Global Analysis

Scheduled airline capacity increased 5% year-on-year (as it did in February 2011) based on the latest scheduled data from OAG; the number of scheduled flights also increasing substantially by 4%. The average number of seats per aircraft frequency also grew again in March with a 1.3% increase compared to March 2010.

All regional markets recorded year on growth, apart from capacity to/from Central & South America where it fell 1%. This drop in capacity, however, is an improvement from last month when the reduction was 3%.

The fastest growing market is to/from the Middle East, which recorded 13% increases in both the number of flights and seats offered. To/from Asia Pacific is very close behind with 13% (frequency) and 11% (capacity) growth. Recent trends in frequency over the last 5 years to/from Middle East region has a clear lead with an average growth rate of 13%. This is followed by to/from Africa with 10% and to/from the Asia Pacific region with 8%. US, European and Gulf airline fleet deployment in the Asia Pacific region has driven this growth since 2003.

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

Low cost scheduled capacity increased 10% compared to March 2010 (9% growth in February year-on-year) with the most notable regional growth in terms of frequency being within Africa (35%) and to/from the Middle East (21%).

Source: OAG

As we reported last month, Haneda had jumped ahead of Heathrow in terms of scheduled capacity, however the positions have reversed in March, making it the fourth largest. Beijing jumped into second place with almost 8 million seats available. Arguably, the introduction of the Northern Hemisphere summer season has assisted Heathrow in regaining its position over Haneda this month, however, the Tokyo airport is showing impressive growth.

Despite being slot constrained, Beijing Capital Airport managed to increase seats and frequencies by 3% and it will be interesting to monitor how this develops over the coming season.

Shanghai Airport records a 17% growth in capacity – a particularly strong performance at another slot-constrained airport in China.

Jakarta and Delhi Airports show large gains in capacity, with growth of 25% and 23%, respectively.  Air India’s hub developments are clearly impacting positively upon the Indian airport and low cost carrier expansion in Indonesia has boosted the numbers for March.

Regional Summary

Africa

The China investment legacy continues to prime the expansion of services into Africa.  Political events will presumably impact on North African performance in March, with many services cancelled or suspended until more stable political conditions are delivered.

Source: OAG

 Low cost airlines have continued their expansion within North Africa, driving frequency growth by 294%, and 202% growth for the year-to-date.  Again, this may be affected by the political situation in key low cost markets such as Egypt, Tunisia and Morocco.

One of the top segments to experience expansion in sub-Saharan Africa is Nairobi.  New capacity serving Nairobi to Western Europe routes has driven up frequency growth by 12%, with seat capacity rising 15%.  This expansion will continue as Kenya Airways plans to operate a new service to Paris as part of its Skyteam partnership with Air France/KLM.

North America

Capacity rises in the U.S. continue to remain cautious.  Domestic seat capacity rose 3% in March, and services to the U.S. from international destinations delivered a capacity increase of 4%.

The exception is the U.S. low cost airline sector, where airlines have scheduled more capacity on U.S. domestic services (a 6% growth), as well as a 14% expansion on international routes (Latin American, Caribbean and Mexican routes were all candidates for JetBlue and Air Tran expansion).

Source: OAG 

Europe

As with the U.S., Europe records a 3% increase in capacity within the region.  There is a 10% increase in the number of seats operating to and from Europe.  The deployment of A380 aircraft onto more routes partially explains this rise.  The Gulf carriers have also scheduled more air service to the region; Madrid sees a rise of 53% on capacity to the Middle East, for example. Amsterdam is scheduled to receive a 27% increase in capacity to the Middle East in March which is a continuing reflection of Emirates introducing service to Dubai in May 2010. Given the network coverage of KLM and the strong growth plans for Emirates and other major Gulf carriers such as Etihad Airways and Qatar Airways, it will be interesting to see how this trend develops further in 2011.

Similar to the U.S., Europe is seeing low cost airlines expand.  As with February’s figures, the main area of expansion is to markets to and from, rather than within Europe, with a 12% increase in seats by low cost carriers.  Once again, Turkey was a major performer in this sector, with seat capacity rising 75% for the period January to March 2011 on international services, compared to the same period in 2010.

Low cost seat expansion within Europe was a more modest 7%.  All the major European economies are actually experiencing declines in domestic low cost operations for 2011; Germany is down 7%, France by 8%, and the UK is down 11%.  Spain bucked this trend with a Ryanair-fuelled 11% increase on domestic operations.

Source: OAG

Caribbean

The Caribbean continues to suffer from retrenchment by carriers, as well as the legacy of last year’s route cuts and the Mexicana collapse.  Seat capacity to the region is down 6%, and within the region is marginally down at 0.2%.  Little or no new aircraft deliveries to Caribbean carriers indicate little scope for regional seat production. There are some positives with British Airways’ service to Cancun from Gatwick scheduled to move to three per week, from two,  at the start of the Northern Hemisphere summer season, and St. Lucia and Trinidad (tagged service) both going daily, from five per week.

Asia/Pacific

As indicated by the growth of capacity in Beijing and Shanghai Airports, airline expansion continues in both the international and domestic markets.  There is a planned 14% increase in seats on international routes to China, and a 6% increase in seats on the domestic market. 

New routes and service restoration to Vancouver have helped push capacity growth between Beijing and the U.S. and Canada, increasing 38%.  This market segment should continue to perform as a number of services by United, China Southern and Air China have yet to commence service. However, all of the major North Asian hubs record double-digit capacity expansion to the U.S. and Canada.

Capacity between Asia and Western Europe was equally positive, with a 10% rise in seats between the two regions. Shanghai records growth of 15% in seat capacity, closely followed by Seoul with 12%.

Low cost airlines grew the number of services within Asia by 20% for the period January to March 2011, compared to the same period in 2010.  Services by low cost airlines to and from the region grew by only 6%, indicating the more limited range that low cost airlines can operate to outside of Asia.  Interestingly, low cost carriers grew their capacity to India by only 1%, whereas low cost carriers frequencies on domestic services are planned to expand by 10% from January to March.

Source: OAG