WORLD AVIATION Yearbook 2013 EUROPE 1 PROFILES W ESTERN EUROPE TOP 10 AIRLINES SOURCE: CAPA - CENTRE FOR AVIATION AND INNOVATA | WEEK startinG 31-MAR-2013 R ANKING CARRIER NAME SEATS Lufthansa 1 Lufthansa 1,739,886 Ryanair 2 Ryanair 1,604,799 Air France 3 Air France 1,329,819 easyJet Britis 4 easyJet 1,200,528 Airways 5 British Airways 1,025,222 SAS 6 SAS 703,817 airberlin KLM Royal 7 airberlin 609,008 Dutch Airlines 8 KLM Royal Dutch Airlines 571,584 Iberia 9 Iberia 534,125 Other Western 10 Norwegian Air Shuttle 494,828 W ESTERN EUROPE TOP 10 AIRPORTS SOURCE: CAPA - CENTRE FOR AVIATION AND INNOVATA | WEEK startinG 31-MAR-2013 Europe R ANKING CARRIER NAME SEATS 1 London Heathrow Airport 1,774,606 2 Paris Charles De Gaulle Airport 1,421,231 Outlook 3 Frankfurt Airport 1,394,143 4 Amsterdam Airport Schiphol 1,052,624 5 Madrid Barajas Airport 1,016,791 HE EUROPEAN AIRLINE MARKET 6 Munich Airport 1,007,000 HAS A NUMBER OF DIVIDING LINES. 7 Rome Fiumicino Airport 812,178 There is little growth on routes within the 8 Barcelona El Prat Airport 768,004 continent, but steady growth on long-haul. MostT of the growth within Europe goes to low-cost 9 Paris Orly Field 683,097 carriers, while the major legacy groups restructure 10 London Gatwick Airport 622,909 their short/medium-haul activities. The big Western countries see little or negative traffic growth, while the East enjoys a growth spurt ... ... On the other hand, the big Western airline groups continue to lead consolidation, while many in the East struggle to survive. Many legacy flag carriers post losses, while LCC profits grow. Among the LCCs, the two larger established players make record profits with relatively slow traffic growth and the newer, smaller ones have less consistent profits but double-digit traffic growth. All these divides were clear in 2012 and will remain sharp in 2013. IATA reported that European airlines saw passenger traffic (RPK) growth of 5.3% in 2012, driven by long-haul, while cargo traffic fell by 1.5%. Association of European Airlines (AEA) members’ RPKs grew by 4.1%, although passenger numbers grew by only 2.2%. Members of the European Low Fares Airline Association (ELFAA) carried 2 AIRLINE LEADER | MAR-APR 2012 W ESTERN EUROPE CAPACITY SEATS PER WEEK W ESTERN EUROPE PROJECTED DELIVERY DATES FOR AIRCRAFT ON SOURCE: CAPA - CENTRE FOR AVIATION AND INNOVATA | WEEK startinG 31-MAR-2013 ORDER SOURCE: CAPA - CENTRE FOR AVIATION | WEEK startinG 31-MAR-2013 Lufthansa 1,739,886 150 Ryanair 1,604,799 Air France 1,329,819 easyJet 1,200,528 100 Britis 1,025,222 Airways SAS 703,817 50 airberlin 609,008 KLM Royal 571,584 Dutch Airlines 0 Iberia 534,125 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Other 8,249,594 747 777 737 787 ATR A320 A330 0M 2M 4M 6M 8M A350 A380 ERJ170 CSERIES CRJ AN148 W ESTERN EUROPE BREAKDOWN FOR AIRCRAFT IN SERVICE W ESTERN EUROPE MOST POPULAR AIRCRAFT TYPES IN SERVICE SOURCE: CAPA - CENTRE FOR AVIATION | WEEK startinG 31-MAR-2013 SOURCE: CAPA - CENTRE FOR AVIATION 0.2% 5.2% 0.1% 28.8% 9.9% 31.5% Narrowbody Jet A320 Widebody Jet 737 A330 12.3% Regional Jet Turboprop CRJ Small Commercial ERJ170 Turboprop 777 Piston Engine Aircraft 3.7% 747 Military Transport 3.7% 20.6% Others 18.6% 53.8% 3.9% 3.9% 3.9% W ESTERN EUROPE CAPACITY SEATS SHARE BY ALLIANCE W ESTERN EUROPE FLEET SOURCE: CAPA - CENTRE FOR AVIATION AND INNOVATA | WEEK startinG 31-MAR-2013 SOURCE: CAPA - CENTRE FOR AVIATION | WEEK startinG 31-MAR-2013 0.4% 15.7% 5k 4,396 41.5% 4k Unaligned 3k Star 17.0% SkyTeam 2k oneworld 915 oneworld (affiliate) 1k 190 0 In service In storage On order 25.4% 3 7.2% more passenger than in 2011. This pattern of a decline in flights in In spite of this growth in passenger traffic, Western Europe, but positive growth in Eurocontrol reported that the number of flights in Europe fell by 2.4% in 2012. Turkey and Central/Eastern Europe, is The apparent discrepancy is explained by a forecast to continue in 2013... trend towards higher load factors, reflecting tight capacity control, and a higher average number of seats per aircraft. The latter point is In 2012, the Big Three legacy flag carrier groups made moves to explained by the superior growth of high seat restructure their short/medium-haul operations. IAG launched Iberia density LCCs and of long-haul traffic. Express, a lower cost subsidiary to feed its Madrid hub, in spite of a Spain was the weakest major European series of strikes by staff protesting against its lower wage structure. IAG market, with a 6.5% drop in the number of later announced a wider Iberia transformation plan that led to a further flights, and none of Europe’s five biggest series of strikes in early 2013. Lufthansa announced plans to phase the countries saw growth in flight numbers in transfer of all domestic and European flights outside its Frankfurt and 2012. By contrast, Turkey saw strong growth, Munich hubs to its LCC subsidiary Germanwings from summer 2013. followed by Norway, Poland and Ukraine. Air France-KLM proceeded with its French regional bases plan and, in This pattern of a decline in flights in Western early 2013 created a new regional subsidiary Hop, the merger of a group Europe, but positive growth in Turkey and of regional carriers Brit Air, Regional and Airlinair. Central/Eastern Europe, is forecast to continue The Big Three intend to continue with a cautious approach to capacity in 2013, albeit at a lesser rate (Eurocontrol growth in 2013. IAG plans a capacity cut of 1.9% with Iberia capacity forecasts total movements will fall by 1.3%). down 10% and BA capacity up around 2%, fuelled by its first A380 For charter carriers, 2012 brought some deliveries. BA’s launch route for its A380 will be Los Angeles. Air welcome relief as flight numbers recovered France-KLM plans passenger capacity growth of 1.5% in 2013 (+2.4% from the impact of the Arab Spring in 2011, long-haul, -2.1% medium-haul). Lufthansa’s 2013 plan indicates capacity although they are still on a longer-term growth of 1.0% (+2.9% long-haul, -2.6% short-haul). downward trend. Traditional carriers saw a All three either continued with existing cost reduction programmes, fall in their share of flights in 2012 and this or announced new ones. IAG’s bullish target to exceed 2011’s looks set to continue as LCCs are projected EUR485 million operating profit in 2013 will depend on a successful to increase their share further. The main point implementation of the Iberia transformation plan. Air France-KLM of comfort for traditional carriers is that has not set a profit target for the year, noting that 2013 started “amid growth rates to destinations outside Europe an uncertain environment”. It will “maintain strict control over capacity are forecast by Eurocontrol to be higher than and investments” and expects a reduction in unit costs excluding fuel, within Europe. Passenger traffic growth should currency effects and pension charge increases. Lufthansa aims to beat again be positive in 2013, outpacing the change 2012’s EUR524 million operating profit in 2013. in flight numbers. Western Europe is likely to SAS proceeded with its own cost cutting plan, referred to by its CEO be sluggish overall, with passenger growth led as the “final call if there is to be a SAS in the future”. Alitalia turned to by Turkey and the Eastern countries and by its shareholders for a life support loan in early 2013 after almost running LCCs. out of cash at the end of 2012. The Italian flag carrier then parted 2012 was a year of losses for many legacy company with its CEO, while Finnair’s boss left to join a cargo handler. carriers, including IAG, Air France-KLM, SAS Both airlines are seeking replacements. and Alitalia, while Finnair, Aer Lingus and Virgin Atlantic’s long-serving CEO announced his retirement in 2012, the Lufthansa Group managed positive results. to be replaced by Craig Kreeger, formerly SVP customers at American AEA, which mainly represents legacy carriers, Airlines, whose first challenge will be to tackle an expected annual loss estimates a combined 2012 EBIT loss for its for 2012-13. Virgin Atlantic also signed an alliance deal with Delta Air members. By contrast, the principal LCCs Lines after the latter agreed to acquire the 49% stake in Virgin Atlantic Ryanair, easyJet, Vueling and Norwegian Air Shuttle all saw their profits grow. According to IATA, European airlines posted an aggregate In 2012, the Big Three legacy flag carrier breakeven financial result in 2012 (IATA groups made moves to restructure their forecasts this again in 2013). short/medium-haul operations. 4 previously owned by Singapore Airlines. In a busy period for Virgin NORWEGIAN AIR SHUTTLE Atlantic, the carrier is starting short-haul services for the first time in its PASSENGER NUMBERS GROWTH 29 year history, with flights from Heathrow to Manchester, Edinburgh 21% IN 2012 and Aberdeen under the new brand ‘Little Red’ and using aircraft and crew wet-leased from Aer Lingus. Ryanair delivered another record profit in 2011-12 and is set for yet another in 2012-13 after carrying 79.6 million passengers in calendar Emirates. BA got over it soon enough, 2012 (4.2% up on 2011, in spite of cutting capacity and traffic in the sponsoring Qatar Airways’ application to join winter months).