Air France

Natural resources and economic growth draw Turkish Airlines to Africa

Turkish Airlines’ bullish African expansion plans will see the carrier launch service to several destinations in 2012 and upgrade many existing routes to twice daily. The carrier’s focus for 2012 is on expanding in emerging markets, primarily Africa, as further network expansion in the US is on hold and plans for launching service to Australia will likely not materialise until at least 2013.

Turkish currently operates 18 destinations in Africa, including Misrata in Libya which was launched in Dec-2011. Turkish CEO Temel Kotil told CAPA in Dec-2011 that the carrier plans to launch in 2012 Abuja and Kano in Nigeria; Kigali in Rwanda; Abidjan in Cote d’Ivoire; and Mogadishu in Somalia.

The carrier has since also announced plans to launch in 2012 Kinshasa in The Democratic Republic of the Congo, which could give Turkish an African network of 24 destinations by the end of this year.

British Airways/IAG with bmi looks to re-establish world leadership – and long term survival

It can be a fine line between survival and success, just as the blowtorch of a threatened existence provides a powerful motive to pursue ambitious goals.

Last month’s International Airlines Group (IAG)/British Airways move on bmi is only one more piece in the strategic kaleidoscope opening out in front of the Group Chairman, Willie Walsh. The world is his oyster at present. Answering a question following the bmi purchase announcement, Mr Walsh said that despite the uncertain economic environment that Europe’s politicians have created, this was a time of opportunity. His airline is well placed now to capitalise and, as bad news for others spells bargains in the marketplace, the time could well be ripe. In the process, London Heathrow Airport is firmly in the spotlight as Virgin Atlantic also remains a sale possibility. Yet for BA and all of its major rivals, the elephant in the room remains how to service shorthaul network connections profitably.

Airlines and airports feeling impact of global economic weakness with continued freight pressures

Airlines and airports are feeling the impact of the current global economic weakness and declining consumer spending in Europe, which is having a noticeable impact on air cargo volumes. Cargo traffic, which generated USD66 billion in revenue in 2010, has declined every month since May-2011, according to IATA upon the release of its Oct-2011 traffic results, with a 4.7% year-on-year reduction in cargo demand in Oct-2011 amid reduced manufacturing confidence and businesses switching to slower modes of transport.

“Cargo is the story of the month. Since mid-year the market has shrunk by almost 5% and this is far greater than the 1% fall in world trade. Air freight is among the first sectors to suffer when businesses confidence declines,” IATA director general and CEO Tony Tyler said. Meanwhile, Boeing CEO Jim McNerney separately stated the company has seen a softening of freight demand in recent months, describing the freight market as a “watch item”.

Air France-KLM restructuring to continue as 3Q earnings fall sharply

Air France-KLM plans to expedite and intensify restructuring efforts as the group, Europe’s second-largest airline by revenue, struggles under its debt burden and misses earnings targets. The group, the worst performing of Europe’s big three network carriers, reported a steep slide in profitability in the seasonally-strong fiscal second quarter (three months to 30-Sep-2011), as passenger numbers and revenue growth failed to keep up with cost gains.

As expected, Air France-KLM’s disappointing second quarter result was accompanied by a downbeat outlook for the remainder of the year, with an operating loss expected in the current fiscal third quarter and for calendar 2011.

easyJet pushes further into France, throwing down the gauntlet to Air France

easyJet has announced plans to open two new and permanent bases in France, at Nice and Toulouse, which the LCC says will be operational by summer 2012. The carrier will base two A319 aircraft each at the airports, which will be the carrier's 21st and 22nd network bases, as part of efforts to strengthen its French domestic and pan-European network.

easyJet’s moves into provincial France mirrors those being made by national carrier Air France, which is desperately seeking to turnaround its loss-making short-haul business by pushing short-haul capacity out of Paris. easyJet’s plan could be a major headache for the French flag carrier as it aims to cement its dominance in regional France. As easyJet noted, with such a low LCC penetration, relative to neighbouring countries, the LCC onslaught is unlikely to ease anytime soon.

Global aviation focal point: Bangkok, Singapore and the role of the Star Alliance

Southeast Asia is steadily becoming the focal point of global aviation. When headed for Southeast Asia, most travellers fly to/from or via one of two cities: Bangkok or Singapore. And they are most likely to do so on a Star Alliance member carrier. Recently CAPA reviewed the world’s top routes and found that the rankings confirmed the rise of Asia as the largest, and fastest growing, aviation market. Using CAPA’s Route Analyser Tool, we will now consider the most travelled routes between different regions and how traffic flows are concentrated – or not – on these sectors. First the seats available between Europe and Southeast Asia is reviewed.