Global Analysis

Scheduled airline capacity increased by 5% year on year based on the latest scheduled data from OAG, with the number of flights increasing by a slightly lower level at 4%. The average number of seats per aircraft frequency in February increasing by 1% compared to the same time last year.
All regional markets recorded year on year growth with the notable exception of capacity to/from Central and South America where capacity fell by some 3% against the same month last year as the impact of the loss of Mexicana services impacts the market capacity. Year on year the two fastest growing markets are those to and from the Middle East and to and from Asia Pacific in respect of frequency of service. Quite interestingly, the number of scheduled services both within and to and from North America remained constant year on year although a slight increase in average capacity per flight resulted in more seats being offered.

Source: OAG, includes international capacity to/from the regions

Low cost scheduled capacity increased by 9% compared to February 2010 with notable growth in the Asia Pacific and Middle East regions again leading the way in terms of year on year growth. Low cost airlines account for one in every five scheduled seats now offered around the globe; a very slight increase year on year.

Source: OAG, includes international capacity to/from the regions

We reported in January that we expected Haneda to overtake London Heathrow at some point in 2011 and this will happen in February when scheduled capacity will increase to 7.120 million compared to 7.115 million at Heathrow. Year on year Haneda reflects a capacity growth of 8%.
At airport level Atlanta remains the largest facility with nearly 68,000 scheduled flights planned in February although this represents a slight fall of 4% year on year with the average capacity per scheduled flight actually increasing by 4.8%, thereby indicating an increasing use of larger aircraft types at the airport.

Regional Summary

Africa

In Africa, a strategy of linking African points to hubs has seen expansion by Ethiopian, Emirates, Qatar, Etihad Kenya Airways and Egyptair all adding capacity and new service during the winter season.  Visiting airlines from Europe were less active though the A380 continues to operate between Paris and Johannesburg.

Source: OAG, includes capacity to/from and within the regions

There is increasing penetration of the African continent by the Gulf LCC’s.  Egypt and Morocco remain two of the main recipients of this capacity from carriers such as Air Arabia while FlyDubai has expanded into Sudan and Djibouti.

North America

With few aircraft on order and two significant mergers to manage (DL/NW along with UA/CO) there is a considerable amount of schedule consolidation in the US domestic market.  Even low-cost carriers have had few aircraft deliveries to spur capacity growth.  Capacity growth within the US market has therefore been marginal at 1% growth.

Most carriers across the Atlantic between Europe and the US have maintained rigid schedule control to ensure that capacity does not run ahead of the market. There has been some development of hub-to-hub operations now that ATI applies to all three alliances. BA/AA and IB have added capacity and the other two alliances have responded competitively.  Strong capacity growth is therefore planned for Amsterdam, Heathrow, Madrid, and Paris.  Frankfurt Airport and Rome seem to be exceptions with a trans-Atlantic decline of 4% and 9% respectively.

Source: OAG

Europe

With the economic downturn, some major European LCC airlines have reduced the amount of winter flying, particularly within the EU.  The impact of this is most stark in the Irish market, where LCC capacity is down 10%; London Stansted has also been affected by the reduction in LCC flying – down 13%.

To partially compensate, EU LCCs have been entering non-EU markets.  International capacity to Russia is +31%, Turkey is +79%, the Ukraine is +47%, Egypt is +26% and Israel a staggering 156%.

Inevitably there are the Gulf carriers bringing more winter season capacity to Europe– high growth markets are represented by Emirates’ new routes; Amsterdam, Prague and Madrid. The usual three Gulf airlines have been driving the rise in Middle Eastern capacity to Europe, particularly the Southern Mediterranean destinations. Noting this development, Peter von Moltke, CEO of OAG commented that medium to long haul carriers continue to build their presence in the European markets with an objective of securing increasing shares of the longer haul markets where traditional yields have been higher. ‘Carriers such as Emirates, Etihad and Qatar Airways continue to expand frequencies and open new markets as their development moves forward and with increased frequencies expected to a number of destinations in 2011 this trend will only continue.’

Source: OAG

Aircraft delivery is also making an impact on the numbers, with Air France and Lufthansa operating more A380s, and KLM and British Airways accepting 777-300s.  

Caribbean

There are some significant cuts in routes from Puerto Rico which have been announced by American Airlines.  At least ten services will see reduced operations by April, a mixture of regional and mainline flying by the carrier.
 
Mexicana capacity loss to Cuba compounds the reduction in this region and Central America.

Asia/Pacific

Air Asia continues to make its impact in the LCC sector of Asian capacity. They represent the main engine of growth; international LCC capacity to/from Malaysia is three times the level of LCC capacity to/from China (including SAR’s), and eleven times the LCC international capacity to/from Japan. Though LCC capacity to/from Malaysia is four times the size of the Philippino LCC capacity, there are huge rates of capacity increases; 56% on domestic routes and 48% on international sectors. However, the suspension of services from Merpati has had an impact on the figures for Indonesian domestic capacity (down 32%).

Source: OAG, includes capacity to/from and within the regions

The Chinese carriers have been adding new capacity (eg Air China to San Francisco) to the US, principally from Beijing and Shanghai.  More capacity is planned by the airline to Los Angeles and Vancouver later in 2011.

The alignment of the Delhi hub by Air India appears to be benefiting the airport. Its seat capacity grew 21% over February 2010 (compared to constrained Mumbai Airport’s 3% growth).  India as a whole grew 8% on international routes and 11% on domestic services.