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

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.

AirAsia Group airlines anticipate strong recovery in 2Q

The AirAsia group is something of a bellwether for the Southeast Asian airline industry due to its footprint in a range of countries in the region. So the widely varying rates of recovery for the group’s members give important indicators of the outlook for both the AirAsia empire and the broader Southeast Asia region.

The brutal period that AirAsia has endured during the COVID-19 pandemic is highlighted by the RM5.9 billion ($1.4 billion) annual loss it reported for 2020.

But looking ahead, the airline believes there is reason for near term optimism, as demand is projected to improve in its most important domestic markets. Some are bouncing back strongly towards pre-COVID levels, while others are in weaker condition as they prepare to emerge from the latest lockdowns.

But the general trend is upward in the second quarter. The group’s view is that there is even light at the end of the tunnel for its international operations, which have suffered most during the pandemic.

Granted, it is in AirAsia’s interests to paint a positive picture as it seeks to reassure financial markets during what is still a pivotal period for the airline. Nevertheless, it certainly has grounds to predict general improvement as it moves towards midyear and beyond.

TO READ ON, VISIT: AirAsia Group airlines anticipate strong recovery in 2Q

UK-US aviation: New entrants for North Atlantic’s biggest market

The UK-US aviation market is comfortably the biggest on the North Atlantic and has always attracted more competitors. This reflects historic ties of language and culture, the UK’s relative geographical proximity to the US relative to other large European nations, and a strong business traveller market.

Four airlines have left UK-US since 2019, most notably Norwegian Air, leaving a gap at the more price sensitive end of the market. Price sensitivity may emerge from the pandemic with increased importance.

Three airlines are now lining up to enter this segment: Aer Lingus and JetBlue this summer, followed by the new-start Norse Atlantic in late 2021 to take on Norwegian’s low cost long haul mantle.

IAG regards Aer Lingus as its long haul value operator. The airline’s deployment on UK-US routes, in preference to BA, increases the group’s options on the Atlantic. JetBlue has eyed this market for a long time, but only now does it have the long range narrowbodies to make it happen (plus slots at multiple London airports, including Heathrow).

Both Aer Lingus and JetBlue appear to have advantages over a ‘son of Norwegian’ model in brand, feed, partnerships and premium product/services.

TO READ ON, VISIT: UK-US aviation: New entrants for North Atlantic’s biggest market

American Airlines now the world’s busiest carrier

American Airlines was the world’s most active airline for the week beginning 29-Mar-2021, according to CAPA’s database,  based on OAG filings. American leads in both domestic and international seats flown; of its international seats, over three quarters are to Latin America and the Caribbean.

America’s airlines have surged back into top positions in recent weeks, as the US domestic market has opened up, with over one million passengers daily most days.

Each of the three largest US carriers, American Airlines, Delta Air Lines and Southwest Airlines are offering over 3 million seats for the week, the majority of them in the domestic market. All of the highest ranking airlines have substantial domestic routes, as international continues to languish.

United appeared in 6th position, while China’s three biggest airlines , China Southern, China Eastern and Air China, took 4th, 5th and 7th positions respectively.

Seven US airlines made the top 20 busiest, and, as a sign of things to come, eight Chinese airlines appeared in the 20.

Australia’s Qantas and LCC subsidiary Jetstar, part of the same group, are reported separately, but would have placed 13th if combined in their Group.

The first continental European airline for seat numbers in this week was Air France, appearing at #33 (Turkish Airlines placed #9). Aside from Air France, the only other Europeans to make the top 50 were Lufthansa and KLM.

TO READ ON, VISIT: American Airlines now the world’s busiest carrier

European aviation: Ryanair & Wizz Air best placed for market reopening

After operating only 27% of 2019 seat capacity in 1Q2021, Europe’s airlines are currently projecting further caution for Apr-2021, based on OAG schedules. Europe’s seat count is down by 70.6% in the week of 29-Mar-2021, which marks the start of the summer season 2021.

As it has for almost six months, Europe still lags other regions. As new lockdowns and further spread of new strains of COVID-19 occurs, this is unlikely to change soon.

Middle East capacity is down by 52.6% versus 2019, Africa by 50.8%, Latin America by 46.4%, North America by 37.4%, and Asia Pacific by 30.1%.

However, a rapid bounceback for Europe to more than 50% of 2019 levels is projected for May-2021, rising to 77% to 78% in Jul-2021 and Aug-2021.

More than evidence of inked-in planning, this reflects a ‘wait and see’ stance by airlines towards the relaxing of international travel restrictions. There is some logic to maintaining plans until greater clarity emerges.

Not uncharacteristically, Ryanair is more confident and is planning more than 80% of pre-pandemic capacity for the summer peak, while Wizz Air’s filed schedules reach 100% in Apr-2021.

Uneven vaccination roll-outs may hinder these plans, but Ryanair and Wizz Air are best prepared to take advantage of market reopening when it does happen.

TO READ ON, VISIT: European aviation: Ryanair & Wizz Air best placed for market reopening

SPECIAL REPORTS: Aviation Sustainability and the Environment

This regular weekly CAPA report features a summary of recent aviation sustainability and environment news, selected from the 300+ news alerts published daily by CAPA. This week’s issue includes: JetBlue Airways aims to achieve net zero carbon emissions by 2040; Air New Zealand appoints three new members to Sustainability Advisory Panel; Groningen Eelde Airport to produce green hydrogen; London Biggin Hill Airport to offer sustainable aviation fuel; UPS announces purchase of eVTOL aircraft from Beta Technologies.

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

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