I'm in suspense for the Western European data from VS4Ever
Sorry dude, currently on business in MCO world, but I will get it done before I go to AUS next week
As the Cylons say in Battlestar Galatica - "By your Command"... here you go, the final installment of the international series of analysis. Thanks for putting up with the long posts and for the positive feedback... Until next year!
Part 6c – Western Europe
The final regional part of the analysis includes the remaining regular routes going to France, Germany, Switzerland & Holland
The Western European market continues to be centered around FRA, MUC, CDG, ZRH and AMS, while it did get rattled a bit when EW turned up with CGN and AB with DUS, those routes are now closed, so we are back to the way we were. The LH group basically control FRA, MUC and ZRH through LH and LX respectively, AMS is a DL stronghold, although KL is joining in 2019 as part of the DL/KL/AF JV. CDG during the period reported was AA/DL and AF. AA is now off the route and DY/PF have joined in, so that market will be seriously congested.
The market itself has been up and down given the issues with CGN and DUS, but when all said and done grew by 8.2% in terms of seats from 1.29m to 1.4m and 9.2% in terms of pax from 1.06 to 1.16m, resulting in a minor kick from 81.8% to 82.5% loads. Although the 2017 numbers were supported by 77k seats from AB, which will not repeat in 18.
What I will say is that these numbers alone do not tell the whole story and you will see why.
Start with the easy one. AA, using the B752 on their CDG run, DL on the AMS and CDG routes were pretty much 333’s all the way now having moved up from 764’s, next comes LX with their 332’s and about 1/4 usage of 343’s. AF, now we start seeing the fleet shifts going on, they phased out their 744’s in 2016, with the 772 and 773 picking up the slack and a mixture that further includes the 332. Then our friends at LH who have thrown pretty much every long haul type they have with one Whale (see what I did there) of an exception. Yep the 388 never showed, even though Massports own comments suggested they were supposed to be #3 for the type to show up after EK and BA. Most of the legwork now is done by the 364 seater 748, 293 seater 359 and 218 seater 332.
Putting the route to the side for a minute, if you stop to see the size of DL’s operation at AMS, it really is quite impressive as you walk through the terminal. DL Tails everywhere, from BOS, DTW, ATL, and many more. But back to BOS, there’s a reason why KL are coming in 2019 and it’s been building since 2014. DL have grown seats by 14% using a combo of 2x daily’s and bigger aircraft (last big push was from a combo of 764’s and 333’s to full time 333’s. As a result DL’s average seat count grew from 276 back in 2014 up to 292 in 2017. And from 297K to 338K in total. Pax counts have grown too at a very close approximation to capacity growth 13.7% to be exact, which when you throw 34,000 extra seats in a market is pretty good going and thus loads have been maintained at 84% on 285K pax. Summer loads have been a respectable 86.3% in 2017 and that was maintained through Dec. only Jan to March seem to suffer with Feb the worst at less than 70%. So chalk this one up to a growth model, 2018 will be interesting, as DL do not have anything bigger available to throw at the route, so I am guessing we are going to see a further uptick in loads and thus capacity %’s and going 17-18 weekly when KL arrives is only going to boost this route further. I know I am going to love trying to catch one of those gorgeous blue tails at BOS, trust me seeing them at AMS is impressive enough..
You know sometimes, you think you know a route, and then sometimes, you suddenly see what’s going on and your mind gets blown. CDG is that route. What a freaking mess this one is.
So first up on the Wheel of Fortune (all rights reserved by TV) is AA, now their version of the route is dead, having given up when DY and PF announced they were wading into the route. AA kind of threw everything at this one. Extending the season for one by a couple of months, but it was surviving on the front of the house and I think AA were looking for an excuse to get rid. Now between 14 and 17 AA actually doubled the number of seats on the route from 24K to 48K and surprisingly the pax followed suit from 18 to 38k, so you think well 133 avg pax and 78% loads would have been enough to see this through, but I think 2016 killed this one when loads on average for the whole year dropped below 60% and 100 pax per flight on a 752. And remember this is a summer seasonal route. Winter is not an excuse… tragic.
The thing you have to always remember is the JV with AF, so it’s all neutral over time, but you’ll see what has happened here in a few moments, This is the clearest case of metal neutral shenanigans that you will ever see, it took them a couple of years to align it but it’s there. So back in 2014. AF ran 295k seats on this route with 236k pax enjoying their world for a roughly 80% load. Nothing wrong with that. DL for their part ran 78k seats and 67K pax for a pretty impressive 86% load. Let’s also bear in mind in 2014, DL was only seasonal, they went year round in 2016 and that on average DL was running 184 seats vs AF’s 331.
By 2017 the world was a bit different, DL had moved their seat count up by 40k (remember that number) to 128k and 210 seats per flight for a 64% increase. Their pax count moved up from 67K to 105k (although that latter number was lower than 2016 by 5k) for a 55% increase to a decent 81% load and lest not forget we are year round by this point.
AF on the other hand went in reverse from 295k to…..yes you guessed it 255K a reduction of (wait for it!) 40k….seat count average dropped from 331 to 290 as a result of using smaller aircraft once the 744’s went away. Over the 14-17 period pax count dropped from 236k to 222k (6.1%), however 16-17 it went up by 8.1% from 205k to 222k, more than covering DL’s drop, but interestingly back to 14-17 average pax count went down from 265 to 252. So seats counts switch, more pax overall and everyone’s a winner. Got to love those JV’s…
So who knows what’s going to happen in 18, I’m still getting my head around the AF/DL thing..
Despite owning EW, nobody I think was happier than LH when AB and EW stopped their DUS and CGN routes respectively. This is definitely an old shoe route, it’s always going to be there when you need it. However LH have been pruning frequency and flights in 2017, the flight count reduced by 3.1%, which is a total of around 15 flights each way. But interestingly there was a 15% reduction in seats, with an increase of around 140 flights with the 364 seat 748, but a decrease of net 170 flights from the 744 with 371 seats to the 332 with 216. Probably in response to the AB DUS capacity. Overall it seemed to work, as pax counts only dropped by 4.8% from 16-17 to 259K and 264 pax per flight for a 82.4% load for the year as a whole, however that count was the lowest in 4 years as 2015 peaked with 284 per flight, however with the potentially lower running costs of the 332, it could be argued that yields might have been a little better, however it’s just a theory.
Summer season was an ok 86%, but was a whole lot better than the horrible year that was 2016, where they managed a dire 73.4% with a terrible 59% in May and it wasn’t much better for the whole year. So the capacity change made sense based on that and seemed to stem the tide. 2018 should be better in theory now AB are gone.
LH #2 route with MUC is another old shoe route, it’s been going for a long time now and in general performs a little worse than FRA overall. Flights have increased slightly from 14-17 by 3.6% and the seat counts have moved up by 9% from 187K to 205K during the same period and in fact the pax haven’t quite followed in the same numbers, but it’s been close, moved up by 11K from 152K to 163K, up to 229 per flight and 7.3% growth, as a result average loads have moved down from 81.1% to 79.9%, so not bad, but not exactly earth shattering either. Summer seasonal for 2017 of 84.5% isn’t crazy, but again not terrible either.
The capacity growth here has been from switching equipment primarily with the 293 seat A359 taking over the majority of the duties from the 332 and 346’s, while we often say folks rarely care what aircraft they fly on, there is some empirical evidence that suggests folks do like flying on the newer types…
Nothing really going to change here, so I expect 18 to mirror 17, with maybe an uplift due to the loss of DUS, but not much.
Last but not least comes ZRH, run by Swiss (aka LH group). 14 and 15 were the standard year round 1x daily, but in 16 and 17 LX ran a seasonal 2x daily and as it turns out, it’s kind of worked. Seats have grown from 168K in 2014 to 214K in 2017, however 2017 is a reduction of 9.5% over 2016 and that’s ok, because their loads increased by an average of 5% as a result, 14 managed 83.9% for the year, 17, 80.9%, but on a much larger number of flights. Pax counts went up from 141K in 2014 to 173K in 2017, which dropped the average pax per flight from 197 to 188, but again losing 9 on 200+ more flights is not that bad overall. Summer seasonal for 2017 was 84.9%, which again like MUC and FRA was respectable without being incredible, but this is after adding the 2nd flight in… so you can’t really complain, clearly there was enough of a market lift there to do that.
The Western European market has seen some growth over time, but you can see the power of the airlines on these routes, EW died very quickly, AB couldn’t handle it either, so after 2 years of fun, we are back to status quo, although with DY and PF entering the CDG market at the expense of AA, 2018 will be even more fragmented. ZRH going double daily in summer will help the growth, but until other airlines come into this, this is what we will get.
Data Source: BTS T-100 International Segment Report (All Carriers)
Data File used for information located here: https://drive.google.com/open?id=0B61t8 ... Vp3SE8zaUE
That feeling when you sit at the end of a runway, brakes are released and the raw power takes over. Now that is a thing of beauty and it never gets old.