Issue N°129. 29/04/11

Industry MonitorThe EUROCONTROL bulletin on air transport trends

European air traffic increased by 1.7% in March, slightly lower-than-forecast figure.

The European Regions Airline Association reported a 7.4% growth in passenger traffic for 2010.

IATA expects oil prices to be 20% higher in 2011 than in 2010. The share of fuel costs is forecast to increase amongst operating costs in 2011.

is forecast to increase amongst operating costs in 2011.

Oil prices in April climb to $124/barrel. Oil prices in April climb to $124/barrel.

EUROCONTROL statistics and forecasts 1 EUROCONTROL statistics and forecasts 1 Other Statistics and forecasts 2 Other Statistics and forecasts 2 Passenger airlines 2 Passenger airlines 2 Aircraft manufacturing 5 Aircraft manufacturing 5 Regulation 6 Regulation 6 Environment 6 Environment 6 Fares 7 Fares 7 Oil 7 Oil 7 Impact on traffic of events in Tunisia, Egypt, Libya and Japan 8 Impact on traffic of events in Tunisia, Egypt, Libya and Japan 8

EUROCONTROL statistics and forecasts European flights increased by 1.7% in March on the same month of 2010, lying on the low-side of the forecast range. The political unrest in Egypt and Tunisia resulted in a fall off in traffic of about 180 and 25 flights/day respectively whereas the effect in Japan was a decrease of about 15 flights/day (Figure 1& Figure 8). Based on preliminary data for delay from all causes, 32% of flights were delayed on departure in March; this is a 6 percentage point decrease on March last year. Airline-related delays were the main contributor to primary departure delays with 48% share of delay minutes (see Figure 2). Update on traffic between Europe and Tunisia, Egypt, Libya and Japan: see page 9.

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Figure 1: European Traffic.

Other Statistics and forecasts The European Regions Airline Association (ERA) has reported a 7.4% growth in passenger traffic for 2010 and also posted an average 2.5% scheduled passenger growth for its 70 intra-European airlines. Capacity (ASK) increased by 4.1% boosting the passenger load factor up to a record level of 66% in 2010 (ERA, 5 April). IATA reported that economy travel volumes have been on a falling trend since October (2% lost on passenger volumes on economy seats in February compared to October), due to the surging oil and kerosene prices which added to the cost of travel (IATA, 19 April).

Passenger airlines

Capacity, costs and jobs Delta Airlines plans to cut transatlantic capacity by 4% (previously expected to be a 1% drop) during the second half of 2011 as a result of the rise in oil prices (Delta Airlines’ President at J.P. Morgan Aviation & Transportation Defence Conference, 22 March). Air Berlin has completed the integration of LTU International Airways thereby consolidating its flight operations and opening the way to its planned membership in oneworld® (IM122) (Air Berlin, 31 March). British Airways increased its fuel surcharge on long-haul flights on 8 April in reaction to soaring oil prices (IAG, 8 April).

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Ryanair has introduced a €2 levy per passenger to mitigate future flight cancellations and delays under the EU261 passenger compensation regulation, effective 4 April (Ryanair, 15 April).

a €2 levy per passenger to mitigate future flight cancellations and delays under the EU261 passenger compensation regulation, effective 4 April (Ryanair, 15 April). Ryanair is testing reserved seating on two routes, Dublin-Malaga and Dublin-Gatwick, effective from May 16 and intends to role out the reserved seating selectively on other routes, should it be popular with passengers (Ryanair, 19 April).

Ryanair is testing reserved seating on two routes, Dublin-Malaga and Dublin-Gatwick, effective from May 16 and intends to role out the reserved seating selectively on other routes, should it be popular with passengers (Ryanair, 19 April). Norwegian Air Shuttle reports its free in-flight WiFi launched in February on European routes to be a hit with its passengers. The airline plans to have all of its aircraft equipped with WiFi by the end of 2012 (Norwegian, 18 April).

Norwegian Air Shuttle reports its free in-flight WiFi launched in February on European routes to be a hit with its passengers. The airline plans to have all of its aircraft equipped with WiFi by the end of 2012 (Norwegian, 18 April). Virgin Atlantic launched its first long-range twin-engine Airbus A330 with an inaugural flight from Manchester to Orlando. It is the first of 10 aircraft being delivered over the next 2 years (Virgin Atlantic, 2 April).

Virgin Atlantic launched its first long-range twin-engine Airbus A330 with an inaugural flight from Manchester to Orlando. It is the first of 10 aircraft being delivered over the next 2 years (Virgin Atlantic, 2 April).

Codeshares Codeshares

Continental Airlines and LOT Polish Airlines have signed a code-sharing agreement on flights between selected destinations in the United States and Europe, effective 2 April (Continental Airlines, 4 April).

Continental Airlines and LOT Polish Airlines have signed a code-sharing agreement on flights between selected destinations in the United States and Europe, effective 2 April (Continental Airlines, 4 April). British Airways and Royal Jordanian have expanded their code-share agreement to include RJ-operated daily service from Amman to Heathrow, effective 19 April (Royal Jordanian, 13 April).

British Airways and Royal Jordanian have expanded their code-share agreement to include RJ-operated daily service from Amman to Heathrow, effective 19 April (Royal Jordanian, 13 April). Scandinavian Airlines has signed a code-share agreement with ANA, effective 23 May (SAS, 27 April). Scandinavian Airlines has signed a code-share agreement with ANA, effective 23 May (SAS, 27 April).

Figure 2: Delay Statistics (all causes delay – preliminary data).

Percentage of flights delayed on departurePercentage of flights delayed on departure

Primary delay distribution for March 2011Primary delay distribution for March 2011

Figure 3: Main carriers’ traffic statistics.

Volcanic ash cloud crisis: one year on On April 13-14, the EC, EASA and EUROCONTROL (along with 77 airlines, 14 ANSPs, 10 national regulatory authorities and the Volcanic Ash Advisory Centre London) participated in an ICAO exercise simulating a volcanic eruption in Iceland with a view to testing and verifying the effectiveness of the revised ICAO procedures. Preliminary conclusions show that 70% of all planned flights would have taken place (3 times more than last year during the eruption) and that EVITA (European Crisis Visualisation Interactive Tool for ATFCM), produced by EUROCONTROL, allowed for improved decision-making and use of airspace by aircraft operators (EUROCONTROL, 19 April). easyJet will be the world’s first airline to test a weather radar for ash called AVOID (Airborne Volcanic Object Identifier and Detector) and calls upon the aviation industry to work together to deal with the volcanic threat. In the meantime, talks continue with the EU for funding to support the research and development of the system. The AVOID system will be put through the certification process with EASA (easyJet, 15 April).

Traffic statistics: March update Figure 3 and Figure 4 compare March 2011 figures with March 2010 figures. Passenger capacity is measured in available seat kilometres (ASK) and traffic is measured in revenue passenger kilometres (RPK). (no update available for easyJet)

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Figure 4: Main carriers’ load factors.

Aircraft manufacturing

Airbus has announced that it will launch its fuel-saving A320neo aircraft six months earlier than planned, in October 2015 (Airbus, 6 April). Boeing delivered 104 commercial aircraft during the first quarter, 4 fewer aircraft than during the same period in 2010. During the first quarter, Airbus delivered 119 commercial aircraft, compared to 122 over the same period last year (Boeing and EADS, 7 April). Bombardier Aerospace reported drops for its last fiscal year (ended 31/01/11): revenue fell to €8.6 billion from €9.4 billion. The company delivered 143 business aircraft and 97 commercial aircraft, down from 176 and 121 aircraft (respectively) in the previous fiscal year. It expects to deliver 150 business and 90 commercial aircraft in 2011 (Bombardier, 31 March).

Cargo Following the merger of British Airways and Iberia into IAG, the freight operations of both airlines will be run as a single business enabling access to a wider network. However, both cargo operations will retain their current brands (IAG, 8 April).

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Figure 5: Carbon prices.

Regulation The EC to open a dialogue with stakeholders to modify EU Regulation 261/2004 aiming at strengthening the enforcement of passenger rights while clarifying the limits for liability in case of extraordinary circumstances. As extraordinary events can strike at any time (volcanic ash crisis, heavy snowfalls, Japanese earthquake), AEA urges the Commission to deliver a set of guidelines to accompany EU 261 in the short to medium-term (Europa, 11 April and AEA, 15 April). The EC has launched infringement proceedings against Bulgaria and the Czech Republic over their bilateral aviation agreements with Russia concerning their allowance of controversial Siberian overflight charges. Similar letters of formal notice have already been sent to other 23 Member States in recent months (Europa, 6 April).

Airports BAA still required to divest London Stansted airport and either Edinburgh or Glasgow airports in order to promote greater competition, following a provisional decision by UK Competition Commission that confirmed an earlier decision in March 2009. (UK Competition Commission, 30 March).

Environment The price of carbon contracts for 2014 is stabilising at €20/tonne in the recent weeks (Figure 5).

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Figure 6: Main carriers’ operating cost proportions 2010.

Fares Deflated ticket prices in Europe decreased by 9.4% in March year-on-year, based on preliminary values (Eurostat, April).

Oil Oil prices remained stable for most of 2010. They started to climb in the last quarter of the year. Some European airlines raised their fuel surcharges on some tickets to recover higher fuel costs. Figure 6 shows the breakdown of operating costs for major European carriers in 2010 (incomplete year for Ryanair and Air France-KLM). In 2010, fuel costs represented 26% of operating costs on average for the sample represented in Figure 6; the highest proportion observed amongst the other costs. The rise of oil prices over the past months remains one of the main concerns for aircraft operators in 2011. According to IATA, oil prices are expected to be 20% higher in 2011 (compared to 2010). The association estimated that fuel costs will increase from 26% of costs in 2010 to 29% in 2011, globally (assuming that fuel hedging represent 50% of the industry) (IATA, 2 March).

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Figure 7: Brent and Kerosene prices.

Oil prices closed at around $124 per barrel on 15 April, climbing from the beginning of April at their highest level since August 2008 (Brent). Converted price indices for Kerosene and Brent up to April are shown in Figure 7.

Impact on traffic of events in Tunisia, Egypt, Libya and Japan

Traffic to Egypt has stabilised at 25% below last year. Traffic to Tunisia has recovered somewhat, to only 30% below 2010. For Japan, where normally there would be 60 flights/day, we are currently seeing a timid recovery to pre-Earthquake levels. No-fly zone over the territory of Libya imposed on 18 March is still in force. See Figure 8 for an update on traffic to above-mentioned countries

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Figure 8: Traffic from Europe to Libya, Tunisia, Egypt and Japan.

 

       

© 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. 

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