MarketLine Blog

Posts about Airlines

Norwegian: The low cost airline with ambitions to fly long haul

MarketLine

Norwegian Air is a no frills fly service that is looking to shake up the long haul industry. For a number of years the rapidly growing budget airline players have been considering moving into this sector but technical problems, regulatory issues and competitors have got in their way. Norwegian Air however, has found a way and now offers a number of routes from Europe across the Atlantic using the new breed of efficient yet smaller airplanes from Boeing and Airbus. However, this transition is not without issues and availability of… Read more

Monarch Airlines: Management not to blame for collapse of UK’s longest-serving airline

MarketLine

In the early hours of Monday October 2, 2017, KPMG announced that it had entered the office of Monarch Airlines and the company had officially entered administration. In the following hours the Civil Aviation Authority chartered 30 planes from across Europe to repatriate some 110,000 British citizens and customers who were then stranded abroad with no return flights. Cancellations of every flight from October 2 and onwards have affected some 300,000 bookings and likely close to a million individuals, and Monarch’s departure from the short-haul flight market will almost certainly… Read more

Boeing vs. Bombardier: Tariffs justified as Bombardier receives state aid

MarketLine

In September 2017, the US Department of Commerce announced the preliminary decision to implement import tariffs of approximately 220% on any imports of Bombardier’s C-Series jets into the US. Following a complaint by major competitor Boeing that Bombardier was dumping its jets into the US market as below cost-price, the tariff plan has met with widespread criticism across Canada – where Bombardier is based – and in the UK, where wings are built in a plant in Belfast, currently providing 4,200 jobs. In reality the tariff – which would more… Read more

UTC buys Rockwell Collins, hurting Boeing: New company will lead market and make conditions harder for Boeing

MarketLine

Having left the servicing market when the 787 Dreamliner program was created, Boeing announced a return earlier this year. Yet the much vaunted return – advertised as a means to save money in a toughening commercial jet airliner market – is likely to be harmed by the purchase of Rockwell Collins by UTC. The new company formed by the takeover will provide a service no other company is able to match fully. In making very public protests over the $30bn deal, Boeing is attempting to raise the interests of regulators…. Read more

Air India privatization: Airline must be broken up before sale

MarketLine

Air India is in a horrible financial condition. Largely surviving off a government bailout, the company has incurred massive losses down the years during which market share was lost and the business overtaken in the quality of service it provided. Now the company has finally managed to turn a profit – largely due to low oil prices – a privatization is unlikely to result in one buyer taking over the entire airline and assorted assets. Some observers of the international airline industry have expressed surprise at the possible bid from… Read more

The global airlines industry will see accelerated growth by 2021, says MarketLine

MarketLine

The global airlines industry is set to rise from $569.5 billion in 2016 to $828.3 billion by 2021, representing a compound annual growth rate (CAGR) of 7.8%, and surpassing the peak growth rate of 7.4% seen in the period between 2012 and 2016, according to research firm MarketLine. The company’s latest report states that the emerging dynamic of the Asia-Pacific region, which accounts for 33.9% of the global industry, combined with signs of reduced rivalry in the European airline industry, are driving accelerated growth in global terms. The Chinese and… Read more

Alitalia staff vote down latest cost cutting plan: Financial difficulties making the future of the company look increasingly uncertain

MarketLine

Alitalia has for many years now been a company incurring consecutive losses year after year. Historically the Italian government has stepped in during times of extreme financial difficulties to bail out the country’s flag carrier. However in 2014 it agreed to sell a 49% stake in the company to UAE based Etihad Airways, which subsequently invested significant resources into Alitalia in order to turn it into a profit making company. Disappointing results nevertheless have continued and Etihad’s attempts to get the company to reduce costs by lowering wages and reducing… Read more

Iran Transport: Accelerating forward to the future

MarketLine

Iran is a growing hub for transportation, acting as a critical connection point between India and Russia/ Europe. Until recently, the Suez Canal served as the quickest transport route between India and Russia however with Iran undergoing rail infrastructure upgrades and also building part of the North-South corridor, Iran is set to become a key part of the ongoing development of transport links using the rail network. The North-South corridor has the potential to cut the transport time by around 50% and is sure to disrupt the naval transportation market…. Read more

Iranian aviation industry will witness strong growth post removal of sanctions: Threat of renewed sanctions under Trump presidency nevertheless persist.

MarketLine

After decades of sanctions, the US government under Obama announced in early 2016 that it was lifting sanctions on Iran, due to the latter’s compliance with the IAEA over its nuclear programme. One of the strongest beneficiaries of this removal of US led western sanctions on Iran seems to be the Iranian aviation industry, which in recent months has concluded billion dollar deals with major aircraft producers such as Boeing and Airbus, for the purchase of hundreds of planes. The deal with Boeing alone is said to go as far… Read more

School Holiday Price Hikes: Families exploited by unfair system

MarketLine

UK holiday companies are renowned for raising prices in school holiday periods. Significantly raising prices during these times allows prices to remain low for the rest of the year. As such, while certain consumers bear the brunt of this with prices rising by as much as 115%, others can reap the benefits. The travel industry in the UK is intensely competitive. The traditional model of a high-street operator selling holidays face-to-face at a heavily marked up price is no longer feasible. The surge of online travel companies offering package holidays… Read more

Airline seating patent demonstrates the importance of innovation to the future of passenger air transport

MarketLine

The recent filing of a patent by French manufacturing group Zodiac Aerospace for an innovative high density seating solution for single aisle passenger aircraft has caused a stir in the industry. By configuring the seats into an offset facing pattern, the space between seats is claimed to increase by 15%, offering each passenger an additional 10cm of available leg room. While the introduction of the seating is likely to be some way off, such innovation is indicative of the how the industry as a whole is seeking to meet the… Read more

Ryanair profits soar as evolution of business model delivers results

MarketLine

On Tuesday 26th May, Ryanair Holdings (Ryanair), a low-fares scheduled passenger airline serving 1,600 short-haul, point-to-point routes across Europe; announced a 66% year on year increase in net profit. The company’s growth is no surprise to Marketline- the evolution of Ryanair’s business strategy was extensively examined in a March 2015 Case Study,  Cheap but no longer nasty: evolution at Ryanair, which predicted Ryanair shareholders were set to benefit from a sustained period of strong cash generation, as the ‘Always Getting Better’ program  delivered continued growth in passenger volumes.  The program,… Read more

Boeing and SpaceX to launch astronauts: Bad news for Virgin Galactic?

MarketLine

The ISS was originally designed and tested to provide an operational lifetime of 15 years; this period passed in November 2013. In January 2014, NASA announced its intention to extend ISS operations until 2024, giving a new 26-year life span to the station. However, at the same time, NASA’s budget has been falling in real terms and the agency has had to develop new relationships with private enterprises, such as SpaceX, Orbital Sciences and Sierra Nevada, in an attempt to allow competitive forces to drive down the cost of rocket… Read more

Global air passenger numbers to double in 20 years

MarketLine

Airbus, the European plane manufacturer, predicts that air passenger numbers will more than double globally over the next 20 years from 2.9 billion to 6.7 billion in 2032. The France-based manufacturer attributes this growth to a bigger global middle class, urbanization, migration and tourism. Airbus also predicts that 29,220 new aircraft will be needed over the next 20 years, in order to meet this increased traffic. About 10,400 planes of the total number will be necessary just to renew existing fleets. Overall, new orders for aircraft would amount to $4.4tn…. Read more

Embraer targets the US

MarketLine

There is widespread disappointment with the recovery of the US economy, but the American economic stimulus is rendering more fruits then the fiscal consolidation packages undertaken by European governments. This is reflected in the difference in new business opportunities currently presenting themselves on either side of the Atlantic. During the economic free-fall of the developed world, the European and the American market shared a comparable decline in the Gross Domestic Product (GDP). However, the GDP in the US is showing a more robust increase than many European countries, with the… Read more

Embraer in the US market

MarketLine

According to the International Air Transport Association’s (IATA) financial monitor, airlines share prices were 3% higher than the FTSE Global All Cap in the first 4 months of 2013. Its share prices are outperforming the market as investors are optimistic about the short-term recovery of the industry. The recovery of the share price is particularly strong in the US. It has risen by 35% this year following the improved financial performance of the American airline companies after the implementation of restructuring plans. The combined net profit of the American airlines… Read more