Network Planning 2017
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NETWORK PLAnnING 2017 IN ASSOCIATION WITH NETWORK PLANNING 2017 NETWORK PLANNING 2017 CONTENTS Seattle-Tacoma International Airport: Strong demand keeps profits on upward path 4-5 Top 100 airlines by traffic 6-7 Your Global Gateway Top 30 airline groups by traffic 9 Top 100 airports by traffic 10 -11 Amsterdam Ĉ&IMNMRK Ĉ'EPKEV] Ĉ'ERG»R Ĉ'SPSKRI Ĉ(YFEM Ĉ)HQSRXSR Ĉ*VEROJYVX Ĉ Airport leaders 12-13 +YEHEPENEVE Ĉ,SRK/SRK Ĉ/IPS[RE Ĉ0SRHSR+EX[MGO Ĉ0SRHSR,IEXLVS[ Ĉ Airline start-ups and suspensions 14-15 0SW'EFSW Ĉ1ERGLIWXIV Ĉ1I\MGS'MX] ĈParis Ĉ4YIVXS:EPPEVXE Ĉ6I]ONEZ®O Ĉ7ISYP Ĉ 7LERKLEM Ĉ7LIR^LIR Ĉ8EMTIM Ĉ8SO]S Ĉ8SVSRXS Ĉ:ERGSYZIV Ĉ:MGXSVME Alliance players 16-17 Leading European airports 18 Capacity snapshot – Europe 19 SEA The information contained in our databases and used in this presentation has been assembled from many sources, and whilst reasonable care has been taken to ensure accuracy, the information is supplied on the understanding that no legal liability whatsoever shall attach to FlightGlobal, its offices, or employees in respect of any error or omission that may have occurred. © 2017 FlightGlobal, part of Reed Business Information Ltd 2 | FlightGlobal FlightGlobal | 3 BRIEFING IATA AGM GRAHAM DUNN, LEWIS HARPER, EDWARD RUSSELL, ELLIS TAYLOR & GHIM-LAY YEO CANCUN Resistance tested by external woes Airline leaders came together for the 2017 IATA AGM in the Mexican resort of Cancun, where it was clear that while outside factors continue to cast a shadow across the industry, the sector as a whole remains in good health f a reminder was needed of the have threatened to dent travel I potential for external events to demand. impact the airline industry, de- All of this happened while velopments both immediately news was sinking in that US before and during June’s IATA president Donald Trump was to annual general meeting in Can- withdraw the USA from the Paris cun provided just that. Agreement on climate change, Delegates woke on the raising concerns about its com- morning of 5 June to news that mitment to aviation’s CORSIA Qatar had been diplomatically mechanism. Trump had also isolated and denied airspace NETWORK PLANNING 2017 kicked off a renewed effort to NETWORK PLANNING 2017 access by several neighbouring enforce a travel ban on people countries. That was set to hit from certain Middle Eastern IATA member Qatar Airways’ countries by launching an – ulti- Airline traffic by region “Airlines have been for the carriers in the region at their lowest level for four STRONG DEMAND KEEPS PROFITSBillyPix ON network – as well as those of mately partially successful – adding new capacity. years. other carriers – and threatened to De Juniac: aviation is a great example of globalisation’s benefits challenge in the Supreme Court 9.8% But given the UPWARD PATH 25.9% reduce traffic in a region that was to rulings that blocked his origi- 4.3% strength of demand But IATA has scaled back its projection for North American already showing signs of slowing to be restored as soon as possi- This development came days nal executive order. Total 1.4% we’ve seen, load profits by $2.7 billion on what they were projecting six While relatively little has changed in terms of industry That would mark a third consecutive year of traffic growth in 6,727,056 factors have risen to months ago. North American carriers remain the most growth (see pages 14-15). ble,”profitability said sinceIATA IATA director-general issued its first projection after for 2017,the UKthe wasexcess hit of by 7% a – terrowell aboverist historicFor average an rates. industry One of the already 27.4% new highs in most profitable, for a fifth consecutive year, and at $15.4 billion 31.2% “We are not in favour of bans, Alexandreslightly improved de outlookJuniac it duringoutlined inthe June duringattack, its AGMthe latestmain drivers in ofa theseries high growth grappling in 2015 and with 2016 a was ban lower on personal regions,” says Pearce. would still contribute almost half of industry net profit. and we would like connectivity AGM’sunderscores opening significant press movement briefing. in some ofof the incidents drivers. faresin – asEurope airlines passedthat on electronicsome of the bountydevices of lower (PEDs) in “That’s really one of However, the gap with Asia-Pacific and European carriers is fuel costs through fare cuts. While some price-stimulation Source: World Airline Rankings the key reasons why less pronounced than in the past. Crucially, demand – both passenger and, perhaps even remains, interestingly it is the stronger economic outlook Asia-Pacific Europe North America we see profits doing more unexpectedly, air freight – is much stronger than IATA that is playing a more significant part in driving traffic growth 2,101,934 1,840,733 1,739,107 better than we had That slip in North American profits from the high of 2015 is Profits maintainingoriginally anticipated.their altitude on strongerthis year. travel demand Middle East Latin America Africa originally expected.” driven by higher costs, notably in fuel expenditure – where 661,918 292,184 91,180 there is limited hedging in place – and a tighter labour While relatively little has changed would“I think representthere have the been strongest some quite year significant levelling changes,” out,” IsaysATA is Pearce. factoring “A in worldlot economicsons why growth we of see 2.9% profits for 2017. doing bet- Note: RPKs in millions for top 150 airlines in 2016 Even more notable is market. US carriers also continued to find an upturn in yields in terms of industry profitability ofnotes economic IATA chief growth economist since Brian2011. Pearce. “Tofhe that first is becauseone, This thewould economy represent isthe strongestter than year we of economicoriginally growth expected.” the more positive change for cargo. The seemingly moribund elusive in the first quarter. which is unambiguously positive, is we have seen quite an since 2011. sector sparking into life with a doubling of air freight traffic since IATA issued its first projection improvement“The combination in business of and stronger consumer confidencegrowing and quite a a lot.” expectations to 7.5%. That would mark the highest rate of Notably, it means that the industry, on the whole at least, is for 2017, the slightly improved out- growthreturn of andeconomic still quite activity. substantial And the industry typicallyHigh doeslevels of“T capacityhe combination growth ofin strongerCARGO growth LIFT and still quite air freight growth since 2010 – a year which in part included on course to deliver returns above cost of capital for a third look revealed in June underscores pricewell in stimulationthose conditions. means we are many markets alsosubstantial contributed price stimulation to Even means more we notableare much is more the positive recovering ground from the sharp falls from the financial consecutive year. movement in some of the drivers. much more optimistic about air lower yields. Whileoptimistic IATA about expects air transport,” change says Pearce. for cargo. That seemingly crisis – and 2004 before that. “I think the challenge, and we’ve seen this in the first quarter Crucially, demand – both pas- transport,”numbers, is also says quite IATA an chiefacceleration econo- in costs.airlines The outturn to add moreNot that capacity falling yields dur- are outmoribund of the picture sector altogether. sparked Few into life If the stronger demand and load factor picture was senger and, perhaps more unex- mist Brian Pearce. ing the year, this will be offset by with a doubling of air freight traf- of this year will really depend on the balance of those two airline commentaries in the first-quarter results season failed unexpected, a creeping-up of costs was less surprising. Top 10 airline groups by RPKs pectedly, air freight – is stronger potentiallyBut falling opposing yields forces.” are not out of traffic growth. “Airlinesto mention have continued been yield pressure.fic expectations, to 7.5%. This than IATA originally anticipated. the picture altogether. IATA origi- adding new capacity. But given the would be the highest rate of air “In the first quarter we have seen a rise in unit costs of about IATA now sees airline passenger nallyIATA now expected sees airline a flat passenger yield environ- traffic growingstrength 7.4% in of2017 demand IATA had we’ve originally seen, expected freight a flat yield growth environment since 2010during – a year 5%, so that’s the emerging challenge for airlines. The key American Airlines 359,574m – more than two percentage points higher than expected 2017. But It now expects unit revenues to be down 2% across cost driver is fuel, and that’s particularly evident in the US, UNITED STATES traffic growing 7.4% in 2017 – more mentsix months during ago. 2017. That Itrate now of projectsgrowth would load result factors in 275 havethe risen year. toThat new would be a sixthwhich consecutive in part includedyear of falling recovering but also maintenance costs, labour and also infrastructure,” than two percentage points higher unitmillion revenues more passengers down 2% – the across highest-ever the growthhighs in inannual most regions,”yields, albeit says at a much lowerground level of decline. from the sharp falls from says Pearce. “This is partly the downside of the upturn in Delta Air Lines 342,860m UNITED STATES than expected six months ago. year.passenger “We numbers, have started in absolute to see terms this – andPearce. take global “That’s one of the key rea- the financial crisis – and 2004 economic activity, which has tightened labour markets in passenger levels past the four-million mark. “We have started to see this levelling-out,” says Pearce. some countries and is adding to upward cost pressures.” That rate of growth would result in before that.