After years of discussions and six of negotiations, the European Union (EU) and the Association of Southeast Asian Nations (ASEAN) signed a bloc-to-bloc air transport agreement on 17-Oct-2022.
The deal replaces more than 140 bilaterals between the 27-member EU and the 10-member ASEAN blocs, with a combined population of 1.1 billion. Following a number of EU-wide deals with individual nations, it is the first air transport agreement between two blocs of nations.
ASK capacity in the EU-ASEAN market grew at almost 5% pa for three years until interrupted by COVID-19, a baseline of growth that could be boosted by the new liberalised deal. Airlines from ASEAN lead in this market, particularly Singapore Airlines and Thai Airways, but all participants could benefit from new opportunities. New entrants can also be expected.
The agreement applies immediately, although it will now go through ratification processes required on both sides. That is likely to be a formality, with all member nations on both sides benefiting from increased market access and improved connectivity.
TO READ ON, VISIT: EU & ASEAN make aviation history with bloc-to-bloc air transport deal – ASEAN airlines dominate
Hong Kong’s relatively conservative approach to removing entry restrictions means it has fallen behind many other Asian hubs in terms of capacity recovery.
However, the relaxation of quarantine requirements in Hong Kong on 26-Sep-2022 has prompted several airlines to announce plans to resume flights to this market, or to add to their current services.
Some others, however, have not yet committed to returning to this market, or have made their exits permanent. For this reason it is still unclear how extensive the recovery in the Hong Kong market will be, or how long it will take.
Part one of this report examined the Cathay Pacific Group’s response, as well as looking at the Hong Kong market recovery versus other airports in the region. Part two will focus on the plans of foreign airlines serving Hong Kong, as well as some broader market issues.
This is part two of a two-part report.
TO READ ON, VISIT: Hong Kong aviation: part two – more airlines are returning, but with notable exceptions
Projections for Europe's seat capacity in 4Q2022 derived from current airline schedules anticipate no change from the narrow range of 86%-87% of 2019 levels that has persisted almost every week since late May-2022.
Schedules for 1Q2023 project this stepping up to 90%, but there is currently no obvious spark that will catalyse such a move, and the capacity recovery could very well continue to be range-bound.
In the week of 24-Oct-2022 seat numbers are at 86.6%, which is a shortfall of 13.4% against the equivalent week in 2019.
Given operational constraints and economic concerns, it seems reasonable to conjecture that a return to 2019 levels of capacity may not occur in Europe until 2024 or 2025. Indeed, EUROCONTROL's Oct-2022 update for flight numbers anticipates movements above 2019 levels only in 2025.
TO READ ON, VISIT: Europe aviation: don't expect 2019 capacity levels before 2024 or 2025
Air India is planning significant merger and fleet moves as it looks to strengthen its competitive position in the dynamic Indian aviation market.
The potential integration of Air India and its joint venture airline Vistara would deliver some of the consolidation that was expected to result from the recent privatisation of the country’s flag carrier.
Air India’s new owner, the Tata Group, intends to grow the airline’s market share dramatically. Merging some of the group’s multiple airline holdings will help it achieve this, but it also needs organic growth.
To this end, Air India plans to lease 30 aircraft to boost its network. It is also likely to place orders for new aircraft: it has no orders on its books and will need them to at least to account for fleet renewal.
The sudden flurry of activity by Air India is a welcome development after it has spent years in limbo while the government tried to find a buyer. The arrival of the COVID-19 pandemic also stalled its plans, but now the Indian market is booming again, and growth is back on the agenda.
TO READ ON, VISIT: Air India-Vistara integration would aid Tata Group’s expansion ambitions
On several occasions CAPA has reported on Lufthansa’s apparent disinterest in building any kind of hub operation at Berlin, where a new airport opened in 2020 following lengthy delays.
Berlin is, of course, the capital of Germany – Europe’s most populated country, with the largest economy.
Now Lufthansa’s CEO has reinforced that reticence, insisting that the country is “too small” to merit a northern hub to supplement the existing central and southern ones.
But is it? And could Lufthansa develop its modest Berlin operations – which amount to a feed to Frankfurt and Munich – by way of O&D routes alone?
Colombia’s newest low cost operator Ultra Air is off to a solid start, despite global macro-economic pressures, including fuel price volatility.
But the Colombian market continues to rebound at a steady pace, and Ultra Air expects that market expansion will continue.
There are also other significant changes occurring in the Colombian market as the country’s first and third largest airlines, Avianca and Viva, along with the Brazilian operator GOL, are working to create the Abra Group.
Ultra Air’s CEO William Shaw believes that consolidation could open up some opportunities, but also cautions that a level playing field needs to be maintained as the latest round of consolidation progresses.
Amsterdam Schiphol Airport has recently had its annual movements cap reduced to 440,000 per annum, which gives it a big problem because the alternative – the opening of the general aviation Lelystad Airport to commercial flights – has been put back to 2024, at the earliest.
Now Schiphol’s owner has taken a stake – subject to ratification – in Maastricht-Aachen Airport (MAA) in the far south of the country and close to the German border.
The Netherlands' Limburg Provincial Council authorised MAA to continue operating in Jun-2022, but with the governance structure adjusted, whereby the province could no longer be the sole shareholder. Conditions included finding an 'environmentally conscious' partner to jointly to operate the airport and creating a 'generous' environmental fund.
Taking a share in MAA, and with possibly more to come later, gives RSG the option of shifting some freight operations there in a similar manner to what Frankfurt Airport did with Hahn Airport when it part-owned it. The airport is already well geared up towards freight handling with a 2750m runway.
That will at least give RSG the option to encourage some cargo flights to operate there, at an airport that is well placed for increased trucking activities.
The demise of the UK’s Doncaster-Sheffield Airport must have set many municipal authorities’ nerves on edge. Now Southampton Airport on the English south coast says it will need to build back up quickly to at least 1.2 million passengers annually if it is to survive – while it will lose GBP4.5 million this year.
Candidly, the management admits it doesn’t deserve to survive if it cannot make money.
The remedy appears to be a runway extension on which work should begin in 2023, the usual objections having been overcome in the courts.
But supply doesn’t necessarily equate with demand, and with competitors for its catchment area – including the two London giants that are Heathrow and Gatwick, as well as Bournemouth, 30 miles to the west – there is much work to do just to get Southampton back to pre-pandemic levels.
This is part one of a two-part report.
TO READ ON, VISIT: UK’s Southampton Airport: part one – no airport ‘has right to exist if it can’t make money’
Greece had taken a battering economically long before the pandemic and more recent events.
The country's debt crisis occasioned punitive measures to counteract its bailout, including the need to sell off infrastructure, which included airports.
Some are already gone, but the state still indirectly holds 55% of Athens Airport. A gaggle of potential investors had already been identified but fears of low offers (which have surfaced at other transactions during the last few years) have possibly driven the government to consider a stock market float.
But with the airport in reasonably sound shape, the industry dragging itself back on course, and the pandemic possibly coming to an end, it might be better to hang on and wait to see what investor sentiment looks like in a few months' time.
This is part two of a two-part report.
TO READ ON, VISIT: Athens Airport equity sale back on the radar: part two – government could wait to gauge interest