CAPA’s 2016 outlook was against a background of unusually high levels of profitability for airlines.
Articles in ‘Feature’
There is a variety of factors that will influence the evolution of international airport leaders over the next decade.
One of the undoubted game changers in long haul markets will be long haul low cost operations.
Airports are very much back in fashion as investment material, as the air transport industry goes beyond its most recent recuperative phase (airlines are expected to make USD36.3 billion in net profit in 2016, up from USD33 billion in 2015 and many airports reported record passenger numbers in 2015), interest rates remain low and other sectors nowadays have less appeal.
As the year turns, the outlook continues bright for airlines as they prosper from a continuing stagnation in oil prices on the cost side and rapidly building demand in most of the world’s regions, with only the cargo segment disappointing. As margins touch 6% they are at the top end of a cycle the likes of which has not been seen for four decades. While this is bound to bring benefits for airports, for the first time airport infrastructure is actually looking to be less of a gambling certainty than are the airlines.
That the Middle East’s ‘Big Three’ (ME3)of Emirates Airline, Qatar Airways and Etihad Airways have made a huge contribution to the gravitation of world aviation towards the Gulf region is indisputable – although Turkish Airlines is increasingly challenging that preeminent role. But while most of the attention is on how the ME3 have adversely affected traffic at the established global hubs, mainly in Europe and potentially so in North America (which occasionally leads to wars of words with western airlines and governments), their largely beneficial influence over smaller hubs and gateways is often overlooked.
The most surprising part about the 30th anniversary of Emirates Airline in Oct-2015 is that the carrier is, in fact, 30. There are those who might think Emirates is older: after all, it is now the world’s largest international airline. Surely such an achievement must be grounded in history, back in the days of flying boats, the League of Nations and colonial empires.
Now that the industry’s two previously near-autonomous airline categories, LCCs and FSCs, are increasingly feeling the need to connect, the repercussions are being felt at every level, by airports, IT providers, government regulators and more.
Even the global alliances are looking at ways of integrating the new models into their systems. Code sharing, partnering, interlining and simply co-operating are all taking on new levels of significance.
Today, definitions of airports’ roles are being stretched, as self-connection between point to point operations becomes commonplace. Airlines have different needs and airports are responding differently, some more effectively than others. As the role of national airlines is redefined, is there a need to reassess the nature of national connectivity?
This report is based on an article published in May-2015, in CAPA's Airline Leader journal for industry CEOs.
Those US airlines and unions who are instinctively protectionist have voiced loud opposition to the advantages given to foreign airports by being permitted to establish US immigration pre-clearance. Predictably the loudest noises were generated when the UAE’s Abu Dhabi Airport was among the first of a new round of authorisations.
Tables of the world’s busiest airports are often published in trade and general media but a more significant statistic is growth rates, for the light they shed on changing trends.