Issue N 127. 23/02/11 Industry Monitor The EUROCONTROL bulletin on air transport trends EUROCONTROL statistics and forecasts 1 5.2% European flight growth in January, but underlying trend is circa 4% due to cancellations in January 2010. Traffic down 30% in Tunisia & 50% in Egypt in late February reflecting political crisis. Oil prices in February climb to over $110/barrel. Other Statistics and forecasts 2 Passenger airlines 2 Aircraft manufacturing 5 Cargo 6 Environment 6 Regulation 6 Fares 7 Oil 7 Tunisia and Egypt turmoil: impact on traffic 8 EUROCONTROL statistics and forecasts European flights were up by 5.2% on the same month last year, although this figure is distorted by the above average number of cancellations in January 2010 due to industrial action and bad weather. 3-4% monthly growth for the month of January is a better indication of the underlying trend. (see Figure 1). Based on preliminary data for delay from all causes, 38% of flights were delayed on departure in January, a big improvement on December 2010 and indeed both a 9 percentage point decrease on January 2010 and also the lowest percentage of flights delayed in January since 2002 (EUROCONTROL, February). (see Figure 2). The new medium-term forecast of flight movements 2011 2017 is for 11.6 million IFR movements in the EUROCONTROL Statistical Reference Area (ESRA) in 2017, 22% more than in 2010. Traffic growth will bounce back in 2011 (above 4%), but with the underlying growth rate a little more than half of this, after allowing for the effects of the ash-cloud, weather and strikes. The average growth rate over the 7 years is 2.9% per year (EUROCONTROL, February). A special summary of the air traffic situation in Tunisia and Egypt over the past weeks is on the back page of this issue. Industry Monitor. Issue 127. 23/02/11 Page 1 EUROCONTROL 2011
Figure 1. European Traffic Other Statistics and forecasts IATA reported that passenger traffic in Europe (RPK) rose 5.1% last year compared to 2009 while freight traffic (FTK) rose 10.8% in 2010 (IATA, 2 February). IATA s forecast 2009-2014 expects international passenger demand in Europe to grow 4.7% per year by 2014 with the fastest growth rate (+11%) in the Russian Federation whereas UK, Germany, Spain, France and Italy will remain in the top 10 largest international markets. (IATA, 14 February) ACI reported that European airports saw a 4.2% increase in passenger traffic in 2010 compared to 2009 whereas total cargo traffic was up by 18.7% with aircraft movements declining by 0.2% (ACI, 3 February). Passenger airlines Capacity, costs and jobs Aer Lingus resolved industrial dispute which had lead to the sacking of up to 180 cabin crew (IM126) by changes to policy on cabin crew roster. (Aer Lingus, 4 February). KLM to introduce new European Business Class from 27/03 onwards, moving from a sixabreast to a four-abreast configuration in 737s business class (KLM, 9 February). Darwin Airline to strengthen its position as a Swiss Regional Airline with the acquisition of Flybaboo s routes from 1 April (Darwin Airline, 27 January) Industry Monitor. Issue 127. 23/02/11 Page 2 EUROCONTROL 2011
Percentage of Flights Delayed Primary Delay Distribution for January 2011 Figure 2. Delay Statistics Finnair plans structural changes in technical services subsidiaries (mainly external, unprofitable aircraft base maintenance work) leading to cut 450 jobs (Finnair plc, 4 February). Alliances Lufthansa subsidiaries Austrian, BMI and Swiss to join transatlantic joint venture this summer as sub-brands of Lufthansa (ATI, 8 February). Routes British Midland International (BMI) to increase its route network with new European (Bergen and Stavanger) and North African (Casablanca and Marrakech) destinations from London Heathrow from April (BMI, 31 January), but to suspend its service between London Heathrow and Glasgow from 27 March, citing BAA s intention to increase by +50% domestic passenger charges at Heathrow from 1 April (BMI, 1 February). Skyways to add six destinations in Scandinavia and northern Europe: Brussels, Berlin, Stavanger, Bergen, Trondheim and Sundsvall increasing its network by 50% from March (Skyways, 31 January). Ryanair is expanding its network with the addition of: 17 new routes to the Greek holiday destinations Kos, Rhodes and Thessaloniki from April (Ryanair, 3 February); 5 new routes from Vilnius to Barcelona, Dublin, London, Milan and Rome from May (Ryanair, 21 February). 4 new routes from Manchester to Alicante, Faro, Madrid and Tenerife from 14 April (Ryanair, 26 January) despite the closure of its Marseille base, 11 temporary new routes to Agadir, Brest, Eindhoven, Fez, Gothenburg, Lille, Marrakesh, Nador, Nantes, Palermo and Tangier during the summer season (Ryanair, 1 February). Industry Monitor. Issue 127. 23/02/11 Page 3 EUROCONTROL 2011
Figure 3. Main carriers traffic statistics. Turkish Airlines to add two new routes connecting Istanbul to Najaf and Mosul in Iraq this year (ATI, 3 February). British Airways to move its London Heathrow-Mauritius service to Gatwick from November as part of a programme to transform Gatwick into a premium leisure hub (BA, 8 February). Codeshares Air Baltic signed a cooperation agreement with KLM including code-sharing of flights between Riga and Amsterdam (Baltic Course, 22 February). Air France has signed a code-share agreement with Rossiya on flights between Paris Charles De Gaulle and St Petersburg (Air France, 7 February). Alitalia and China Eastern signed a code-sharing agreement on the Rome, Beijing and Shanghai routes (Alitalia, 16 February). Traffic statistics: January update Figure 3 and Figure 4 compare January 2011 figures with January 2010 figures. Passenger capacity is measured in available set kilometres (ASK) and traffic is measured in revenue passenger kilometres (RPK). IAG Group (former British Airways and Iberia) released its first consolidated traffic figures and recorded an increase of 6.1% in traffic whereas capacity was up 9.5%. The load factor decreased by 2.3 pp. to 73.7. Premium traffic grew by 7.4% with economy traffic rising by 4%. Cargo traffic and capacity were up 5.8% and 10.9% respectively (IAG, 3 February) Industry Monitor. Issue 127. 23/02/11 Page 4 EUROCONTROL 2011
Figure 4. Main carriers load factors. Air France-KLM s traffic increased by 4.8% and capacity by 3.3%. The load factor reached 79.2%, up 1.1 pp. Cargo traffic and capacity were up by 3.4% and 3.3% respectively (Air France-KLM, 8 February) SAS Group s traffic increased by 5.4% and capacity was up by 8.2%. The load factor was down 1.7 pp. at 63.9% (SAS, 7 February). Ryanair s number of passengers rose by 5%. The load factor increased by 1 pp. to 71% (Ryanair, 3 February). easyjet s passenger numbers were up 19.1% with a load factor at 79.3%, down 0.4 pp. (easyjet, February) Air Berlin recorded a 5.7% increase in the number of passengers transported whereas capacity was up by 0.5%. The load factor at 72.3% was up 3.5 pp. (Air Berlin, 7 February). Turkish Airlines traffic and capacity were up 11% and 13.4% respectively. The load factor decreased by 1.5 pp. to 67.3% (Turkish Airlines, 15 February). Aircraft manufacturing Airbus has decided to increase the production rate for its A330-family aircraft from currently 8 to 10 aircraft a month from Q213 (Airbus, 3 February). Rolls-Royce s civil aerospace division has reported a 20% decrease in its 2010 underlying profit performance resulting from last November s Trent 900 faillure on an Airbus A380 from Qantas Airways (Rolls-Royce, 10 February). Industry Monitor. Issue 127. 23/02/11 Page 5 EUROCONTROL 2011
Figure 5. Carbon prices. Cargo UPS posted a 62% increase in net income for 2010 to 2.54 billion (UPS, 1 February). Cargoitalia reported positive results after its first full year of re-launched operations and will consolidate its position in the US with the introduction of Atlanta services in February (Cargoitalia, 28 January). Environment easyjet is testing a nano-technology coating on eight of its aircraft in order to reduce drag and to increase fuel efficiency (easyjet, 14 February). Alitalia has signed an agreement with Solena (US bioenergy group) to initiate a study on converting biomass from municipal waste into aircraft biofuel (Alitalia, 3 February). Regulation EC Infringement proceedings: Belgium, Netherlands, UK, Luxembourg, Denmark, Sweden, Italy, Cyprus, Ireland, Poland, Portugal, Slovakia and Spain over their bilateral aviation agreements with Russia concerning their allowance of controversial Siberian overflight charges (Europa, 27 January & 16 February). Industry Monitor. Issue 127. 23/02/11 Page 6 EUROCONTROL 2011
Figure 6. Brent and Kerosene prices. Poland over common standards of security at airports (Europa, 16 February). Malta over fuel handling services at Luqa airport (Europa, 16 February). EC has opened a formal investigation under EU state aid rules to examine whether the restructuring plan of Czech Airlines is suitable to restore the company's long-term viability and whether the proposed reduction in activities will be sufficient to off-set any distortive effect of the aid it received (Europa, 23 February). EC launched a probe over a ticket-sale agreement between Turkish Airlines and Lufthansa as well as between Brussels Airlines and TAP Air Portugal to assess whether they are in line with antitrust laws (Europa, 11 February). Fares Ryanair has increased its Q310 average fares by circa 15%, saying that this is in line with its strategy of slower growth and other airlines fuel surcharges (Ryanair, 31 January). British Airways to increase its fuel surcharge on long-haul services from 8 February reflecting the continuing substantial increase in the price of oil (IM125). The short-haul service is not affected (British Airways, 4 February). Deflated ticket prices in Europe decreased by 3.2% in January year-on-year. The rate in December was -1.4% (correction to figure from IM 126) (Eurostat, 28 February) Oil Oil prices closed above $110 per barrel on 25 February (Brent). See Figure 6. Industry Monitor. Issue 127. 23/02/11 Page 7 EUROCONTROL 2011
Figure 7: Traffic from Europe to Tunisia & Egypt Tunisia and Egypt turmoil: impact on traffic Traffic from Europe to Tunisia and Egypt continues to be much reduced in late February (see figure 7, which excludes overflights), some 30% down in Tunisia and 50% down in Egypt, compared to the same period in 2010. There is a suggestion in the data of partial recovery in Tunisia. There are reports that some of the tourist traffic has been diverted to the Canaries, which since the middle of February has seen a jump in traffic growth to around 15%; growth to Turkey is also faster since late January, but it is not clear how much of this is due to the disruption in Egypt and Tunisia. It is further reported that British Airways will suspend its service between London Gatwick and Sharm El Sheikh from the start of May; on the other hand Egyptair hopes to restore its schedule towards the end of the Summer. (EUROCONTROL, February). 2011- European Organisation for the Safety of Air Navigation (EUROCONTROL) This document is published by EUROCONTROL for information purposes. It may be copied in whole or in part, provided that EUROCONTROL is mentioned as the source and it is not used for commercial purposes (i.e. for financial gain). The information in this document may not be modified without prior written permission from EUROCONTROL. STATFOR, the EUROCONTROL Statistics and Forecast Service statfor.info@eurocontrol.int www.eurocontrol.int/statfor The EUROCONTROL Statistics and Forecast Service (STATFOR) is ISO 9001:2008 certified. Industry Monitor. Issue 127. 23/02/11 Page 8 EUROCONTROL 2011