Industry Monitor

The EUROCONTROL bulletin on air transport trends

Issue N°173. 01/06/2015

 European flights increased by 1.7% in April EUROCONTROL statistics and forecasts 1 compared with April last year and were above the high forecast. Preliminary data for May Other statistics and forecasts 3 show a 0.5% increase in flights on May 2014.  Top nine European airlines listed in this Passenger airlines 3 bulletin recorded €0.8 billion operating losses during the first quarter of 2015, a 33% Airports 6 improvement on the same period in 2014. Regulation 7  Oil prices were up slightly to €59 per barrel in May. Financial results of airlines 7

Oil 8

Fares 8

EUROCONTROL statistics and forecasts

European flights (ESRA – EUROCONTROL Statistical Reference Area) increased by 1.7% in April 2015 compared with April 2014 and were above the high forecast (Figure 1). The traffic increase accelerated in April thanks to the introduction of the airlines summer schedules at the end of March. Preliminary data for May show a 0.5% increase in flights on May last year.

The traditional scheduled segment moved to the positive side with an increase of 1.1% in April (vs. April 2014) from a monthly average decrease of 1% since the beginning of 2015. The low-cost segment growth slowed down compared to the beginning of this year and went from +8.4% in March to +4.8% in April. The charter segment reduced its decrease to -1.8% from -9% in March. The business aviation and all-cargo segments were down -3.6% and -0.3% respectively.

Figure 2 lists the twelve states which contributed most to the growth of local traffic (excluding overflights) in Europe in April (vs. April 2014). Germany was the top contributor with 214 extra flights per day thanks to a strong domestic flow, recovering from Lufthansa’s strikes in April 2014. At the other end of the scale, four states reduced their contribution to the network with France removing 91 daily flights from the network due to industrial action impacting its domestic flows. Full detailed statistics on flights are available in STATFOR dashboard1 (EUROCONTROL, May).

1 STATFOR Interactive Dashboard (SID) Industry Monitor. Issue 173. 01/06/2015 Page 1 © EUROCONTROL 2015

Figure 1: Monthly European Traffic and Forecast.

Figure 2: Main changes to traffic on the European network in April.

Based on preliminary data from airlines for delays from all causes 40% of flights were delayed on departure (>= 5 minutes) in April 2015, this was an increase of 8 percentage points on the same month in 2014; the main delay reasons being adverse weather conditions at Amsterdam, Copenhagen, Frankfurt and Vienna along with an aircraft incident at Istanbul Atatürk. The average delay per flight increased to 10 minutes with reactionary and airline delay increasing respectively by 0.9 and 0.2 minutes. Airline reported ATFCM delays increased by 0.9 minutes to 1.8 minutes (Figure3) (EUROCONTROL, May).

Industry Monitor. Issue 173. 01/06/2015 Page 2 © EUROCONTROL 2015

Breakdown of all-causes delay per flight Percentage of flights delayed on departure

Figure 3: Delay statistics (all-causes, airline-reported delay – preliminary data for April 2015).

Other statistics and forecasts

IATA reported that European scheduled passenger traffic (RPK) increased by 5.2% in March 2015 year-on-year. Capacity was up 3.4% and the total passenger load factor was 79.8% (IATA, 6 May).

ACI reported overall passenger counts at European airports to be up 5.5% in March 2015 compared with the same month a year ago whereas overall aircraft movements increased by 2.3%. During the first quarter of 2015 (vs. same quarter last year), overall passenger counts at European airports were up 5.2% with overall aircraft movements up 1.6% (ACI, 7 May).

Passenger airlines

Capacity, costs and jobs

Irish regional CityJet will stop flying from Cardiff to Edinburgh and Paris, effective 30 June. The airline blames Cardiff airport’s decision to reportedly allow Flybe to serve these two routes in direct competition with CityJet. Flybe is said to open a new base at Cardiff and launch eight new routes in June (CityJet & walesonline, 18 May).

Ukrainian regional YanAir resumed its scheduled operations in May i.e. flights from Kiev to Batumi, Tbilissi, Odessa and from Odessa to Batumi. The airline suspended scheduled service last October due to low demand (YanAir, May).

Air Malta and Turkish Airlines are reportedly in talk over a strategic partnership which could include part or full privatization of the Maltese carrier (Times of Malta, 17 May).

The Irish government has agreed to sell its 25% stake in Aer Lingus to IAG Group which enables the latter to launch its bid for the Irish carrier. The decision is based on IAG’s commitments relating to protecting jobs, new transatlantic services and routes to Ireland from Heathrow (Department of Transport Ireland, 26 May).

Figure 4: Main carriers’ traffic statistics.

The Portuguese government is negotiating the sale of a 61% stake in TAP with two bidders, Azul Linhas Aéreas Brasileiras and Avianca Holdings (Columbia). Azul proposal includes 53 new aircraft for TAP whereas Avianca would deliver 12 new Airbus aircraft and renew the Portugalia fleet with Embraer aircraft. Privatization of Portugal’s flag carrier was initiated in 2011 but potential bidders did not meet the financial conditions. (Lusa Agência de Notícias de Portugal, 22 May).

Air France has detailed its Perform 2020 restructuring plan (covering the 2015-2020 period) which focuses on five key levers: 1. Making the airline the long-haul European network on departure from Europe based on its Paris CDG hub, 2. Establishing a dense domestic point-to-point network under Hop! Air France, 3. Making its low-cost Transavia the leader on departures from France, 4. Ranking among the world’s top five in terms of cargo activity, 5. Becoming a global maintenance and catering player (Air France, 30 April).

Alitalia will not renew its partnership with Air France-KLM concluded in 2009 and consisting of the coordination of passenger services by the three carriers between both Italy and France and Italy and the Netherlands and beyond, along with the marketing, sales and distribution of Alitalia Cargo belly services undertaken by Air France-KLM. These agreements are no longer beneficial to Alitalia’s new turnaround plan and its largest stakeholder, Etihad Airways which aims at making the airline return to profit in 2017 (Alitalia, 19 May).

TUI Group will rebrand five of its airlines as TUI; these concern Arkefly, Jetairfly, Thomson Airways, TUIfly and TUIfly Nordic. Its subsidiary Corsair is not included in the rebranding. (TUI Group, 13 May).

Start-up Limitless Airways, Croatia, launched operations on 23 May in cooperation with Scandjet Travel. The airline operates two routes from Rijeka (Croatia) to Gothenburg and Kokkola (Finland) with one airbus A320 aircraft (Limitless Airways, 23 May).

Figure 5: Main carriers’ load factors.

Routes, Alliances, Codeshares

Low-cost Jet2 will launch 12 new routes in summer 2016 from Edinburgh to Antalya, Dalaman Crete, Kefalonia, Zakynthos, Paphos, Larnaca, Rhodes, Gran Canaria, Lanzarote, Tenerife and Vienna (Jet2, 20 May).

Wizz Air will open a new base at Debrecen (Hungary) with one A320 aircraft and three new routes to Paris Beauvais, Charleroi an