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

18 October, 2021

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.


European airline 4Q2021 schedules point to next step up in recovery

Total seat numbers in Europe are 32.7% below 2019 levels in the week of 11-Oct-2021, the 11th week in the region of seat numbers at -33% to -35%.

Europe is still in fourth place in the regional capacity recovery ranking. The Middle East, where seat capacity is down by 38.5% versus 2019, has slipped to the bottom. This week (week commencing 11-Oct-2021), Asia Pacific is down by 38.3%, Africa by 30.4%, Latin America by 23.2%, and North America by 18.5%.

Airport passenger numbers in Europe were down by 39% versus 2019 in the week of 19-Sep-2021, the seventh week at a similar level, according to the most recent data from ACI Europe. This compared with capacity at -34% in that week. Europe's traffic recovery has a north-south divide, with Southern Europe stronger, while non-EU Eastern Europe is the strongest region.

Europe's capacity and passenger traffic as a percentage of 2019 levels both remain on plateaus. Nevertheless, there is some encouragement in capacity projections derived from schedules for 4Q2021. After many weeks of cuts to the outlook, capacity scheduled for 4Q2021 has stabilised at 73% of 2019 levels - up from 64% in 3Q2021.

TO READ ON, VISIT: European airline 4Q2021 schedules point to next step up in recovery


Australian ULCC Bonza to fire up the domestic fare war

A new independent low fare airline, backed by Florida-based private investors 777 Partners, plans to launch in Australia in early 2022. The start-up, to be headed by former Virgin Blue executive Tim Jordan, aspires to be the only ULCC in the Australian domestic market.

Named Bonza (old Australian slang for a good thing), the airline will launch service in early 2022 with Boeing MAX-8 aircraft, typically operating at a seat cost and carbon emission level up to 20-30% below those of existing domestic airlines.

The new team argues that of the 15 largest domestic aviation markets in the world, Australia is the only country without an independent low cost airline.

Bonza's entry will certainly fire up an already budding fare war. Former regional specialist Rex Airlines had already entered with 737s on some major routes earlier in 2021, confronting a reconstituted Virgin Australia, under the ownership of Bain Capital and the Qantas/Jetstar combination all eager to get the cash flowing as Australia's state borders open up.

TO READ ON, VISIT: Australian ULCC Bonza to fire up the domestic fare war


European aviation capacity recovery lacks impetus for next upward step

The easing of international travel restrictions helped to drive Europe's capacity recovery in early summer 2021. Weekly seat capacity improved from 26% of 2019 levels in late Apr-2021 to 66% in early Aug-2021. However, the recovery has lost momentum over the past two months

Total seat numbers in Europe are now 33.0% below 2019 levels in the week of 4-Oct-2021. This is 67% of 2019 - barely changed from early Aug-2021, in spite of modest gains last week.

Europe remains in fourth place in the regional capacity recovery ranking. Asia Pacific, where seat capacity is down by 39.6% versus 2019, remains at the bottom. This week, week commencing 04-Oct-2021, The Middle East is down by 36.9%, Africa by 31.2%, Latin America by 23.7%, and North America by 19.7%.

There is a wide range in the pace of recovery among Europe's leading aviation markets.

Russia is at 89%, whereas the UK is at just 54% of 2019 seat levels. All appear to be fading in impetus to make the next significant upward step. The further easing of travel restrictions, for example as in the UK from 4-Oct-2021, has already been taken into account in airline schedules.

TO READ ON, VISIT: European aviation capacity recovery lacks impetus for next upward step


Cargo continues to sustain global airlines during pandemic recovery

The air cargo business continues to maintain strength even as recovery from the COVID-19 pandemic remains uneven. As a result, some US airlines that have leaned on cargo during the COVID-19 crisis plan to sustain some portion of those freight-only operations for the near term.

Overall, global cargo demand is projected to exceed 2019 levels both in 2021 and 2022, since the process of placing long haul aircraft back into passenger operations will take some time.

That could result in the boom times for cargo to continue as a lack of supply will help lift cargo rates to sustain record revenues well into 2021.

TO READ ON, VISIT: Cargo continues to sustain global airlines during pandemic recovery


Istanbul and Moscow airports top the European league

Even in the heyday of the Soviet Union and the Ottoman Empire few could have anticipated that Moscow or Istanbul would head the table of the busiest transport stations in Europe, meaning, in this case - airports.

But that is the case in the first half of 2021 according to statistics recently released by ACI Europe, with those two cities providing the top five airports between them, and with St Petersburg and Antalya joining them to make it seven out of 10 for Turkey and Russia.

As CAPA has often emphasised these last few months, it is the continuation of domestic services in countries, with a big demand for them, which has led to this situation.

Or at least, mainly that domestic demand, as international vacation travel and transit have also played their part too.

TO READ ON, VISIT: Istanbul and Moscow airports top the European league


Flycana injects new ULCC competition in the Caribbean

The Dominican ultra-low cost start-up Flycana is preparing for an early 2022 launch, after the COVID-19 pandemic delayed its planned debut in late 2020. Plans are under way to unveil a new brand livery before the launch of operations with Boeing 737 MAX 8 narrowbodies.

Flycana is among numerous start-ups worldwide that are opting to enter the marketplace during the pandemic; but it has always been challenging for the low cost model to gain traction in the Caribbean.

Whether this time will be different is still unknown, but Flycana believes there is a distinct opportunity to inject low fare competition into the market with new aircraft and a diversified network to ensure that it is not overexposed to one particular geography.

TO READ ON, VISIT: Flycana injects new ULCC competition in the Caribbean


CAPA Live: airBaltic CEO Martin Gauss - probably private after 2023 IPO

Talking at the CAPA Live on 8-Sep-2021, airBaltic Chairman & CEO Martin Gauss spoke with CAPA's chairman emeritus Peter Harbison. Here are some of the key quotes from the session: "As a little airline, the code share partners have a big impact on our sales in their home markets"; "there's a lot of passengers who would like to have a seat in between free today and are willing to pay more for that"; "the company probably will end up being a private company after the IPO...the earliest now we see is '23".

TO READ ON, VISIT: CAPA Live: airBaltic CEO Martin Gauss - probably private after 2023 IPO


Post-Pandemic surge could pressure Asia-Pacific MRO capacity

The Asia-Pacific MRO industry is expected to face a temporary capacity crunch when airlines return more of their fleets to service after the COVID-19 pandemic. However, the longer-term capacity outlook is brighter as MRO providers are keeping facility expansion plans largely on track.

Major MRO companies in this region have seen a significant dip in business due to airlines parking large numbers of aircraft and deferring heavy maintenance. But demand could spike quickly when COVID-19 restrictions ease, with many Asia-Pacific airlines needing MRO providers to help reactivate aircraft that have been in storage for several months.

While it appears there will be adequate MRO capacity once airline operations settle into a new normal, other challenges will remain. Chief amongst these could be workforce shortages - a potential problem for many parts of the aviation industry, but seemingly a particular headache for MRO.

TO READ ON, VISIT: Post-Pandemic surge could pressure Asia-Pacific MRO capacity


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: IATA outlines base case for future SAF/alternative fuels to meet net zero ambitions; JetBlue CEO: 'We've got to make sure that we scale up sustainable aviation fuel'; Virgin Atlantic Airways renews mission to achieve net zero by 2050; Vancouver International Airport unveils 'Roadmap to Net Zero Carbon 2030' decarbonisation plan; ACI World to submit safety and facilitation working papers to ICAO High-Level Conference.

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