Issue N°132. 31/08/11 Industry Monitor The EUROCONTROL bulletin on air transport trends European flights increased by 1.7% on July 2010, EUROCONTROL statistics and forecasts 1 faster than forecast. Other statistics and forecasts 2 IATA reported that scheduled passenger traffic Passenger airlines 3 in Europe was up 8.9% in June 2011 compared to Aircraft manufacturing 6 the same period last year. Financial results of airlines 7 First Boeing 787 Dreamliner to enter scheduled Environment 8 service will be delivered to All Nippon Airlines Fares 8 (ANA) on 26 September. Regulation 9 Oil prices in August up to $111/barrel. Oil 10 EUROCONTROL statistics and forecasts European flights increased by 1.7% in July. The actual growth is just above the central forecast range for July 2011 (Figure 1). The charter segment recovered to just 5% below July 2010 volumes while low-cost grew by 1.6% and traditional scheduled by 3.1%. Preliminary data for August show growth at 1.6%, which is within the forecast range. Based on preliminary data for delay from all causes, 46% of flights were delayed on departure in July, this was a 6 percentage point decrease and at a level similar to the record low seen in 2009. Airline-related delays were a main contributor to primary departure delay. Although this proportion saw a 13 percentage point increase in share of delay minutes compared to July 2010, its contribution to the average delay per flight remained stable as the main change was a reduction in the amount of ATM disruption. (Figure 2). Industry Monitor. Issue 132. 31/08/11 Page 1 © EUROCONTROL 2011 Figure 1: European Traffic. Other statistics and forecasts IATA reported that scheduled passenger traffic in Europe was up 8.9% in June 2011 compared to the same period last year. The weak euro is supporting a strong inbound travel trend and business travel associated with growing exports. Load factors for the region stood at 80.6%, the second highest among regions (IATA, 28 July). IATA reported a growth of 9.4% in premium passenger traffic in Europe for the first half of 2011 compared to the same period last year. Growth across the North Atlantic and on Europe-Far East markets continue to expand and were up 11.1% and 12.1% respectively. The organization predicted further growth in demand during the second half of the year, although at a slower pace than in the first half (IATA, 16 August). ACI reported overall passenger traffic at European airports to be up 6.8% in June 2011 compared to June 2010 whereas overall aircraft movements increased by 1.5%. Barcelona (Group 1 airport with over 25 million passengers), Istanbul Sabiha Gökçen (Group 2, between 10 and 25 million passengers) and Venice (Group 3, between 5 and 10 million passengers) saw the biggest traffic increases at 23%, 26.9% and 39.5%, respectively (ACI, 5 August). Industry Monitor. Issue 132. 31/08/11 Page 2 © EUROCONTROL 2011 Percentage of flights delayed on departure Primary delay distribution for July 2011 (Primary Delay = 57% (Reactionary Delay = 43%) Figure 2: Delay Statistics (all causes delay – preliminary data for July 2011). Passenger airlines Air France presented more details of its new offer from Marseille with 13 new direct flights as from 2 October in the context of its “provincial bases project” to compete with low-cost airlines (IM 124). The aim is to reduce unit costs by 15% and manageable costs by 30% by having pilots operating on medium-haul routes based in the provinces as well as at its hub in Paris, with the use of a single aircraft type (A320) with departures earlier in the morning and return flights later in the evening as well as turnaround times reduced by 5 minutes at stations. This strategy will be extended in spring 2012 to Bordeaux, Nice and Toulouse (Air France KLM, 11 July). Ryanair to open its 45th base at Manchester from 30th October initially with two-based 737- 800 aircraft and 17 routes and growing to four aircraft and 26 routes by summer 2012 (Ryanair, 12 July). British Airways plans to recruit around 800 new pilots by 2016 thereby increasing by 25% its current strength of 3,200 pilots. With aircraft such as the Airbus A380 and Boeing 787 due to come into service, BA expects a reshuffling of pilots who want to fly its new fleets, leaving gaps in fleets of the company’s existing types (British Airways, 11 August). airberlin launched its “Shape & Size” program; a wide-ranging cost-reduction plan that will cut eight aircraft, reduce capacity by more than 1 million seats in the second half of 2011, cancel unprofitable routes and withdraw from some regional airports (airberlin, 18 August). Thomas Cook Group has launched a "fundamental strategic and operational review" of its UK business as it continues to be hit by the country’s economic situation which had squeezed consumer spending and affected purchases of foreign holidays. The company also said its French business has been hit by the unsettled political situation in North Africa, with an impact on business to Tunisia, Egypt and Morocco. However, its central Europe, northern Europe and German airlines businesses are all continuing to perform well (Thomas Cook Group plc, 12 July). Industry Monitor. Issue 132. 31/08/11 Page 3 © EUROCONTROL 2011 Air Malta is negotiating with unions on measures including a voluntary redundancy scheme designed to cut around 500 staff from its current total of 1,250. As well as reductions in its workforce, Air Malta is targeting cost reductions of €30 million and increases in revenues of the same size (Air Malta, 5 August). Five months after it announced a financial survival plan, Cyprus Airways issued another profit warning informing investors that the loss for the first half of 2011 was expected to be slightly higher compared with that of the same period of 2010. This was attributed to the continuing financial crisis and to the further significant increase in fuel prices (Cyprus Airways, 4 July). The Serbian government called its latest tender to sell national carrier JAT Airways. The most recent attempt failed in 2008, when the government launched a similar process, aiming to sell a 51% stake price at €51 million. JAT Airways made a loss of €16.5 million in 2010 and borrowed heavily to finance its operations. Turkish Airlines already signalled its interest in JAT without putting forward any offer (Serbian Government, 1 August). Lufthansa Group carriers are to introduce a charge for payments made by credit card (Swiss, 3 August). Air Southwest decided to cease all its service by the end of September as a consequence of the announced closure of Plymouth City airport by the end of 2011 (Air Southwest, 14 July). Routes, Alliances, Codeshares, Intermodality Flybe Nordic, the new carrier jointly owned by Flybe and Finnair's acquisition of Finnish Commuter Airlines, will operate 24 regional routes in the 2011-12 winter schedule, including all former Finnish Commuter Airline (Finncomm) routes plus nine new routes, thereby strengthening its position in the Nordic countries and the Baltic area when it begins operations on 30th October. Flybe owns 60% of Flybe Nordic and Finnair 40% (Finnair Plc, 24 August). Meridiana Fly acquired Air Italy and will maintain a strategic orientation on Sardinia and consolidate its position in the main Italian markets, offering both scheduled and charter flights (Meridiana, 18 July). Turkish Airlines to increase its capacity on international routes, including Donetsk (4-weekly), Kiev (12-weekly), Odessa (12-weekly), Washington DC (6-weekly) and Los Angeles (5- weekly) (Turkish Airlines, 25 August). Aegean Airlines and SAS entered into a codeshare agreement allowing Aegean Airlines to offer Copenhagen, Oslo and Stockholm as new destinations in its international network, while SAS can now offer via a transfer in Athens, onward connections to Chania, Heraklion, Kos, Larnaca and Rhodes (Aegean, 11 July). easyJet will serve eight European destinations from its new base at London Southend Airport when it opens in April 2012. The carrier will launch flights to Amsterdam, Alicante, Barcelona, Belfast, Faro, Ibiza, Malaga and Majorca. The airline announced in June that it would base three Airbus A319s at Southend from April 2012 (IM131) (easyJet, 26 July). Ukraine International Airlines (UIA) and S7 Airlines signed a partnership agreement and now operate thrice daily flights from Kiev to Moscow Domodedovo (UIA, 20 July). Industry Monitor. Issue 132. 31/08/11 Page 4 © EUROCONTROL 2011 Figure 3: Main carriers’ traffic statistics. airberlin and Iberia started operating codeshare flights within Europe. airberlin will place its code on Iberia flights to Madrid from Berlin Tegel, Düsseldorf, Frankfurt, Munich, Zurich and Geneva. In return, Iberia will get access to the airberlin domestic route network and connections to Scandinavia via the hub in Berlin (airberlin, 8 July). airberlin and S7 the largest domestic Russian airline have extended their codeshare agreement to include 47 joint routes. The carriers operate codeshare flights from Berlin via Moscow to Irkutsk, Samara, Kazan, Perm, Ufa and Rostov. The extension will include flights from Dusseldorf, Munich, Frankfurt and Hanover to the new Russian destination of Yekaterinburg via Moscow (airberlin, 10 August). Etihad Airways and French railway company SNCF signed a codeshare agreement to provide "seamless air-rail connections" between Etihad flights to and from Paris Charles de Gaulle and 20 French cities (Etihad Airways’ Chief Commercial Official at press conference, 5 July). Traffic statistics: July update Figure 3 and Figure 4 compare July 2011 figures with July 2010 figures. Passenger capacity is measured in available seat kilometres (ASK) and traffic is measured in revenue passenger kilometres (RPK).