- CAPA Analysis
- Airline comparison
- Airline Non-Stop Connectivity
- Airline Groups
- Airline Aggregator
- Airport Groups
- Airport comparison
- Airport Non-Stop Connectivity
The phrase "jumbo jet" has been in use for decades but takes on new meaning in Dec-2015 with the planned entry into service of Emirates' two class A380 seating 615 passengers – the most yet of any aircraft. The version will have 18% more seats than Emirates' largest A380 and will be the first time an A380 does not have first class. Emirates is removing that cabin (with its onboard showers) as well as some business class seats to make room for more economy seats. The aircraft is initially to be deployed to Copenhagen and Bangkok, destinations with high leisure but limited premium demand.
Emirates plans to take an initial 15 of these aircraft. Already its 73 A380s on order account for 64% of the type's backlog. Half of the in-service fleet is held by Emirates and Singapore Airlines. As the first operator and with shorter leases, SIA is planning the future for its first batch of A380s. SIA does not intend to renew the leases of these aircraft since they are some of the first and do not incorporate later production chain efficiencies.
The most surprising part about the 30th anniversary of Emirates Airline on 25-Oct-2015 is that the carrier is, in fact, 30. There are those who might think Emirates is older: after all, it is now the world’s largest international airline. Surely such an achievement must be grounded in history, back in the days of flying boats, the League of Nations and colonial empires.
But many would be surprised Emirates is as old as it is. It is portrayed as the fighting upstart, an airline different from the legacy pack, and an operation where growth is still plentiful. Emirates’ youth means it is full service without legacy baggage, becoming a grave threat to the establishment. Competitors are starstruck; Air France-KLM CEO Alexandre de Juniac said in 2013 he flew Emirates and took 15 pages of notes.
That is a fitting anecdote to describe the inflexion point surrounding Emirates’ 30th anniversary. While competitors look at what Emirates has done, Emirates is looking towards the future. As with humans celebrating their 30th birthday, Emirates sees itself entering adulthood. It is time to implement those practices previously written off for another day, fine-tune goals and get in shape for the future.
Mainland China is the market fuelling Asia's long haul growth – except in Taiwan. Boeing on 15-Oct-2015 confirmed EVA Air's intent to purchase 26 Boeing widebodies (24 787-10s and two 777-300ERs) in addition to an existing 13 777-300ERs on order, bringing its passenger Boeing widebody backlog to 39 with a further six from Airbus. EVA has the sixth-largest passenger widebody backlog in Asia. EVA's long haul network is mostly comprised of 21 777-300ERs, which it has used to quietly grow to North America, bolstering its Taipei Taoyuan hub. EVA in 2015 is the ninth largest trans-Pacific carrier based on flights, but fourth fastest growing.
EVA's growth is slightly ahead of the average of all airlines in the trans-Pacific market. This is more important than it seems: EVA has been unable to tap the mainland China-North America transfer market owing to complex government restrictions. In comparison, all of its major competitors – including the three airlines with higher growth rates: ANA, Air China and Cathay Pacific – owe much of their growth to the China market. It was expected that Taipei by the end of the year would be open to mainland China transfer traffic, currently prohibited. These hopes were dashed on 14-Oct-2015 when Beijing and Taipei failed to reach an agreement. EVA, and competitor China Airlines, continue to sit on remarkable if uncertain potential of making Taipei a mainland China-North America transfer hub.
Taipei Taoyuan, the largest airport in Taiwan, grew 11.1% in 2014 to handle 35.8 million passengers, making it the 16th largest airport in Asia Pacific and bigger than Tokyo Narita, Mumbai and Manila. Taoyuan was also Asia Pacific's fastest growing major airport outside of mainland China. Taoyuan achieved this despite construction works that took a runway out of service. Full operations are expected to resume in early 2016 and will ease existing congestion as well as open up more slots for growth. Taiwan recorded a 23.6% increase in inbound visitors in 2014.
1H2015 traffic grew at a slower 7%. EVA Air, the second-largest carrier in Taiwan, is leading growth ahead of China Airlines. Japan is the largest growing market with nearly an additional 1,000 seats a day in 2015. The USA is also a large growth market as EVA undertakes long-haul expansion. Taoyuan in 2014 gained two new local airlines, both LCCs: Tigerair Taiwan and V Air. This gain is partially offset by reductions at TransAsia following a series of incidents. A special one-off A380 flight from Emirates brought the aircraft to Taoyuan, which has invested to support the type. But perhaps China Southern is a more likely regular operator. Next Taoyuan will see growth from cross-Strait transit passengers and a new terminal three.
The much-celebrated growth of Chinese tourism is not occurring evenly. An additional 3.8 million Chinese visitors travelled to core Northeast and Southeast Asia in 2014 compared to 2013, representing 19% growth. But this growth was concentrated exclusively in Northeast Asia while Southeast Asia actually contracted. This excludes Thailand, which is earning its "Teflon Thailand" reputation: after flat performance over much of 2014 due to political uncertainty, Chinese visitors have sprung back up to all time highs. Its neighbouring countries are far less fortunate. It is little wonder Korea, Thailand and Japan are the largest growth markets for Chinese airlines.
Despite weakness in Southeast Asia, foreign airlines are typically not planning to further reduce capacity. As one example, Singapore Airlines instead plans to link outbound China traffic with other markets, such as Australia.
Rapid growth within Northeast Asia now means that Chinese visitors have come to define tourism profiles: they accounted for 18% of all visitors to Japan in 2014, 43% to Korea and 40% to Taiwan. Such high shares become contentious locally – and risks that countries and airlines need to carefully manage.
Sichuan Airlines is due to take delivery of an Airbus A320 family aircraft on 22-May-2015, giving the Chengdu-based carrier 100 aircraft. Sichuan becomes the seventh airline in China to have a fleet of 100 or more aircraft. Globally Sichuan will be the world's 50th largest airline by fleet size. Sichuan intends to take another 100 aircraft over the next decade.
Sichuan's hinterland is mostly in China's west, from Xi'an and Kunming to Chengdu and Chonqging, although it also has a large presence along China's eastern seaboard. Sichuan carried just under 20 million passengers in 2014, almost all domestic.International flying, which accounts for 9% of Sichuan's seats in May-2015, is mostly around Northeast and Southeast Asia but limited long-haul links extend to Australia, Moscow and Vancouver.
All of China's Big Three airlines – Air China, China Eastern and China Southern – have a direct or indirect stake in Sichuan Airlines, creating competing interests in China's booming west.
American Airlines' 07-May-2015 launch of daily Dallas-Beijing services gives Dallas/Fort Worth airport, in the space of a year, its trifecta of Greater China destinations: Beijing, Hong Kong and Shanghai. Dallas becomes the 10th North American airport to offer flights to the three cities. Four airports – Los Angeles, New York JFK, San Francisco and Vancouver – have services to additional cities; San Francisco has the most with six greater China destinations.
The Dallas-Beijing service also cements a turning point for American Airlines' Asia network, which in 2015 will be larger in mainland China than Japan, the historical Asian focus for US airlines. American in 2015 will have 22% more seats to mainland China than Japan. United also will now have an 11% larger network in China than it has in Japan in 2015. Delta remains anchored on Japan, with twice as many non-stops seats there as to China, although the gap has been narrowing.
China's regulator the CAAC decreed that Air China is the largest carrier in the China-US market, ending the "domination" of US carriers. However this was based on Air China operating to six US cities while the largest US carrier, United, links China with only five US cities.
On almost every other metric – seats, frequency, city pairs – United (Air China's Star Alliance partner) is far larger and will grow in 2015 as it expands its Chengdu service and adds a second daily flight from San Francisco to Shanghai, the first example of a US carrier having more than a daily flight on a Chinese routing.
Perhaps more important though is the fact that the CAAC saw fit to announce the comparison, a clear statement that China's international airlines are on the march, particularly in one of their most important strategic markets.
Delta Air Lines and Virgin Australia are seeking re-authorisation for 10 years from Australian regulators for their joint venture. The US DoT initially took longer to approve the alliance but gave indefinite approval. Virgin continues to need Delta as a partner more than Delta needs Virgin, owing to the numerous connections from US gateways Virgin needs access to. The two will account for 25% of 2015's seat capacity compared to a much larger 56% for Qantas, with the remaining 19% held by United.
There have been limited developments from the smaller carriers, and Delta and Virgin have offered little growth. Nor in their application do they suggest further growth is on the horizon. Virgin Australia is short on long-haul aircraft and anyway is focused on its core domestic market. Delta has a much larger globe to tend to. United has made incremental changes while Qantas has grown the most. Given market dynamics, there is little prospect for a new entrant.
AirAsia nears 50 million annual passenger/200 aircraft milestones, having transformed Asian aviation
AirAsia ended 2014 having carried about 50 million annual passengers and with a fleet of nearly 200 aircraft across its portfolio of eight airlines. Nearly 280 million passengers have flown on AirAsia since its launch at the end of 2001.
AirAsia has had perhaps the most remarkable run by any airline in history and almost single-handedly shaken up Asia’s aviation industry. The LCC penetration rate within Southeast Asia is now nearly 60% compared to near zero in 2001.
AirAsia becomes the first airline brand in Asia outside China to carry 50 million passengers in a year. As a yardstick of its global scale, only 10 airline brands globally are currently in the 50 million passenger club.
China Southern Airlines has become the sixth airline group in the world – and the first outside the United States or Europe – to transport over 100 million passengers a year. Founded only in 1988, China Southern reached this milestone in 2014 faster than the other groups carrying over 100m passengers: American Airlines, Delta Air Lines, Lufthansa Group, Southwest Airlines and United Airlines. Ryanair expects to carry 97m passengers in 2015, likely leading it to carry 100m shortly thereafter.
The Air China and China Eastern groups are expected also to cross the 100m mark. Fast growth at the HNA Group could also see it carry 100m passengers around the turn of the decade. This would be impressive given the group has limited public capital, but would also give China four groups with over 100m passengers, matching the US.
China Southern is big, but this fast growth, partly organic, partly through merger, has come at the expense of efficiency. It may have the highest growth prospects but it also has considerable work ahead to become agile. It could also have the most at risk as its core domestic market faces new competition while long-haul performance continues to lag.
The New Year 2015 welcomes in a new Alitalia as Alitalia CAI becomes Alitalia SAI on 01-Jan-2015, having completed an ownership change in which Abu Dhabi's Etihad Airways takes a 49% stake, adding to its investments in other European carriers including Aer Lingus, Air Serbia, airberlin and Darwin/Etihad Regional.
But 2015 will also witness a record amount of seats offered between Italy and Gulf hubs as Alitalia and Etihad grow flights to Abu Dhabi under their partnership, while Emirates and Qatar make their own additions. There will be approximately 1,200 more seats a day between Italy and the Gulf in 2015 compared to 2014, for a total of over 5,100 seats a day.
Alitalia and Etihad will add more seats than they have in the past while Emirates and Qatar, so far, will have their highest growth year in Italy since 2012. In the space of four years the Italy-Gulf market will have doubled from 840,000 seats in 2011 to a projected 1.9 million in 2015.