24 may, 2018 aviation markets a brief outlook for corporates...jetstar airways 99 all nippon airways...
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24 May, 2018
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Aviation MarketsA Brief Outlook for Corporates
.
Melbourne
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125
120
115Why is this important to you?
140
120
100
80
60
40
20
Barr
el p
rice
($)
10%
8%
6%
4%
Airline operating profit (EBIT)
$
2011 2012 2013 2014 2015 2016 2017 2018 2019
(145
)
Source: CAPA – Centre for Aviation, IATA & Oil-price.net. Note: January 2011 = Index 100
$
Passenger growthProfitLoad factorAverage ticket priceOil barrel price
110
105
100
95
90
85
80
Passenger yield / Load Factor / Passenger growth
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0
20
40
60
80
100
120
2013 2014 2015 2016 2017 2018 2019
$108$99
$54$45
$55
$70
Indicator of possible change
Source: CAPA – Centre for Aviation. Currency = USD
Average Brent Crude Barrel Price (USD)
Closing price yesterday
USD $78.75
AIR NEW ZEALAND ANNOUNCED (15-MAY-18) THEY WILL INCREASE
DOMESTIC FARES BY 5%, INPART DUE TO THE INCREASE IN FUEL COSTS
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Melbourne vs. Sydney – 5 Years
Source: CAPA – Centre for Aviation & OAG
6.8%
4.6%
3.1%
2.1%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
Seat Growth Frequency
Melbourne Sydney
38.5%
42.9%
33.7% 32.1%
16.7%16.2%
32.6%
26.2%
20.6%
0.0%0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
Airline Growth Route Growth Seat Growth Frequency Country Growth
Melbourne Sydney
International
• Melbourne has outperformed Sydney in all measures except domestic airline growth (both saw a net loss of 1 airline).
• International airline growth was one of the strongest measure with 38.5% growth , a net increase of 10 airlines.
• On average Sydney saw larger aircraft with an average of 353 seats compared to 292 in Melbourne.
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North America
Source: CAPA – Centre for Aviation & OAG.
AirlineRoutes One Way Seats in 2018
MEL BNE SYD MEL BNE SYD
Air Canada 1 1 1 35,677 92,578 109,500
American - - 1 - - 104,025
Delta - - 1 - - 104,178
Hawaiian - 1 1 - 44,202 99,802
Jetstar 1 - 1 58,960 94,470
Qantas 2 1 5 234,840 131,022 553,913
United 1 - 3 91,980 - 271,152
Virgin Australia 1 1 1 84,750 105,090 116,616
6 4 14 506,207 372,892 1,453,656
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AIRLINE ORDERS – ASIA PACIFIC
Source: CAPA Fleet Database
LION AIR 453
INDIGO 441
AIRASIA 389
SPICEJET 205
VIETJET AIR 178
CHINA SOUTHERN 149
JET AIRWAYS 148
GOAIR 130
CHINA EASTERN 130
SINGAPORE AIRLINES 114
RUILI AIRLINES 102
JETSTAR AIRWAYS 99
ALL NIPPON AIRWAYS 97
AIR CHINA 85
THE TOP THREE AIRLINES HAVE ALMOST 1,300 AIRCRAFT ON ORDER
10
40
26
Over 40 Asian based airlines have more than 700 aircraft on order have an aircraft on order with the range to fly to Melbourne.
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Regional snapshot
AfricaIATA predicted African
Airlines would post a collective loss
of USD$100m in 2017 with similar for 2018 due to high operating costs, high
taxes imposed on fuel, poor management
practises. Currently supports US$72b in economic activity+ 6.8
million.Stand out is Ethiopian Airlines with new fleet
orders.
GulfQatar Airways accelerates
growth in Asia, investments such in Cathay and Air Italia.
Markets such as North America & Europe Absorb
recent increases Look out for new announcements.
Emirates Fleet Order may not be the right fit but works well
with its strong alliance with Air Dubai.
Strongly Established Brand here in Australia, evolving is
partnership with QFNew Changes with the new
CEO at EtihadImpact of sale withdrawal
from Air Berlin/Alitalia
Europe2017 year of consolidation that wasn’t
2018 clouded by Brexit.Monarch, airberlin and Alitalia went bankruptRyan’s pilot problems consumed a successful
yearEuropean Airlines on track to achieve similar
margins to 2016 records.Top 3 new orders are coming from Turkish Airlines, Wizz Air, and Norwegian Group
Norwegian launched first narrow body long haul routes. Launched is Norwegian Air
Argentina base. Primera Air will be the second European LCC to operate long haul routes in 2018. LH, IAG and Air France KLM biggest
fleets in Europe
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Regional snapshotNorth America
Another solid year but not2017’s levels
Profitability expected to shrinkMany of the regions airlines
havePledged to slash unit costs
growth in 2018.Issues resolved between Bombardier and Boeing.North American Market
capacity projected to grow in 2018 as airlines operating in the
region see a rebound in international markets.
Certain level of comfort around demand levels are robust for
2018 predictions.
Latin AmericaWe are seeing a whole newCrop of LCC’s continuingFull steam ahead expansionAircraft on orderAzul 90GOL 125Interjet 43Volaris 119Viva 39Jetsmart 70Full Sevice carriers with new Fleet on orderAvianca 82Avianca Brazil 76COPA 66LATAM 82Aerolinas Argentinas 12
South East AsiaMost profitable must margins thin 2017 not much improvement for 2018SE strong traffic growth, overcapacity remains a challenge. Fleets grow by 6% in 2017, rate of capacity +traffic evenFaster. Outlook for 2018 is mixed.Significant new fleet orders from SQ & Lion, TG plans. SE Asian carriers projected to take delivering of 200 pa.New long haul destinations in 2017 Scoots’ Singapore-Athens and Norwegian'sSingapore London. Singapore London is now the longest low haul cost route in the world
Chinese airline leadership has undergonerecent changes and their impacts are being
felt. They have no concerns about the role of theGulf super connections seeing their region
as the new global super hubs. Openingup 100 new destinations in the past year. 777x
sales are not an immediate concern as they operatea young Boeing 777-300ER Fleets.
India expects to remain the fastestGrowing major aviation market in
The world. Domestic traffic up18% to 120m passengers by 31 Mar.
Domestic traffic has grown by 75% in 3 years. Fleet expansion plans started
Strongly in 2017 wut Spicejet order for 106Boeing 737 Max. India’s ailrnes are expectedTo induct an unprecedented 124-130 aircraft
In FY 2018/19
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South PacificQantas embarks on a ‘transition year’ for
international; Air New Zealand returns another strong 1H profit as the South Pacific enjoys benign
conditions.Excellent mid year results for QF, with is FF area
delivering exceptional profit.Tiger now full integrated into VAustralia who also
have a very positive outlook for this year.Chinese inbound tourism accounted for
15% of Australia’s arrivals at 1.4m and 11% of NZ’s arrivals at 418,000. Trans Tasman tourism is said
to be their no 1 destination in 2018. Australiahas no less than 8 Chinese carriers flight direct as
ofFeb 2018.Across the rest of the Pacific overall a relatively
Benign conditions project another good year ahead.
40%
31%
18%
6%3%
Australia: Domestic Airline Market Share by Capacity
Qantas Airways Virgin Australia Jetstar Airways
Tigerair Australia Regional Express Airnorth
JETGO Australia Skytrans Fly Corporate
Sharp Airlines Others
81%
17%1%
New Zealand: Domestic Airline Market Share by Capacity
Air New Zealand Jetstar Airways Sounds Air Air Chathams
Source: CAPA - Centre for Aviation. Note: Capacity based on week of 14-05-18
Regional snapshot
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Asia Five more Asian airports reach 60 million annual passengers in 2017. South East Asia will see more rapid growth, low profit margins and intense competition. India will remain the fastest growing major aviation market in the world
Regional snapshot - Asia
Source: CAPA - Centre for Aviation & OAG. Note: Jakarta have not reported 2018 passengers
IATA 2018 Scheduled SeatsBeijing Capital PEK 118,495,337
Tokyo Haneda HND 103,351,993
Jakarta CGK 91,727,307
Hong Kong HKG 82,365,677
Guangzhou CAN 82,266,348
Shanghai PVG 81,207,402
Delhi DEL 79,064,589
Singapore SIN 76,434,794
Kuala Lumpur KUL 72,909,960
Seoul Incheon ICN 72,638,063
Haneda is the only airport in the top ten to not report positive
growth in 2018.
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Boeing 777x
Source: Boeing
The romance of flight has never gone away
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