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.

Asian aviation: recovery hampered by slow vaccination/border controls

While other parts of the world are beginning to open up to international travel, in most of the key Asia-Pacific markets there is very little progress in restoring cross-border air traffic flows. This represents a major headache for Asian airlines anxiously waiting for revenue opportunities that could help spark recovery.

European countries have been removing some international travel restrictions as their COVID-19 vaccination rates have reached high levels – although progress is lumpy and largely uncoordinated.

But in the Asia-Pacific region, vaccination rates have generally been much slower. New waves of more infectious strains have also made Asian governments more cautious about opening borders, and in many cases even the gains made in domestic markets have eroded due to heightened restrictions.

Vaccination programmes are crucial to airlines’ recovery hopes, as they are widely considered the best avenue for resuming travel. When countries reach herd immunity vaccination levels of 70% or higher, their governments will have more options for removing restrictions.

A cross-section of leading Asia-Pacific aviation executives discussed these issues during the Jun-2021 edition of CAPA Live. They outlined the scale of the challenges faced by airlines and airports, and provided some insights into their short term prospects.

TO READ ON, VISIT: Asian aviation: recovery hampered by slow vaccination/border controls


European aviation recovery reaches new high, but lags other regions

European aviation has recovered both capacity and passenger numbers throughout 2Q2021. Seat capacity in Europe is 53.0% below 2019 in the week commencing 21-Jun-2021, compared with a reduction of 70.6% in the first week of the quarter. Europe is now closer to 2019 capacity than at any time since Mar-2020.

However, this result remains weaker than the other regions, even though the gap is narrowing.

Middle East seat capacity is down by 51.6% versus 2019, while Africa is down by 40.9%, Asia Pacific by 39.6%, Latin America by 34.7%, and North America by 26.3%.

Europe’s passenger traffic trend has also improved, although with a gap of approximately 8ppts behind capacity. In early Jun-2021 European airport traffic was 67% below 2019 levels (source: ACI Europe), but this compares with US traffic being just 28% below 2019 (source: US Transportation Security Administration).

Europe has higher vaccination rates than most regions apart from North America, but its reliance on international markets is weighing on its recovery. A better synchronised approach between states to reopening international travel in Europe could improve this.

TO READ ON, VISIT: European aviation recovery reaches new high, but lags other regions


Australia loses two domestic routes for every new one

It’s no secret that the revolving doors of state borders have perplexed airline route reopenings during the pandemic. But what’s not so well known is that Australia has lost more routes than it has gained over the past year. In the process, a possible AUD65 billion could have been spent locally, while Aussie travellers have been confined at home.

These are among the many vital issues CAPA will be addressing at its first in-person Summit since 2020, the CAPA Australia Pacific Aviation Summit (Sydney, 08/09-Sep-2021).

There have certainly been welcome new routes within the Australian domestic market, with one or two big winners. But more domestic and regional routes have been lost through the pandemic than gained, which brings into sharp focus the effectiveness of state and federal government support arrangements and the vagaries around domestic borders.

This has left the industry with fewer city pairs or seats than before the pandemic, while the ‘rest of the Australian economy’ has largely recovered to, or ahead of, pre-pandemic levels. And in the process, a potentially massive economic windfall for the domestic tourism industry has been squandered.

TO READ ON, VISIT: Australia loses two domestic routes for every new one


Canada: small air travel restriction changes – but no timetable

The latest moves by Canada’s government indicate that it is taking a very measured approach in easing travel restrictions.

The government has stated that, starting 5-Jul-2021, vaccinated Canadians will be able to skip mandatory 14-day quarantines when re-entering the country. It is a small step that was welcomed by the aviation sector.

Yet the industry continues to push the government for a more comprehensive reopening plan that has not materialised. The result is a series of small changes that will do little to move the needle on demand for the summer high season.

TO READ ON, VISIT: Canada: small air travel restriction changes – but no timetable


CAPA Live: Wizz Air CEO József Varadi – ‘every single airline is in trouble’

Talking at the CAPA Live on 9-Jun-2021, Wizz Air CEO József Varadi spoke with CAPA’s chairman emeritus Peter Harbison. Some of his key quotes included: “Once the market starts lifting you will see the distress flowing through the system”; “I think the industry was celebrating a few decades ago, that they got rid of the states, the governments, but now they are back into the game, even holding equity in airlines”; “We are flying to 49 countries and there are no two countries that would apply the same measures on COVID”; “other than probably one or two airlines in Europe, I think everyone is in trouble”; “there is no worse owner than the state”.

TO READ ON, VISIT: CAPA Live: Wizz Air – ‘every single airline is in trouble’


CAPA Live: KLM CEO Pieter Elbers – ‘exit from this will be a bit bumpy’

Talking at the CAPA Live on 9-Jun-2021, KLM President & CEO Pieter Elbers spoke with CAPA’s chairman emeritus Peter Harbison. Some of his key quotes included: “For the last two to three weeks we see an uptick of travel, an uptick of bookings…I think it’s fair to say that the exit from this will be a bit bumpy”; “It’s time for the EU to make a step forward and the transatlantic market between the US and Europe”; “as an airline, hygiene, flexibility, network, peace of mind, these are the aspects which are important”; “I don’t believe that COVID has changed our industry, but I do believe that it has accelerated some of the (sustainability) trends which were already there”.

TO READ ON, VISIT: CAPA Live: KLM CEO Pieter Elbers – ‘exit from this will be a bit bumpy’


Sydney KSA financially strong; Western Sydney airport under way

Sydney Airport is the latest to join the ranks of those hoping to achieve ‘carbon neutrality’ by 2030. However, various curfews and caps remain in place and look likely to continue.

That is at least part of the reason why the government decided, five years ago, to build a second airport for the city, 40 km to the west between suburbs and open land. Scheduled to open in 2026, the airport’s nature has changed, and it will now fill a more profound role than that of an LCC reliever airport.

Starting with a blank canvas and a whole new paradigm set, its designers can build a model on which to base any other airport for what remains of aviation.

TO READ ON, VISIT: Sydney KSA financially strong; Western Sydney airport under way


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: UK aviation industry bodies set interim decarbonisation targets; All Nippon Airways operates regular scheduled commercial domestic service with SAF; Edinburgh Airport sets goal of reaching carbon neutrality by 2024 as part of sustainability strategy; London Gatwick Airport reports key sustainability achievements during 2020; Rolls-Royce: First run of UltraFan in 2022 to be conducted with SAF.

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

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