Industry Monitor 173

Industry Monitor
The EUROCONTROL bulletin on air transport trends
Issue N°173. 01/06/2015
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European flights increased by 1.7% in April
compared with April last year and were above
the high forecast. Preliminary data for May
show a 0.5% increase in flights on May 2014.
EUROCONTROL statistics and forecasts 1
Other statistics and forecasts
3
Top nine European airlines listed in this
bulletin recorded €0.8 billion operating losses
during the first quarter of 2015, a 33%
improvement on the same period in 2014.
Passenger airlines
3
Airports
6
Regulation
7
Financial results of airlines
7
Oil
8
Fares
8
Oil prices were up slightly to €59 per barrel in
May.
EUROCONTROL statistics and forecasts
European flights (ESRA – EUROCONTROL Statistical Reference Area) increased by 1.7%
in April 2015 compared with April 2014 and were above the high forecast (Figure 1). The
traffic increase accelerated in April thanks to the introduction of the airlines summer
schedules at the end of March. Preliminary data for May show a 0.5% increase in flights on
May last year.
The traditional scheduled segment moved to the positive side with an increase of 1.1% in
April (vs. April 2014) from a monthly average decrease of 1% since the beginning of 2015.
The low-cost segment growth slowed down compared to the beginning of this year and
went from +8.4% in March to +4.8% in April. The charter segment reduced its decrease to
-1.8% from -9% in March. The business aviation and all-cargo segments were down -3.6%
and -0.3% respectively.
Figure 2 lists the twelve states which contributed most to the growth of local traffic
(excluding overflights) in Europe in April (vs. April 2014). Germany was the top contributor
with 214 extra flights per day thanks to a strong domestic flow, recovering from Lufthansa’s
strikes in April 2014. At the other end of the scale, four states reduced their contribution to
the network with France removing 91 daily flights from the network due to industrial action
impacting its domestic flows. Full detailed statistics on flights are available in STATFOR
dashboard1 (EUROCONTROL, May).
1
STATFOR Interactive Dashboard (SID)
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Figure 1: Monthly European Traffic and Forecast.
Figure 2: Main changes to traffic on the European network in April.
Based on preliminary data from airlines for delays from all causes 40% of flights were
delayed on departure (>= 5 minutes) in April 2015, this was an increase of 8 percentage
points on the same month in 2014; the main delay reasons being adverse weather
conditions at Amsterdam, Copenhagen, Frankfurt and Vienna along with an aircraft
incident at Istanbul Atatürk. The average delay per flight increased to 10 minutes with
reactionary and airline delay increasing respectively by 0.9 and 0.2 minutes. Airline
reported ATFCM delays increased by 0.9 minutes to 1.8 minutes (Figure3)
(EUROCONTROL, May).
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Breakdown of all-causes delay per flight
Percentage of flights delayed on departure
Figure 3: Delay statistics (all-causes, airline-reported delay – preliminary data for April 2015).
Other statistics and forecasts
IATA reported that European scheduled passenger traffic (RPK) increased by 5.2% in
March 2015 year-on-year. Capacity was up 3.4% and the total passenger load factor was
79.8% (IATA, 6 May).
ACI reported overall passenger counts at European airports to be up 5.5% in March 2015
compared with the same month a year ago whereas overall aircraft movements increased
by 2.3%. During the first quarter of 2015 (vs. same quarter last year), overall passenger
counts at European airports were up 5.2% with overall aircraft movements up 1.6% (ACI, 7
May).
Passenger airlines
Capacity, costs and jobs
Irish regional CityJet will stop flying from Cardiff to Edinburgh and Paris, effective 30 June.
The airline blames Cardiff airport’s decision to reportedly allow Flybe to serve these two
routes in direct competition with CityJet. Flybe is said to open a new base at Cardiff and
launch eight new routes in June (CityJet & walesonline, 18 May).
Ukrainian regional YanAir resumed its scheduled operations in May i.e. flights from Kiev to
Batumi, Tbilissi, Odessa and from Odessa to Batumi. The airline suspended scheduled
service last October due to low demand (YanAir, May).
Air Malta and Turkish Airlines are reportedly in talk over a strategic partnership which could
include part or full privatization of the Maltese carrier (Times of Malta, 17 May).
The Irish government has agreed to sell its 25% stake in Aer Lingus to IAG Group which
enables the latter to launch its bid for the Irish carrier. The decision is based on IAG’s
commitments relating to protecting jobs, new transatlantic services and routes to Ireland
from Heathrow (Department of Transport Ireland, 26 May).
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Figure 4: Main carriers’ traffic statistics.
The Portuguese government is negotiating the sale of a 61% stake in TAP with two
bidders, Azul Linhas Aéreas Brasileiras and Avianca Holdings (Columbia). Azul proposal
includes 53 new aircraft for TAP whereas Avianca would deliver 12 new Airbus aircraft and
renew the Portugalia fleet with Embraer aircraft. Privatization of Portugal’s flag carrier was
initiated in 2011 but potential bidders did not meet the financial conditions. (Lusa Agência
de Notícias de Portugal, 22 May).
Air France has detailed its Perform 2020 restructuring plan (covering the 2015-2020
period) which focuses on five key levers:
1. Making the airline the long-haul European network on departure from Europe based on
its Paris CDG hub,
2. Establishing a dense domestic point-to-point network under Hop! Air France,
3. Making its low-cost Transavia the leader on departures from France,
4. Ranking among the world’s top five in terms of cargo activity,
5. Becoming a global maintenance and catering player (Air France, 30 April).
Alitalia will not renew its partnership with Air France-KLM concluded in 2009 and consisting
of the coordination of passenger services by the three carriers between both Italy and
France and Italy and the Netherlands and beyond, along with the marketing, sales and
distribution of Alitalia Cargo belly services undertaken by Air France-KLM. These
agreements are no longer beneficial to Alitalia’s new turnaround plan and its largest
stakeholder, Etihad Airways which aims at making the airline return to profit in 2017
(Alitalia, 19 May).
TUI Group will rebrand five of its airlines as TUI; these concern Arkefly, Jetairfly, Thomson
Airways, TUIfly and TUIfly Nordic. Its subsidiary Corsair is not included in the rebranding.
(TUI Group, 13 May).
Start-up Limitless Airways, Croatia, launched operations on 23 May in cooperation with
Scandjet Travel. The airline operates two routes from Rijeka (Croatia) to Gothenburg and
Kokkola (Finland) with one airbus A320 aircraft (Limitless Airways, 23 May).
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Figure 5: Main carriers’ load factors.
Routes, Alliances, Codeshares
Low-cost Jet2 will launch 12 new routes in summer 2016 from Edinburgh to Antalya,
Dalaman Crete, Kefalonia, Zakynthos, Paphos, Larnaca, Rhodes, Gran Canaria,
Lanzarote, Tenerife and Vienna (Jet2, 20 May).
Wizz Air will open a new base at Debrecen (Hungary) with one A320 aircraft and three new
routes to Paris Beauvais, Charleroi and Malmö, effective 16 December (Wizz Air, 21 May).
Air Serbia and Aegean Airlines have entered into a codeshare agreement on 10 routes. Air
Serbia will place its code on flights from Belgrade to Athens, Dubrovnik, Ljubljana,
Sarajevo, Split and Zagreb while Aegean will place its code on flights from Athens to
Belgrade, Corfu, Iraklion, Larnaca and Rhodes (Air Serbia, 14 May).
Monarch has definitively ceased long-haul and charter flights and moved to a completely
scheduled network of short-haul operations. The airline will launch new routes from London
Gatwick to Salzburg and from Manchester to Geneva for the winter 2015/16 schedule
(Monarch, 8 May).
Austrian InterSky will set up in October a new base in Memmingen (Germany) with a
Bombardier Q300 aircraft and flights to Cologne/Bonn, Berlin Tegel and Hamburg
(InterSky, May).
Germania will reportedly open a base in Rostock for winter 2015/16 schedule with one
Airbus A319-100 aircraft and flights to Las Palmas, Tenerife Sur, Fuerteventura, Hurghada
and Antalya (ch-aviation, 7 May & Rostock Airport, 21 May).
American Airlines has launched two new routes from New York JFK to Edinburgh and
Birmingham, bringing to four the number of routes to the UK; the airline already flies to
Heathrow and Manchester (American Airlines, May).
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Figure 6: Main carriers’ financial results 2015Q1.
Failures
Lithuania’s flag carrier, Air Lituanica which started operations two years ago stopped flight
operations on 22 May. airBaltic has immediately announced the opening of six new routes
from Vilnius to Brussels, Berlin, Paris, Stockholm, Warsaw and Helsinki whereas Wizz Air
will launch two new routes from Vilnius to Stockholm and Billund, effective 14 September.
(Air Lituanica, 22 May, airBaltic & Wizz Air, 23 May).
Low-cost flyvista ceased operations in May due to lack of demand. The airline based at
Tbilissi operated flights to Almaty, Kiev, Moscow and Teheran and launched operations in
August 2014 (flyvista, May).
Traffic statistics: April update
Figure 4 and Figure 5 compare April 2015 figures with April 2014 figures. In addition to the
number of passengers (PAX), passenger capacity is measured in available seat kilometres
(ASK) and traffic is measured in revenue passenger kilometres (RPK).
Airports
Turkish Airlines operated maiden domestic flights from Istanbul Atatürk to new Turkish
airports; Ordu-Gireson on an artificial island in the Black Sea and Hakkari Yüksekova in the
southeastern Hakkari province (Turkish Airlines, May).
Expansion work of the passenger terminal will start at Dubai World Central airport to
increase the current annual passenger capacity of 6 million a year to 26 million as from
2017 when it is completed (Dubai Airports, May).
It is reported that Berlin Brandenburg International Airport will now open in 2017, six years
behind schedule due to a series of technical problems (Reuters, 24 May).
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Figure 7: Brent and kerosene prices.
Regulation
The European Commission has ended a three-year investigation and granted antitrust
approval to the transatlantic joint venture between Delta Air Lines, Air France-KLM and
Alitalia on the grounds that the airlines agreed to concessions on three transatlantic routes
i.e. give up landing and take-off slots at airports for the Amsterdam-New York and RomeNew York routes and allow competitors to offer tickets on their flights on these routes along
with the Paris-New York route (EUROPA, 12 May).
Financial results of airlines
Figure 6 compares the first quarter of 2015 financial results with the first quarter of 2014 for
nine of the top ten European airlines (based on 2014 traffic shares – Alitalia results were
not available). During the January-March 2015 period which is traditionally loss-making for
airlines, IAG Group, Ryanair and easyJet posted profit in operating results. Five airlines
mentioned in this bulletin posted losses in operating results although they managed to
reduce their losses, partly thanks to lower fuel price.
SAS which was the sole airline to post profit during 2014Q1 swung to €72 million losses in
2015Q2 and blamed it to cost increases due to reduced capacity.
The top nine European airlines listed in this bulletin recorded €0.8 billion operating losses
during the first quarter of 2015, a 33% improvement on the same period in 2014 (source:
Company reports).
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Figure 8: Deflated ticket prices in Europe.
Oil
Oil prices were slightly up to €59 per barrel in May. Converted indices for Kerosene and
Brent are shown in Figure 7.
Fares
Deflated ticket prices in Europe decreased by 6.4% in April year-on-year, based on
preliminary values. This is quite below the trend (12-month trailing average) shown in
Figure 8 and reflects seasonal pricing linked to Easter (Eurostat, 16 May).
Note: to eliminate the influence of inflation on euro figures, the ticket price is deflated with a price
index. The STATFOR deflated ticket prices are estimated in 2005 constant euros.
© 2015 European Organisation for the Safety of Air Navigation
(EUROCONTROL)
This document is published by EUROCONTROL for information purposes.
It may be copied in whole or in part, provided that EUROCONTROL
is mentioned as the source and it is not used for commercial purposes
(i.e. for financial gain). The information in this document may not be
modified without prior written permission from EUROCONTROL.
STATFOR, the EUROCONTROL Statistics and Forecast Service
[email protected]
www.eurocontrol.int/statfor
Industry Monitor. Issue 173. 01/06/2015
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© EUROCONTROL 2015