Every 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.
In this week’s edition, our global team of experts deliver you a wealth of insightful commentary on the latest news and trends affecting the commercial aviation industry, including:
- Airport investment: the top 10 investors from CAPA’s Global Airport Investors Database
- JetSMART’s debut in Chile offers a test case for LCC staying power in Latin America
- Bangkok Airways SWOT Part 1: partnerships, network and Samui Airport ownership are big strengths
- A350/787 in China: Airbus and Boeing book more orders, Sichuan Airlines to be first A350 operator
Airport investment: the top 10 investors from CAPA’s Global Airport Investors Database
An exercise to revise the CAPA Global Airport Investors Database (GAID) was recently completed. It defined the 800 individual profiles and allocated them into four categories: major global investor; active investor; potential investor and lapsed investor.
This short review looks at who those really big investors and operators are, as measured by the number of their foreign investments. It details a little of their history, and examines what the future might hold for them.
53 profile entries in the GAID are of ‘Major Global Investors’ – investors in at least five airports. Equal #1 are Utilico Emerging Markets and Children’s Investment Fund.
When first produced in 2011, the CAPA database listed fewer than 250 investors listed; it has now passed beyond 800 entries. It differs from the very few other such databases in that once a profile entry is made it remains there in perpetuity.
JetSMART’s debut in Chile offers a test case for LCC staying power in Latin America
The LCC specialist Indigo Partners has broadened its reach deeper into Latin America with the swift creation of JetSMART, a new ultra low cost airline based in Chile. JetSMART is one of many new low cost airlines attempting to capitalise on stimulation opportunities in Latin America as the region settles into an economic recovery. Trips per capita in many Latin American countries remain low compared to those in more mature markets, and Chile offers unique characteristics that Indigo no doubt found attractive, including the country’s status as one of the more liberalised markets in the region.
JetSMART is materialising as Latin America’s largest aviation conglomerate LATAM Airlines Group is beginning to roll out a new fare structure to compete more effectively with existing and aspiring LCCs. This action is in order to obtain its fair share of passenger growth resulting from stimulatory pricing. LATAM’s moves alter the competitive dynamics JetSMART faces in the Chilean market, where LATAM is the dominant operator by a wide margin.
Key to JetSMART’s longevity is maintaining a cost structure that enables traffic stimulation in Latin America’s challenging environment where high taxes and airport costs are a major feature. The company’s backers are more than familiar with fine tuning an ultra low cost operation, but Latin America presents its own unique obstacles for start-up LCCs to overcome.
Bangkok Airways SWOT Part 1: partnerships, network and Samui Airport ownership are big strengths
Seemingly against all odds, Bangkok Airways has been a remarkable success story, proving there is still room for a short haul full service airline in a market that has increasingly become dominated by LCCs. The airline has grown rapidly, and has had one of the highest operating margins in Southeast Asia.
The combination of a robust partnership portfolio and a unique network has enabled Bangkok Airways to differentiate itself from competitors and thrive. A portfolio of its own airports, including at the popular resort island of Samui, has been another key strength.
In this first part of a SWOT analysis, CAPA examines Bangkok Airways’ strengths in detail.
The airline’s weaknesses, opportunities and threats will be analysed in part 2.
A350/787 in China: Airbus and Boeing book more orders, Sichuan Airlines to be first A350 operator
Since a number of orders placed over the past 15 months, Airbus’ A350 has narrowed the gap with mainland Chinese airlines compared to Boeing’s 787. Yet the 787 is still outselling the A350 nearly two to one: in service, and on order, 787s total 136 (with five options), compared to 71 for the A350. A handful of smaller airlines, without widebody experience so far, have ordered next generation widebodies, so there is a risk that some orders may not eventuate – or airlines will be merged, and orders consolidated.
Only three airlines – all state-owned, Air China, China Eastern and China Southern – have ordered both the A350 and 787.
While the first of a new aircraft type typically goes to a state-owned airline, and often Air China, it appears Sichuan Airlines will be the first in mainland China to receive the A350. The A350 will enable Sichuan to open nonstop services to North America, potentially in competition with Hainan Airlines.
At the same time, China Eastern is deciding how to allocate its overlapping fleet of A350s and 787s.