Turkish Airlines: Flying to the moon

Full article on economist.com

A little over a year ago, Gulliver gave a downbeat assessment of the prospects for Turkey's aviation sector. Having enjoyed a decade of uninterrupted growth of more than 10% a year, Turkish Airlines, the country’s flag-carrier, was grounding aircraft and closing routes amid growing unrest at home and violence across its border with Syria. Concerns about regional security were also making life difficult in the United Arab Emirates (UAE) and Qatar, two other countries that have built aviation empires by connecting far-flung parts of the globe through their hub airports. Yet whereas the Gulf carriers remain in the doldrums, Turkish is gaining altitude again...

Interview: Adel Ali, Air Arabia CEO

Full article in PDF format

Compared with Europe, few people would describe the Middle East and North Africa (MENA) as a liberal aviation market. Restrictive traffic rights, bureaucratic visa regulations and state aid for flag-carriers conspire to make life immensely difficult for the few private airlines based in the region.

Heavy regulation is particularly burdensome for low-cost carriers (LCCs) as they rely on commercial efficiency and free-market access to unlock new demand among price-sensitive consumers. This explains why most Arab LCCs adopt a hybrid business model that eschews point-to-point flying in favour of hub economics, and replaces no-frills service with a whole host of complimentary perks. Airfares, inevitably, remain higher than average.

The one noteworthy exception is Air Arabia, the privatised flag-carrier of Sharjah in the United Arab Emirates (UAE), which was founded in 2003 and now operates 48 Airbus A320s out of ten bases stretching from the Persian Gulf to the Maghreb...

Interview: Hrafn Thorgeirsson, Primera Air CEO

Full article in PDF format

Amid a recent flurry of activity in the low-cost long-haul sector, one new operator stands out as relatively unknown on both sides of the Atlantic.

Primera Air stormed onto the scene last year by announcing plans to fly from London Stansted, Birmingham and Paris Charles de Gaulle airports to New York, Boston and Toronto – a radical departure from its short-haul charter specialism.

The company has an eclectic history that defies easy classification. Having started life as an Icelandic airline, JetX, it was acquired by and renamed after Primera Travel Group, a conglomerate of Scandinavian travel agencies and tour operators. Newly formed Primera Air then ditched its Icelandic identity, first by acquiring a Danish operating licence and then another in Latvia...

Pegasus gallops back to profit

Full article in PDF format

By the time Turkey had suppressed the military coup d'état of July 2016, it was clear that tough times lay ahead for the country’s aviation sector.

A series of high-profile terror attacks – including one devastating assault on Istanbul’s Atatürk International Airport – had already shattered Turkey’s appeal as a tourism hotspot and intercontinental aviation hub. Political unrest only looked set to damage its reputation further.

With flag-carrier Turkish Airlines and low-cost rival Pegasus Airlines both posting operating losses for the year – their first in recent memory – concerns grew that Turkey’s era of double-digit passenger growth was grinding to a halt. The subsequent election of US President Donald Trump and the imposition of his laptop ban on Turkish and Middle Eastern carriers made 2017 appear no less ominous.

Yet, despite battling headwinds on multiple fronts, the two network carriers rebooted their growth plans last year after bouncing back into profit. Amid a vastly improved security climate and a better-than-expected recovery in outbound demand, Turkey’s aviation sector now looks stronger than ever...

Why Iceland's WOW Air could be planning to fly from America to India

Full article on forbes.com

WOW Air has confirmed its intention to launch Asian flights during a new wave of long-haul expansion in 2019, but chief executive Skúli Mogensen is remaining tight-lipped about which destinations will be served.

“Beyond next year, with the addition of the A330neos, we will start Asia flights,” he told me last week, referring to the delivery of four next-generation wide-bodies in late 2018. “It is very interesting to see how well Iceland is positioned to make certain connections [with Asia] ... East Coast U.S. is by far the superior route for connections...

Pegasus Airlines may launch Ukrainian subsidiary, order more A321neos

Full article on forbes.com

Turkey’s Pegasus Airlines is considering setting up a subsidiary in Ukraine and may also increase its order for Airbus A321neos, according to Emre Pekesen, sales and network planning director at the low-cost carrier.

Management have held talks with Ukraine’s Infrastructure Ministry in Kiev about the possible joint venture, which would be majority owned by Ukrainian investors and would fly under a Ukrainian operating license. Pegasus already runs one such joint venture, Air Manas, formerly branded Pegasus Asia, in the central Asian country of Kyrgyzstan.

“Pegasus always is looking around nearby countries and just waiting for the opportunities,” Pekesen told me...

Interview: Ajay Singh, SpiceJet Chairman

Full article in JPG format: page 44/45 & page 46

India’s government has not always met with universal praise when setting air transportation policies, but the rationale behind prime minister Narendra Modi’s Regional Connectivity Scheme – dubbed Ude Desh ka Aam Naagrik (UDAN), or “let the common man fly”– is hard to fault.

UDAN aims to ensure that the economic benefits of India’s rapid aviation growth are spread equally between all regions, instead of orbiting around wealthy metropolitan areas. The subsidised scheme gives airlines incentives for launching thin routes with regional aircraft, as well as limiting the maximum fare paid by many passengers.

“Aviation cannot be about rich people,” Modi said during a speech in the Gujarati town of Chotila last month. “We have made aviation affordable and within reach of the lesser privileged.”

For low-cost carriers like SpiceJet, engaging with UDAN is as much a commercial necessity as a social obligation. India’s fourth-largest airline has a target of deploying 200 aircraft by 2024 – up from 54 today – amid a scramble for market share in one of the world’s hottest airline sectors, where domestic traffic is growing by 21% a year and 97% of the population still does not fly...

UDAN a good job, Mr Modi

Full article on economist.com

Why would one of the world’s fastest-growing airlines buy a ten-seat propeller plane, when most of its customers fly on 200-seat jets? Switching to smaller, less efficient aircraft defies commercial logic. But it is an appealing thought for those living in isolated communities far from big airports. That is what India’s new regional connectivity scheme, Ude Desh Ka Aam Nagrik (UDAN) or “let the common man fly”, promises to offer. It uses subsidies to improve the commercial viability of seldom-used routes. It also caps half of the fares on such routes at 2,500 rupees ($38) per hour of travel. If properly implemented and funded, the scheme could become a powerful tool for spreading India’s economic wealth more evenly...

Wizz Air UK: A case study in Brexit scaremongering

Full article on forbes.com

Wizz Air, the central and eastern European low-cost carrier, has unveiled plans for a dedicated UK subsidiary to grow its British operations after Brexit – despite being depicted by many as an early casualty of the UK’s vote to leave the EU.

The move is designed to help Wizz Air expand its presence at London Luton Airport regardless of any headwinds caused by the UK’s withdrawal from European aviation treaties. The airline currently uses its Hungarian operating license to base planes in foreign cities like London, exploiting liberal cross-border rules within the European Common Aviation Area (ECAA). Unless Brussels agrees otherwise, Britain’s access to the ECAA will automatically expire in 2019...

Interview: Patee Sarasin, Nok Air CEO

Full article on forbes.com

Nok Air's outgoing boss believes his company needs a strategic partner to stay afloat and that Singapore Airlines may step in if Thai Airways International (THAI) ends its financial support.

“The shareholders have been discussing about this themselves,” Patee Sarasin told me this month, when asked about the possibility of THAI abstaining from Nok’s 1.7 billion baht ($51 million) recapitalization. “The current major shareholders now, beside THAI, have expressed that they are willing to take all of it if TG [THAI] doesn’t want to participate.”

In that scenario, Sarasin said Nok would begin searching for a new strategic partner “that can provide knowhow”. He confirmed that Singapore Airlines, an existing partner of Nok’s through low-cost long-haul venture NokScoot, would be among the candidates...