Iceland

WOW Air confirms Iceland is one of Europe's emerging LCC markets

Located in the North Atlantic Sea, the Republic of Iceland's aviation market, like its volcanic geography, is constantly evolving. An increasing number of LCCs are attempting to enter the market. Iceland’s visibility increased significantly in the past few of years - for the wrong reasons - as the volcanic eruptions of the unpronounceable Eyjafjallajökull volcano caused mass-disruption for the European air transportation industry and as the national economy faced meltdown during the global financial crisis.

Aviation in Iceland is in the headlines again. From Jun-2012, a new LCC WOW Air is launching operations from Reykjavik Keflavik International Airport, the country’s main international gateway and home for national carrier Icelandair and Iceland Express, currently the sole LCC in the Icelandic market. WOW Air plans to operate two 158-seat A320 equipment leased from Avion Express, a Lithuanian cargo and charter carrier.

The carrier’s initial network will consist of 12 services to destinations across Europe including Alicante, Basel, Berlin, Cologne, Copenhagen, London Stansted, Lyon, Paris, Stuttgart and Zurich. WOW Air’s first service will be three times weekly Reykjavik Keflavik-London Stansted commencing 01-Jun-2012.

Increasing tourism, economic growth and oil make Uganda an attractive destination

It has been said that if Uganda’s infrastructure were to be improved, its resources could feed the entire African continent. Instead, the nation is one of the poorest and least developed countries in the world. However the potential for further development is undeniably present, and this is what has drawn large international airlines to enter the market. British Airways, Emirates, EgyptAir, KLM and South African Airways have been in the market for years, but it is the entry of Middle Eastern carriers such as Gulf Air and Qatar Airways in Oct-2011 through Dec-2011 that is boosting the nation’s aviation standing.

The country’s main international airport in Entebbe expects to break 1.5 million passengers in 2011 due to these services and is undergoing extensive improvement work to attract more carriers. The Ugandan Government approved the right for foreign investors to develop the airport, which will likely see a consortium of Middle Eastern developers take interest. The country’s designated national carrier, Air Uganda, is improving its offering as well, and is on course to launch domestic and more international services under its turnaround business plan.

Icelandair Group sees strong organic growth in profitable second quarter

Icelandair Group reported strong organic growth in a profitable second quarter (three months ended 30-Jun-2011) despite a 49% year-on-year increase in fuel costs. The carrier stated the outlook looks “generally good” and it is “well positioned” to address challenges ahead, aided by a “sound” balance sheet, “very positive” liquidity and a “strong” competitive position in the market.

Republic reports double-digit 2Q loss with 631% swing

Once the analysts’ darling and a top performer in the regional airline industry, Republic’s fortunes have fallen dramatically since its acquisition of Frontier and Midwest and that is reflected in its second quarter earnings when it posted a USD14.9 million net loss, a 631.1% swing from the USD2.6 million profit earned in the previous corresponding quarter. It joins just American in posting losses for the quarter. The results only served to exacerbate the USD55 million lost in the first quarter.

Iceland’s Grímsvötn volcano: Europe’s new airspace management approach put to the test

The eruption of Iceland’s Grímsvötn volcanco could be the acid test for EUROCONTROL and European air navigation service providers (ANSPs) and the new rules and measures put in place after the last Icelandic volcanic eruption in 2010. A little more than 13 months on from the eruption of the Eyjafjallajokull volcano, Europe’s passengers and airlines will be hoping that the reaction from Europe’s airspace authorities is much more measured than it was in 2010.

Results quietly encourging for aviation, fuel-pinned airfares scare off leisure travellers

With the bulk of the quarter’s reporting done, in the main the numbers are encouraging but one swallow does not a summer make. The aviation industry will have to see a more sustained performance to support evidence of a recovery.