Analysis for Europe/MEA
For much of this decade, Middle East aviation has been besieged by external events throwing markets in disarray. Now there is a dispute of internal making. Four countries – Bahrain, Egypt, Saudi Arabia and the UAE – are cutting ties with Qatar for political reasons. Local flights are being cancelled while Saudi Arabia has shut its airspace to overflights from Qatar Airways.
Air travel across parts of the Middle East has become very complicated after Bahrain, Egypt, Saudi Arabia and the United Arab Emirates (UAE) cut ties with Qatar, closing border with the small Gulf nation and effectively blocking land, air and sea traffic in and out of the country due to a row over terror and regional stability. Governments in Yemen, the Maldives and the eastern-based government of Libya have subsequently joined the move to end relations with Qatar.
Basic economics tells us that when the supply for a product reduces and demand for that same product increases, then its cost will rise. It is no surprise to learn then that passengers caught up in the British Airways (BA) flight cancellation saga over the past UK bank holiday weekend (May 27-29, 2017) were forced to pay hugely escalated prices for hotel rooms around the airline’s main hub at Heathrow Airport.
Qatar Airways continues to pursue rapid expansion in the Australia market as it upgauges its Melbourne service to the A380 at the end of Jun-2017 and prepares to launch Canberra in early 2018.
IAG’s launch of long haul low cost brand Level earlier this month marks a major milestone on multiple fronts and highlights the evolution of business models in the dynamic airline industry. The “adapt or die” motto has never been so relevant as it is today. Business models are changing at a pace which may still seem ridiculously slow for other industries but is scary fast for most airlines.
Wizz Air celebrated its 13th birthday on May 19, 2017 a period during which it has grown to be the biggest airline in Central & Eastern Europe (excluding Russia and Turkey), with a compound average growth rate in ASKs of 24%, and in passenger numbers of 23%, over the past ten years. In summer 2017, and across its financial year to March 2018, Wizz Air is accelerating its growth rate. It has 26 new routes and 117 new destinations this summer, while this month (June 2017) it open its first aircraft base in Western Europe at London Luton.
Air India is targeting the Scandinavian market for growth as it introduces not one, but two new routes into the region during the second-half of 2017. The airline has confirmed it will launch flights from Indira Gandhi International Airport in Delhi to both Copenhagen and Stockholm as it seeks to take advantage of growing trade between Scandinavia and India.
In most parts of the world, the tourism forecast for this Summer is hot, hot, hot, reports ForwardKeys, which predicts future patterns by analysing 16 million booking transactions a day. The company reports that global long-haul air travel bookings for June, July and August are 6.4% ahead of where they were at the same time last year.
Low-cost carrier Norwegian is to expand its transatlantic network with the addition of long-haul flights from Rome’s Leonardo da Vinci International Airport. The airline will base a single Boeing 787-9 at Fiumicino from November 2017 to introduce flights to Newark and Los Angeles, adding a second aircraft from February 2018 to grow frequencies and add a link to Oakland, serving the San Francisco Bay market.
From a terrorist cyber hack to a simple inadvertent removal of a plug from a socket, whatever caused the IT failure that left British Airways’ fleet of aircraft grounded for most of the weekend is a lesson learned, not just for the airline, but for the industry as a whole, especially considering the important role technology provides in the day to day needs of the aviation system.