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

10 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.

Key Asia-Pacific markets finally relax restrictions: part one – Japan; part two – Hong Kong & Taiwan

Within a period of just a few days in late Sept-2022 Hong Kong, Japan and Taiwan announced significant easing of pandemic-related entry requirements. This is a very noteworthy development, as these three have been among the last major Asia-Pacific markets to retain burdensome international travel restrictions.

The Japanese government stated that it would end a range of rules that have been suppressing international travel to Japan.

The Hong Kong government has taken its biggest step yet in easing travel restrictions, ending mandatory hotel quarantine on arrival.

In Taiwan, entry restrictions have been eased and the government has signalled that quarantine rules will be removed within a few weeks.

TO READ ON, VISIT: Key Asia-Pacific markets finally relax restrictions: part one – Japan; part two – Hong Kong & Taiwan

Virgin Atlantic Airways joins SkyTeam – because it can

Virgin Atlantic and SkyTeam announced on 27-Sep-2022 that the UK long haul airline would join the alliance in 2023.

The announcement talked of the benefits to customers of improved frequent flyer benefits and greater access to SkyTeam members' global network.

However, Virgin Atlantic is already a member of an immunised joint venture on the North Atlantic, by far its most important market, with leading SkyTeam members Air France, KLM and Delta Air Lines (the latter also owns 49% of Virgin Atlantic).

Its relationship with these three partners could not really grow any closer as a result of SkyTeam membership. The benefits of Virgin's latest move will mainly be felt in other markets and by other SkyTeam airlines, but will be less significant than those already gained.

As much as anything, this feels like an exercise in completeness. It is doing it because it can.

TO READ ON, VISIT: Virgin Atlantic Airways joins SkyTeam – because it can

Europe aviation: capacity outlook plateaus, but forward bookings fall

Europe's seat capacity recovery as a percentage of 2019 levels remains in the narrow range of 86%-87% that it has occupied almost every week since late May-2022.

Seat numbers in Europe are at 86.4% in the week commencing 3-Oct-2022, which is a shortfall of 13.6% against the equivalent week in 2019.

Europe remains fifth in the regional ranking, above Asia Pacific, where capacity is down by 28.7% versus 2019, but below the Middle East, where capacity is down by 12.9%. North America capacity is down by 7.6%, Africa by 6.9%, and Latin America is down by 2.0%.

Projections derived from schedules for Europe in 4Q2022 are at 87%, which is the same as was achieved in 3Q2022 after six successive quarters of an improving trend.

Moreover, as economic concerns grow, IATA data indicate that forward bookings for 4Q are lower than for 3Q at the equivalent stage.

TO READ ON, VISIT: Europe aviation: capacity outlook plateaus, but forward bookings fall

Asia Pacific to lose its title as the world’s largest travel region

The Asia Pacific spent most of the last decade as the world’s largest region for air travel.

From 2012 to the onset of the COVID-19 pandemic, traffic to/from or within the region accounted for better than a third of all passenger journeys globally.

However, with the Asia Pacific recovery lagging, thanks to closed borders, heterogeneous pandemic responses, and caution around inbound tourism, the region is forecast to lose its number one spot in 2022.

TO READ ON, VISIT: Asia Pacific to lose its title as the world’s largest travel region

Industry warns ICAO has no time to waste to endorse net zero by 2050

The global aviation industry is reasonably optimistic that the International Civil Aviation Organization (ICAO) will endorse a target to achieve net zero emissions by 2050 at the organization’s 41st general assembly, which is now under way.

But even if ICAO establishes that baseline, challenges remain as differences between developing and developed countries need to be resolved.

And there is also the reality that the creation of a formal target will do little to satisfy critics, who argue that the industry is not moving fast enough to cut its emissions.

TO READ ON, VISIT: Industry warns ICAO has no time to waste to endorse net zero by 2050

Beijing Daxing Airport celebrates its third birthday; what impact has it made?

Several major cities worldwide have opened new airports in the past four years, whereas others have abandoned them.

None have faced the same level of disruption as Beijing’s Daxing Airport, which has taken successive hits from the COVID-19 pandemic.

With the pandemic possibly coming to an end, even in China, where it started, this is an opportune moment to assess the impact that Daxing has made locally.

In a nutshell – the airport is in a better position for the future, partially because it will be connected to Beijing Capital airport by high-speed rail, something that is rarely found anywhere else in the world and could make Beijing an exemplar for a two-airport system, where both are primary level gateways.

TO READ ON, VISIT: Beijing Daxing Airport celebrates its third birthday; what impact has it made?

Investors considering Paris’ third airport at Beauvais as concession draws to an end

France’s secondary and tertiary level commercial airports are owned and managed by an assortment of local government offices such as Chambres de Commerce, and private companies.

One of them is Paris Beauvais Tillé Airport.

The airport's concession will end in the summer of 2023 and already some powerful companies in the French airport-operating fraternity are reported to be investigating the potential the airport might offer them.

That potential hangs on Beauvais Tillé's position as the leading low cost airport serving the Paris region, but weighed against that are concerns about an overreliance on budget airlines, and on surface transport connections that do not compare with those of its main rival.

TO READ ON, VISIT: Investors considering Paris’ third airport at Beauvais as concession draws to an end

TAV Airports bids to operate Lagos Airport: part two – a questionable investment?

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 two of a two-part report. 

TO READ ON, VISIT: TAV Airports bids to operate Lagos Airport: part two – a questionable investment?

Latvia’s Riga Airport issues Airport City tender: part one – seeking investors and developers

The concept of the airport city is well established around the world, along with its big brother, the aerotropolis, which is an extension of the economic impact of the airport city into neighbouring areas.

Any airport can have a ‘city’, and many people now prefer to work and even live in close proximity to an airport, as they might have done to a port in previous centuries. Sometimes these additions are little more than extended business parks.

True airport cities cater to both economic and social needs, and it appears that that is the plan in Riga. Its USP lies in its position in the middle of the Baltics and the presence of airBaltic, and that both the city and the airport will lie on the north-south Rail Baltica line.

This is part one of a two-part report.

TO READ ON, VISIT: Latvia’s Riga Airport issues Airport City tender: part one – seeking investors and developers

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: Nine airlines sign LoIs for more than 130 AURA AERO ERA electric aircraft; Avianca Cargo and Ecoventura sign waste transport agreement; Wizz Air's CO2 emissions per pax km down 13% in Sep-2022; Aeroporti di Roma executes sustainability linked revolving credit facility; Brazil to participate in ICAO ACT-SAF programme.

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