24 may, 2018 aviation markets a brief outlook for corporates...jetstar airways 99 all nippon airways...

24 May, 2018

Share your thoughts #CAPAEvents

Aviation MarketsA Brief Outlook for Corporates

.

Melbourne

Share your thoughts #CAPAEvents 24 May, 2018

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


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


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.


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


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.


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


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


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


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.


Boeing 777x

Source: Boeing

The romance of flight has never gone away


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24 may, 2018 aviation markets a brief outlook for corporates...jetstar airways 99 all nippon airways...

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