IATA criticised (02-May-2024) the increase in the German Government's passenger tax from 01-May-2024, warning it "will weaken the German economy and damage aviation's ability to decarbonise". The tax increased by 19% to between EUR15.53 and EUR70.83 per passenger, depending on the route. IATA stated the tax will make Germany "less competitive in key economic areas such as exports, tourism, and jobs" and will "further affect Germany's air transport recovery from the pandemic, which is one of the slowest in the EU". IATA noted the German Government coalition agreement originally stated revenues from aviation taxes would directly fund production of sustainable aviation fuel (SAF), but claimed that this commitment was broken. IATA stated the tax "makes it harder for airlines to invest in SAF, in a more fuel efficient fleet and other decarbonisation efforts". IATA director general Willie Walsh said the German Government "is also in favour of a European jet fuel tax which will make it even more expensive to do business in Germany or for families to go on holiday". Mr Walsh stated: "The government should be prioritising measures to improve Germany's competitive position and encouraging trade and travel. Instead, they have gone for a short term cash-grab which can only damage the economy's long term growth". [more - original PR]
European airports struggle to claw back passengers; reductions at 56% of airports in 2023 vs 2019
An intriguing presentation by Airports Council International (ACI) at a recent airport conference in Europe is examined in this report, together with some further research undertaken by CAPA - Centre for Aviation.
It reveals what the airport sector would prefer not to acknowledge in what was supposed to be a post-pandemic recovery year: namely, that more than half of European airports that are members of ACI-Europe experienced a continuing shortfall in passenger traffic in 2023 compared to the benchmark year of 2019.
The CAPA - Centre for Aviation research, which measures the Top 5 European airports by passenger numbers against three smaller airports in each of their countries, suggests that in most cases it is, perhaps surprisingly, the primary gateway/hub airports that are struggling to regain even the pre-pandemic status quo, while small regional and especially low cost airports are (in the main) doing quite well.
There are, at the very least, pointers here as to how the air travel business will continue to develop in Europe in the next few years.
Norse Atlantic's new London Gatwick-Cape Town link in northern winter will help reduce summer skew
Norse Atlantic is to launch a three times weekly route from London Gatwick to Cape Town at the start of northern winter 2024/2025, deploying Boeing 787-9 aircraft.
The UK-South Africa market, a duopoly between British Airways (BA) and Virgin Atlantic Airways since South African Airways (SAA) withdrew at the start of the COVID-19 pandemic, will once more experience three-way competition.
Norse Atlantic's entry provides fresh dynamism in a market whose recovery from the COVID-19 pandemic has been weighed down by SAA's exit and lower capacity offered by BA.
For Norse Atlantic, Gatwick-Cape Town will be only its second route outside its core North Atlantic market. The service will be operated by its Gatwick-based subsidiary Norse Atlantic UK, which is scheduled to fly more seats than the parent airline in 2024.
It will help a little in smoothing out the group's heavy reliance on the summer for its scheduled operations.
With Australian airline Bonza halting flights and considering its survival options, the LCC may never get the chance to prove whether its niche business model could have been successful in the longer term.
After struggling to secure enough aircraft to carry out its plans, and making significant network cutbacks, the airline grounded its fleet on 30-Apr-2024 and entered voluntary administration.
As of now, it is unclear whether Bonza will be able to restructure and continue in some form. It certainly faces some major hurdles if it is to do so.
Bonza said that "discussions are currently underway regarding the ongoing viability of the business". The airline said that it was "working as quickly as possible to determine a way forward that ensures there is ongoing competition in the Australian domestic market".
According to local media reports, some of Bonza's five Boeing 737 MAX aircraft have been repossessed by their lessor.
A major question is whether Bonza's current owner - US-based 777 Partners - had the resources, or the appetite, to adequately fund Bonza through its first years of development.
With any newcomer like Bonza, investors have to take the long view and accept a period of weak financial results while it builds to break-even point.
While it was unclear what that break-even point would be for Bonza, the airline is obviously nowhere near the fleet size that would provide the economies of scale to be profitable.
Bonza faced complications in gaining additional leased aircraft, which caused disruptions to its existing and planned network.
This was a major reason behind its current predicament.
CAPA - Centre for Aviation has consistently supported the concept of the privatisation of airports, arguing that it typically brings to the table a mélange of internal and external factors that combine to optimise airport performance generally.
An academic study released in 2022 and updated in 2023, and was prepared in the United States (where there has been very little airport privatisation), has found that those airports where private sector equity funds are invested tend to perform better than their peers across a wide range of operational, infrastructural, financial and performance metrics.
Strangely perhaps, the word 'environment' is only mentioned three times in the report and 'sustainability' not at all. In all likelihood, metrics in those categories will appear frequently in any future revision, because for the foreseeable future sustainability will be very high on the list of what makes an airport attractive to investors and increasingly - to users.
A number of fascinating conclusions were reached in the report, not least that "privatisation consistently leads to better performance only with PE involvement".
CAPA - Centre for Aviation is uncertain about some of the conclusions, but it is undoubtedly the case that this study can serve as a benchmark to attract back private funding to the sector at a time when it needs it most, with M&A activity floundering presently - as it is in most infrastructure sectors.
Western Europe: top 10 aviation nations ranked by capacity, seats per head, local airline share
Western Europe's top 10 aviation markets by 2023 seat capacity divide clearly into the big five - UK, Spain, Germany, Italy and France - and the second tier - Netherlands, Portugal, Greece, Switzerland and Norway.
All but Norway grew double digit rates in 2023, but only Greece, Portugal, Spain and Italy rose above their 2019 capacity.
Germany and Norway were still below 2019 seat numbers by double digit percentages.
In addition to absolute size, examining seats per capita relative to GDP per capita can bring additional insight. Norway and Switzerland lead the top 10 on both, and Portugal, Greece and Spain achieve high seats per capita, in spite of low GDP per capita.
This report also looks at local airline seat share in each of the top 10 Western European markets. Local airlines have more than 30% in nine markets and they lead in seven (Ryanair is the leader in the other three).
Italy stands out as having by far the lowest seat share held by local airlines.
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Calgary: CAPA Airline Leader Summit Americas 2024
CAPA returns to North America in 2024 with the CAPA Airline Leader Summit – Americas. To be held in Calgary (Canada) over 9-10 May 2024, the summit will provide unparalleled insight into the strategic landscape of a region that is of vital importance.
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The leading conference for airport strategy and finance. The community of airport infrastructure and business developers looks forward to re-establishing its home in Miami 2024. GAD Americas returns to Miami 30-31 May 2024.
Airport operation panel – what is the state of best practice and are we prepared for future shocks?
All was not well with aviation in the post-pandemic recovery period, with high-profile delays and cancellations putting a spotlight on the challenges of airport operations. While circumstances are normalising and operations are stabilising, what are the lessons that need to be drawn from the challenges of the last few years?
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How are airports dealing with rapid upticks in demand?
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How are airports collaborating and communicating with their diverse stakeholders – airlines, passengers, ATC providers, regulators, owners and others – to manage their sometimes contradictory requirements?
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What technologies and operational structures are being adopted to ensure efficient communication and coordination, both internally and with external sources?
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What are the best practices that have emerged in dealing with irregular operations and other events?
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Are airports positioned to deal with future operational shocks?
IATA: German passenger tax increase to weaken economy and hamper decarbonisation
Argentina and Ecuador signed (02-May-2024) an MoU to develop an open skies agreement The meeting included representatives from LATAM Airlines, JetSMART, SKY Airline and Aerolineas Argentinas. [more - original PR - Spanish]
CAPA - Centre for Aviation, in a report entitled: 'European airports struggle to claw back passengers; reductions at 56% of airports in 2023 vs 2019', stated (03-May-2024) the majority of European airports failed to grow passenger traffic in 2023, compared to 2019. Comparing the top five European airports by passenger numbers with three smaller airports in each of their countries suggests the primary gateway/hub airports are struggling to regain the pre-pandemic status quo, while small regional and especially low cost airports are doing quite well. International traffic in Europe is growing much faster than domestic, with low cost carriers gaining ground in passengers flown and future capacity. [more - CAPA Analysis]
Lufthansa Group announced (01-May-2024) the first scheduled service with the Lufthansa Allegris cabin from Munich to Vancouver on 01-May-2024. Toronto will be the second Allegris destination from 02-May-2024, which will be served alternately with Vancouver on select flights for "the first few months". As further A350s are delivered, Allegris will also be made available on services to Chicago and Montreal in summer 2024. From late summer 2024, Allegris will be available to Shanghai and San Francisco, which will initially replacing the existing Allegris destinations. From summer 2024, Allegris will be offered for booking for winter 2024/25 with the entire product range. [more - original PR]
MAVCOM: International traffic exceeds domestic for the first time since pandemic in 1Q2024
Malaysian Aviation Commission (MAVCOM) announced (02-May-2024) air traffic recorded a "significant" 16.1% year-on-year increase to 22.6 million passengers in 1Q2024. Growth was primarily driven by international air traffic, which increased 39.9% to 11.9 million passengers. Domestic traffic decreased 2.3% to 10.7 million passengers. Traffic reached 85.5% of 2019 levels, with international recovery at 89.3% and domestic at 81.7%. The share of international air traffic exceeded domestic for the first time since the pandemic. MAVOM stated it is optimistic about the continued recovery and growth of the aviation industry, despite recent cancellations and rerouting of flights due to conflict in the Middle East. [more - original PR]
European Commission (EC) and EU consumer authorities announced (30-Apr-2024) they sent letters to 20 airlines "identifying several types of potentially misleading green claims", following an alert from the European Consumer Organisation. The national regulators involved are Belgian, Dutch, Norwegian and Spanish. The Consumer Protection Cooperation Network (CPC) and the EC stated the misleading practices included:
- Creating the incorrect impression that paying an additional fee to finance climate projects with less environmental impact or to support the use of alternative aviation fuels can reduce or fully counterbalance the CO2 emissions;
- Using the term 'sustainable aviation fuels' (SAF) without clearly justifying the environmental impact of such fuels;
- Using the terms 'green', 'sustainable' or 'responsible' in an absolute way or use of other implicit green claims;
- Claiming the airline is moving towards net zero greenhouse gas emissions or any future environmental performance, without clear and verifiable commitments, targets and an independent monitoring system;
- Presenting consumers with a 'calculator' for the CO2 emissions of a specific flight, without providing sufficient scientific proof on whether such calculation is reliable and without the information on the elements used for such calculation;
- Presenting consumers with a comparison of flights regarding their CO2 emissions, without providing sufficient and accurate information on the elements the comparison is based on.
The companies were invited to provide a response within 30 days, outlining their proposed measures to address the concerns. After receiving the replies, the EC will organise meetings with the CPC network and the airlines to discuss the solutions proposed by the companies. The EC will monitor the implementation of the agreed upon changes. If the airlines involved do not take the necessary steps to solve concerns raised in the letter, CPC authorities can decide to take further enforcement actions, including sanctions. [more - original PR]
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This report aims to benchmark the performance of the world’s major airlines – to understand their relative carbon emission quantity and intensity with respect to passenger and freight transport.