Curacao Hato International Airport to focus on cargo and electric aviation in new business strategy; Cebu Pacific operates first SAF powered commercial flight.

TO READ ON, VISIT: SPECIAL REPORT: Aviation Sustainability and the Environment