Setting the scene:
The European market
CONNECT – Vilnius
Monday 14 March 2016
Ralph Anker
Chief Analyst
anna.aero
What’s coming up …
• Developments in Europe 2014-2016 • Passenger demand by country 2015
• European trends in S16
• Baltic states and airBaltic • LCC trends
• easyJet, Ryanair and Wizz Air
• Exchange rates • GDP forecasts • Conclusions
2
Developments in Europe 2014
• Legacy carriers still struggling for profitability
• Etihad’s involvement in European carriers
– Aer Lingus, Air Serbia, airberlin, Alitalia (pending)
• Ryanair opens new bases including Athens (ATH), Brussels
(BRU), Lisbon (LIS) and Rome (FCO)
• easyJet opens new bases in Hamburg and Naples • Vueling grows outside of Spain (turns 10 on 1 July) • Norwegian’s long-haul expansion with 787s • germanwings completing Lufthansa network transfer • Wizz Air up to 20 bases (10th birthday celebrated) • Turkish Airlines still growing at IST
– Growing secondary hub at SAW (taking on Pegasus)
3
Developments in Europe 2015
• Cheap fuel!!! • Many legacy carriers still struggling for profitability
• Alitalia rescue by Etihad Airways approved
• Lufthansa/germanwings/Eurowings evolution • IAG trying to acquire Aer Lingus
• Gone: Cyprus Airways, eurolot, Air Lituanica, Estonian Air
• Mixed response to growth of MEB3 carriers • Ryanair new bases in Berlin SXF, Bratislava, Copenhagen
and Ponta Delgado
• easyJet new bases in Amsterdam, Porto • Wizz Air new bases in Debrecan, Kosice, Lublin
• Turkish Airlines still growing – over 240 routes
4
Developments in Europe 2016
• Fuel even cheaper!!!
• Many European legacy carriers making money, but …
– IAG doing very well, now including Aer Lingus
• Ryanair’s new bases in Belfast, Bucharest, Corfu,
Hamburg, Ibiza, Milan MXP, Nuremberg, Santiago de Compostela, Timisoara
• easyJet’s new bases in Barcelona and Venice • Transavia’s new base in Munich • Wizz Air’s new base in Iasi
• Formation of A4E “alliance” against aviation taxation
• Still no decision on London runway … • … Berlin’s “new” airport still not open
5
European airport traffic 2015
Change in total annual passengers across all airports
35% 30% 25% 20% 15% 10%
5% 0%
-5%
-10% -15%
All countries: +5.0% to 1.9 billion
6
FIGUST countries 2015
Country
UK
Airport pax % vly >1m*
254.7m 216.5m
207.4m
181.4m 170.6m
156.8m
+5.5% 20 (-1) +3.8% 17 (+1)
+5.9% 20 (+1)
+9.3% 17 (+2) +3.5% 17 (+1)
+4.3% 23
Germany
Spain
Turkey France**
Italy
*Number of airports with more than 1 million annual passengers **Includes Basel-Mulhouse (BSL) airport.
Source: UK CAA, ADV , Aen a, www.aeroport.fr, Assaeroporti, DHMI
7
Top 15 intra-European international pairs
Change in monthly one-way seat capacity Jun16 v Jun15
(Monthly one-way seat capacity in June 2016 - millions)
- -10%
- -5%
- 0%
- 5%
- 10%
- 15%
19.0%
20%
UK - Spain (2.446m)
9.4%
10.1%
Germany - Spain (1.559m) Germany - Italy (0.892m)
Germany - Turkey (0.810m)
UK - Italy (0.797m)
-6.8%
12.6%
1.8%
UK - Germany (0.784m)
UK - France (0.694m)
13.8%
6.3%
6.6%
Spain - Italy (0.676m)
Spain - France (0.658m)
UK - Ireland (0.637m)
10.4%
5.6%
France - Italy (0.625m)
UK - Netherlands (0.537m)
UK - Greece (0.528m)
7.8%
9.5%
5.2%
6.5%
Germany - France (0.469m) Germany - Greece (0.444m)
8
Top 14 European domestic markets
Change in monthly seat capacity (Jun16 v Jun15)
(Monthly seats in June 2016)
- -20%
- -15%
- -10%
- -5%
- 0%
- 5%
- 10%
- 15%
- 20%
6.2%
Turkey (5.317m)
1.6%
Spain (3.789m) Italy (3.456m)
-0.7%
13.0%
Germany (3.217m)
France (2.918m)
0.8%
-18.7%
Russia (2.744m)
0.5%
United Kingdom (2.167m)
Norway (2.050m) Greece (1.032m)
-4.1%
13.9%
10.9%
Sweden (0.948m) Portugal (0.519m) Finland (0.291m)
Denmark (0.206m)
Poland (0.206m)
16.4%
-2.7%
-9.6%
-0.5%
9
Top 50 Airlines at European airports
Change in monthly seat capacity
Source: OAG Schedules Analyser for June 2016 and June 2015
45% 40% 35% 30% 25% 20% 15% 10%
5% 0%
-5%
-10% -15%
Total all carriers: +4.7%
10
Baltic airport traffic 2001-2015
Annual passengers (millions)
12 11 10
9
Palanga (PLQ)
0.75
2.17
Kaunas (KUN) Tallinn (TLL) Vilnius (VNO) Riga (RIX)
0.72
2.02
0.69
1.96
0.83
2.21
0.87
1.91
3.33
5.16
8
0.81
1.38
0.41
1.81
2.95
4.81
2.66
4.79
7
0.46
1.35
0.39
1.73
2.20
4.77
1.71
5.11
6
1.37
4.66
2.04
3.69
1.54
1.30
4.07
5
1.72
3.16
1.40
4
1.45
2.49
3
1.28
1.87
1.00
2
0.72 0.72
0.71
0.96
1.06
0.61 0.64
0.63
0.57 0.58
0.62
10
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
11
Baltic airport seasonality
Monthly passengers in 2015
600,000 550,000 500,000 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000
50,000
0
Riga Vilnius Tallinn
- Jan
- Feb
- Mar
- Apr
- May
- Jun
- Jul
- Aug
- Sep
- Oct
- Nov
- Dec
12
Top 15 airlines from Baltic airports in 2015
Departing seats
(% change versus 2014)
- 0
- 500,000
- 1,000,000
- 1,500,000 2,000,000
2,249,330
2,500,000
airBaltic (-0.8%)
Ryanair (+11.1%)
1,507,842
819,360
Wizz Air (+39.8%)
425,846
405,472
Estonian Air (-9.0%)
Lufthansa (-4.1%)
312,637
Aeroflot (+51.3%)
286,280
231,922 228,184
150,823 143,285 131,717
96,985
Finnair (+11.3%)
SAS (+42.0%)
Norwegian (+18.6%)
Turkish Airlines (+19.5%)
LOT Polish Airlines (+7.6%)
Avies (+6.0%)
Ukraine Int'l Airlines (+63.3%)
Air Lituanica (-54.9%)
Brussels Airlines (+79.4%)
77,916
55,827
13
Top 15 country markets from Baltic airports
Departing scheduled seats in 2015 (000s)
(% change versus 2014)
- 0
- 100
- 200
- 300
- 400
- 500
- 600
- 700
- 800
- 900
- 1,000
954
947
UK (+10.9%)
Germany (+10.5%)
Russia (-4.2%)
594
577
Norway (+8.9%) Finland (+1.4%)
Denmark (+5.9%) Sweden (+25.9%)
Latvia (+4.0%)
438
374
350
336
314
Italy (-1.3%)
254
Estonia (-8.6%)
227
218
Netherlands (+7.6%)
Belgium (+37.1%)
France (+13.4%)
Lithuania (-19.2%)
Spain (+15.5%)
212
210
201
14
Top 15 airBaltic routes in S16 by ASKs
Weekly one-way ASKs in August 2016 (millions)
[Weekly departures - from RIX unless stated otherwise]
- 0.0
- 0.5
- 1.0
- 1.5
- 2.0
- 2.5
- 3.0
2.76
2.68
London (LGW) [12] Moscow (SVO) [24]
Paris (CDG) [10]
2.20
2.12
Amsterdam (AMS) [12]
Munich (MUC) [12]
Tbilisi (TBS) [5]
1.86
1.54
1.41
1.38
1.28
1.18
Vienna (VIE) [12] Berlin (TXL) [12] Zurich (ZRH) [7]
Tel Aviv (TLV) [3]
1.17 1.17 1.15 1.15
TLL - Amsterdam (AMS) [7]
Barcelona (BCN) [4]
Milan (MXP) [6] Oslo (OSL) [19]
0.99
Copenhagen (CPH) [19]
15
LCCs still growing in 2015 …
pax up 17% pax up 7% pax up 21% pax up 1% pax up 13% pax up 22% to 101.4 million to 69.9 million to 26.3 million* to 25.8 million to 22.3 million to 19.2 million
* anna.aero estimate
Other carriers:
Lufthansa Group (107.7m) [includes Austrian, SWISS, germanwings]
Air France/KLM (89.8m) IAG (BA/Iberia/Vueling) (88.3m) Turkish Airlines (61.2m) Aeroflot (39.4m), airberlin & SAS (both 30.2m)
16
European LCCs
Average weekly route frequency in summer (2006-2016)
12 11 10
9
easyJet (U2) Vueling (VY) Eurowings (4U/EW)
8
Ryanair (FR)
7
Transavia (HV/TO)
65
Jet2.com (LS)
4
Norwegian (DY/D8)
3
Wizz Air (W6)
21
Volotea (V7)
0
- S06
- S07
- S08
- S09
- S10
- S11
- S12
- S13
- S14
- S15
- S16
17
LCCs - % of new routes with competition
In 2013, 2014 and 2015
- 0%
- 10%
- 20%
- 30%
- 40%
- 50%
- 60%
- 70%
- 80%
- 90%
- 100%
52%
53%
50%
Norwegian easyJet Vueling Ryanair Volotea Wizz Air
2013
42%
51%
47%
2014 2015
56%
57%
46%
9%
27%
39%
29%
36% 36%
10%
11% 12%
79%
90%
Spirit Airlines
Southwest Airlines
Allegiant Air
85%
29%
29%
48%
7%
8%
10%
18
PELOCO5 head-to-head competition in S16
Number of competing airport pairs
- 0
- 5
- 10
- 15
- 20
- 25
- 30
- 35
- 40
- 45
- 50
- 55
55
Ryanair v Vueling Ryanair v easyJet
42
34
easyJet v Vueling
23
Ryanair v Norwegian easyJet v Norwegian
Ryanair v Wizz Air
Vueling v Norwegian
Vueling v Wizz Air easyJet v Wizz Air
Norwegian v Wizz Air
22
17
11
7
2
1
19
Smaller markets: Gibraltar (+34%), Morocco (-42%), Egypt (-73%) Recently withdrawn from Russia, Tunisia
20
New country market: Montenegro (Tivat); Tivat only new destination