Industry Monitor

The EUROCONTROL bulletin on air transport trends

Issue N°158. 07/01/2014

 European flights slightly decreased in November (-0.3% compared with same month last year) because of a calendar effect. Preliminary data EUROCONTROL statistics and forecasts 1 show a 1.8% increase in traffic for December (vs Passenger airlines ...... 2 December 2012). Average number of daily flights Capacity, costs and jobs ...... 2 in Europe declined by 0.8% in 2013 compared to Routes, Alliances, Codeshares ...... 3 2012 (preliminary data). Traffic statistics: November update 4 Failures ...... 5 Airports ...... 5 The STATFOR team wishes you all the best for Cargo ...... 5 2014! Fares ...... 6

Oil ...... 6

EUROCONTROL statistics and forecasts

European flights decreased by 0.3% in November compared with the same month last year. This decline is entirely due to the extra Saturday in November 2013 compared to November 2012. On a like for like basis, the November traffic would have increased by 0.6%, which would have been in line with the slightly positive monthly growth trend observed since August 2013 (Figure 1). In November 2013, Low-cost growth accelerated from circa 3% during the summer months to above 5% in November. All other market segments declined compared with November 2012. Charter traffic continued to suffer from the downturn in Egypt and was down 6.1%. All-cargo decreased significantly by 6% while the traditional Scheduled carriers and Business Aviation were down 1.2% and 0.6% respectively (vs November 2012). Preliminary traffic data for December show a 1.8% increase on December 2012, leading to a first estimation of a 1.1% decline for European total traffic in 2013 (versus 2012). Removing the leap year effect (2012), European traffic declined by 0.8% in 2013 (EUROCONTROL, December).

Based on preliminary data from airlines for delay from all causes, 30.6% of flights were delayed on departure in November, a figure relatively stable compared to November 2012 (31%). The average delay per movement in November 2013 decreased to 5.9 minutes from 7.6 minutes. Further analysis of the delay reasons shows that this general decrease has been observed through all the main categories compared to November 2012; with significant decreases in: ATFCM Airport delays by 0.2 minutes per flight, ATFCM En-route delays (as reported by airlines) by 0.2 minutes per flight falling to 0.1 minutes (Figure 2) (EUROCONTROL, December).

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Figure 1: Monthly European Traffic and Forecast.

Passenger airlines

Capacity, costs and jobs

Norwegian Air Shuttle signed seven-year commercial partnership with Gatwick to support the airline’s expansion plans in 2014 (IM156). Norwegian is launching transatlantic routes to JFK, Los Angeles and Fort Lauderdale using the B787 aircraft and by Summer 2014, it will have a total of six aircraft based at Gatwick (Gatwick & Norwegian Air Shuttle, 28 & 29 November).

For summer 2014, Norwegian Air Shuttle signed agreements for ensuring charter passengers service from the UK and the Nordics to Spain, Greece, Turkey, Bulgaria, Italy and Cyprus on behalf of TUI Nordic, TUI UK, Thomas Cook Northern Europe (Norwegian Air Shuttle, 19 December).

Following Belle Air’s bankruptcy in November, it is reported that Alitalia and its subsidiary Air One are to take over from the defunct airline on Italy-Albania flights. Air One launched services from Bologna, Verona and Venice to Tirana in December whereas Alitalia will launch service from Bari to Tirana in January 2014 (Balkan Independent News Agency, 11 December).

Europe Airpost will operate its first scheduled passenger transatlantic flights from Paris via Glasgow to Halifax Canada during Summer 2014. The French airline operates mail and cargo services during the night and scheduled and charter services for tour operators during the day (Europa Airpost, 11 December).

Korean Airlines, which already owns a 44% stake in Czech Airlines, sold its option to an additional 34% stake but remains Czech flag carrier’s largest shareholder. Korean Airlines is selling its option to Travel Service, a Czech privately-held charter air company. The transaction still needs regulatory approval (Czech Airlines, 5 December).

Ryanair has reportedly announced that it will stop basing aircraft at Maastricht Aachen Airport from March 2014, even if it will continue to fly from the Dutch airport (dutchnews.nl, 17 December).

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Breakdown of average delay per flight Percentage of flightsdelayed on departure

Figure 2: Delay Statistics (all causes, airline-reported delay – preliminary data for November 2013).

Thomas Cook posted its first full-year operating profit since 2010 as part of its transformation programme. Since 2012, the tour operator cut 2,500 jobs, closed circa 200 shops and sold non-core assets (Thomas Cook plc, 29 November).

TUI Travel posted a 13% increase in full-year operating profit thanks to strong demand for package holidays. TUI said winter 2013/14 bookings met its expectations with 60% of the programme sold while summer 2014 bookings so far reached 13% of the programme (TUI PLC, 18 December).

Turkish Airlines has decided to convert seven of its thirty-five options for A321-200 neo aircraft into firm orders. The aircraft are due for delivery in 2018. The conversion now brings to sixty the number of firm orders for the A321neo the Turkish carrier has placed (Turkish Airlines, 27 December).

After initial announcements at Dubai Airshow (IM157), Emirates Airline and Airbus signed the firm contract for 50 additional A380s. Since the delivery of their first aircraft in July 2008, Emirates’ A380 fleet in operation adds up to 44, being the largest Superjumbo’s fleet in the world (Airbus, 23 December).

Intro Aviation GmbH made Air France a firm offer to purchase Cityjet and its subsidiary, VLM. The transaction is expected to be finalised by the first quarter of 2014 (Air France-KLM, 20 December).

Routes, Alliances, Codeshares

Turkish Airlines and Oman Air signed a codeshare agreement on routes between Istanbul Atatürk and Muscat. Oman Air serves 43 destinations across the Middle East, Europe, Asia and Africa (Turkish Airlines, 3 December).

Norwegian plans to establish a new base in Barcelona as of April 2014, its sixth base in Spain. The airline will launch 4 new routes from Barcelona to Hamburg, Berlin, Warsaw and Sandjeford Torp and base three B737-800 at the Catalonian airport (Norwegian, 28 November).

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Traffic statistics: November update

Figure 3 and Figure 4 compare November 2013 figures with October 2012 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).

Note: IAG monthly pro-forma including Vueling in the baseline. Figure 3: Main carriers’ traffic statistics.

Note: IAG monthly pro-forma including Vueling in the baseline. Figure 4: Main carriers’ load factors.

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Failures

Danube Wings Slovakia, after cancelling all flights as of 20 November 2013 from Bratislaa/Košice, has reportedly suspended all operations in December (Noviny.sk, 13 December).

Air Onix had reportedly its Air Operators Certificate suspended by the Ukrainian Infrastructure Ministry. The Unkrainian airline appealed to the State Aviation Service and hope to resume service from Spring 2014 (Air Onix, 27 December).

Airports

In its report ‘Airport Competition’, IATA said that only 9% of European airports are fully privately-owned while 78% remain fully publicly-owned, preventing effective competition between airports. Since 2010 more than a third of European airports raised their charges compared with only 17% reducing them (IATA, 26 November).

In its interim report, the Davies Airports Commission concluded that there is a need for one additional runway to be in operation in the south-east of the UK by 2030. The commission published a shortlist of three options as follows:

 A third runway at Heathrow to the north-west of the current airport  An extension of Heathrow’s northern runway to allow it to operate as two independent runways  A second runway at Gatwick to the south of the existing runway.

A full report is to be released in the summer of 2015 (UK Government, 17 December).

Spanish Don Quijote airport (aka Ciudad Real airport), deserted since its closure in April 2012, reportedly went up for a one month auction period by its shareholders with a starting price of €100 million (The Telegraph, 9 December).

Cargo

Luxembourg government is to sell its 35% stake in Cargolux to a Chinese investor, Henan Civil Aviation Development and Investment Co (HNCA), pending agreement by the Chinese authorities. National airline Luxair is Cargolux’s majority shareholder with 43.4% (Cargolux, 13 December).

Fares

Deflated ticket prices in Europe remained stable in November year-on-year, based on preliminary values. This is below the trend (12-month trailing average) shown in Figure 5 (Eurostat, 16 December).

Figure 5: Fares - Deflated ticket price in Europe.

Oil

Oil prices remained at €80 per barrel in December. Converted indices for Kerosene and Brent are shown in Figure 6.

Figure 6: Brent and kerosene prices.

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STATFOR, the EUROCONTROL Statistics and Forecast Service [email protected] www.eurocontrol.int/statfor

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