Route Development

Air Moldova embarking on summer expansion while continuing with Chisinau hub strategy

Air Moldova is embarking on a summer expansion programme in Jun-2012, building upon capacity increases already seen in winter 2011/12. From Jun-2012 the airline will expand across Italy, Ireland and Russia, adding new destinations as well as increasing frequencies to existing destinations as it seeks to build connecting traffic through its hub at Chisinau International Airport.

Air Moldova is the flag carrier of the Republic of Moldova and operates to Eastern and Western Europe but most of the upcoming expansion is focussed on western markets. Since 2011 the airline has begun to focus on establishing Chisinau International Airport as an east-west transit hub and has increased year-round capacity on key routes including Bucharest.

New routes to China to flourish in the next few years

China's leading airports are on the cusp of strong international growth, with several new routes to be launched in the coming 12 to 24 months. Growth will be driven by foreign and local needs: countries will have greater needs to further link with China while locally there will be an increasing propensity to travel among the Chinese population as incomes rise, while high-speed rail expansion will push Chinese airlines to grow internationally, at the same time providing feed opportunities for foreign carriers at the main Chinese gateways.

But growth is not only expected at the main Chinese hubs. Second tier airports can also look forward to increasing air services as the Government supports expansion from these hubs and as the LCC revolution takes hold in North Asia. New carriers across the region will be looking for new route opportunities, fuelling rapid growth at non-congested Chinese gateways. China's own second tier airlines are also looking to expand abroad, mainly within the Asia Pacific region, which will spur development at the provincial capitals across China's vast interior and economic zones.

Birmingham Airport repositioning as a national UK gateway point

In the 1980s and 1990s there was one regional airport in Europe that was notably and successfully aggressive in its attempts to convince government of the value of this genus – Manchester. Since then, Munich has taken the baton, with even better results. Now attention swings back to the UK and to Birmingham Airport, which is going a step further, by attempting to persuade government that it should be the extra capacity provider for the southern part of Britain, rather than one or more of the London airports, which have been told that they cannot have any more runway space. CAPA visited Birmingham Airport to discover what it takes for a mid-ranking (8.6 million passengers in 2011) European airport to assume such a position of responsibility within a national air transport framework that hosts over 220 million passengers per annum through its 40 largest airports.

Poland’s OLT Express plans international expansion

Poland’s OLT Express is gearing up for international expansion with a range of new destinations to be launched from winter 2012/13, tripling its network. The airline will also be almost doubling its fleet in order to serve its new Western European network. The international expansion will be aimed at taking market share from LOT Polish Airlines from secondary cities in Poland which have traditionally been served through LOT’s Warsaw hub.

OLT Express has been in operation since 2001, originally under the name of Jet Air. From winter 2005/06 until mid-2007 the airline operated domestic services for LOT Polish Airlines on low density routes. JetAir’s regional feeder partnership with LOT ended in 2007 and the carrier began to operate services under its own name. OLT Express’ sister carrier, OLT Express Poland, was formerly a Polish charter operator which commenced operations in Apr-2011, serving regional Polish destinations on behalf of tour operators.

New Cameroon national carrier Camair-Co fails to reach first year targets, but continues to grow

Cameroon’s new national carrier Camair-Co has started its second year of operations with the launch of two new international routes from its hub at Douala in Jun-2012, taking its network to 12 destinations, an impressive build-up for just one year of flying.

The Democratic Republic of the Congo capital Kinshasa will join the carrier’s network from 10-Jun-2012 with three weekly flights, marking the first service between the two cities. Camair-Co will follow this with the launch of service to Lagos, Nigeria on 12-Jun-2012, also with three weekly flights.

Rapidly expanding Kenya Airways charts growth with plan to serve every inhabited continent by 2017

Kenya Airways plans to launch its first services to North America, South America and Australia by 2017, making it one of the few carriers to serve every inhabited continent. While these three continents will give Africa's currently fifth-largest airline by seats a global presence, its future is pegged on Asia, with the carrier over the next 10 years planning to launch seven new routes into China, six in the Indian Subcontinent and three across North and Southeast Asia as well as having a growing presence in Europe and the Middle East. It is poised to become Africa's largest carrier.

Growth will be fuelled by Africa's status as a burgeoning market, as well as reliance on partners: Kenya Airways will open routes to SkyTeam member hubs in Xiamen (Xiamen Airlines), Hanoi (Vietnam Airlines), Seoul (Korean Air), Moscow (Aeroflot) and Prague (Czech Airlines). The intercontinental focus follows Kenya's strong emphasis on regional Africa, with the carrier aiming to serve every African nation by the end of 2013. 

Transaero seeks services to France and Italy following expanded bilateral agreements

Transaero is continuing to encroach on Aeroflot’s territory with the recent expansion in capacity as part of revised bilateral agreements between the Russian Federation and Western Europe. Traditionally, Aeroflot, as the Russian flag carrier, was the only airline allowed to operate key international routes from Moscow, however, this is beginning to change with expanded bilateral air services agreements with other nations that allow for a second carrier to compete on particular routes. Most recently Russia’s Federal Air Transport Agency held negotiations with Italy and France for the liberalisation of air services, which will see each country allowed to have a second carrier compete on key routes.

GMG Airlines suspends operations in challenged Bangladeshi aviation industry

The challenges facing the Bangladeshi aviation industry have been further highlighted in the past week with GMG Airlines suspending operations on 30-Mar-2012. GMG plans to restructure its operation to respond to a number of structural challenges in the industry, including rising competition from Middle East airlines. Meanwhile, the situation at national flag carrier Biman Bangladesh Airlines remains fragile, with the heavily indebted carrier facing a further wave of industrial unrest this month. 

International airlines currently hold around two thirds of international capacity to/from Bangladesh. Just under 30 airlines are active in the market, although Biman Bangladesh Airlines remains the largest carrier operating to/from the country with a 28% international capacity share. Despite it being a price-sensitive market environment (which should support low cost carriers), development on this front has been limited and the market remains dominated by full service airlines.

Etihad Airways nears USD1 billion revenue as quarterly growth slightly outpaces capacity

Following Etihad’s first annual profit, the Abu Dhabi-based airline reported revenue jumped 28% year-on-year for the three months to 31-Mar-2012, to a record USD989 million.

The increase corresponds to a 27.4% surge in passenger traffic in the quarter, up by just over half a million passengers, indicating Etihad is growing revenue very slightly ahead of capacity growth. Etihad Airways added new services to Tripoli, Shanghai and Nairobi during the quarter, with passenger numbers reaching 2,360,000.

Pegasus focuses on Eastern Europe and rapid fleet expansion as Turkish economy grows

Turkey’s second largest carrier, Pegasus Airlines, is steadily expanding its network with a focus on nearby Eastern Europe as demand in the Turkish market continues to grow rapidly. Based at Sabiha Gökçen International Airport in Istanbul, the privately-owned airline operates an extensive European and domestic Turkish network while also offering some services to the Middle East and Central Asia. Until recently Pegasus’ focus has been primarily on its domestic Turkish and international routes to Western Europe, but this is beginning to change. Eastern Europe is becoming the airline’s main focus with a number of new destinations added in recent months.

UPS takes long view of Europe in making its long-awaited run at TNT

UPS believes now is the time to seize an opportunity to buy TNT Express to significantly bolster its competitive stance in Europe. UPS assures despite Europe’s shaky economic state, the continent is a growth vehicle for the company, and believes it can capitalise on TNT’s vast European road network. UPS also gains key access to the powerhouse of Brazil, and remains confident of TNT’s success in turning around its operations in the country.

The proposed USD6.8 billion purchase of TNT by UPS is the largest acquisition in its 105-year history, and pairs well the recent investments UPS has made in expanding its Worldport hub in Louisville, Kentucky; completing a USD200 million expansion project at is Cologne, Germany hub set for completion in 2013; the 2010 opening of its intra-Asia hub in Shenzhen and the 2008 opening of its Shanghai hub, UPS CEO Scott Davis tells investors. TNT Express’s air hub is located at Liege, Belgium.

Even with record profit Jazeera Airways stays on its new course of limited growth

What a difference two years can make. After a dismal 2009 and 2010, Jazeera Airways Group has spent the past 24 months undergoing one of the most comprehensive restructuring and turn-around programmes in the industry, transforming its results from deep losses to record profits and marking out a clear path for a sustainable future, aided by its higher-margin Sahaab leasing division that generated 52% of profits in 2011.

Following expansion and development since the carrier launched in Oct-2005, Jazeera had been forced to abandon its second base at Dubai and was struggling in its home market at Kuwait. The local market, opened up by the Kuwait government with its open skies policy, was characterised by overcapacity, low load factors and stagnant yields. During 2009, 44% of all seats operating into Kuwait were unfilled. In 2010, 51% were empty.