Issue 27 now available!

Market Analysis: Americas

Looking ahead (and backwards?)

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In this issue

Main Feature

Gulf airlines under fire - Aside from the rhetoric and dust, what’s the underlying agenda?

There’s no shortage of heat and light in the US vs Gulf airlines battle. But not much to make it clear why the Gulf airlines’ relatively limited impact should attract so much focus. 

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Regions

Latin America remains a bright spot for US airlines

Despite forecasts of relatively tepid economic growth of 1.3% in Latin America for 2015, US airlines in particular believe that some of the headwinds that dragged down their performance in the region during 2014 will start to subside in 2H2015. 

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Regions

Canada’s Blue Sky Policy: a sheep in wolf’s clothing

Canada’s “New” (2006) aviation policy contains all the right words for a modern liberal aviation power. It’s just that there are some other words that leave the door open to any suggestion or interpretation that happens to be politically convenient at the time.

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Analysis

Long haul Atlantic LCCs

Ryanair CEO Michael O’Leary’s recent musings about a possible low-cost transatlantic project indicate that he believes any such operation would need average fares below EUR100. This raises the question of just what is a sustainable fare in this market? 

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Regions

787 and A350 deliveries open up new small airport opportunities for European airlines

The development of the new generation widebody aircraft, such as Boeing’s 787 and Airbus’ A350,  may soon lead to direct services from European hubs to a growing number of secondary cities in North America. 

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Feature

The US airport system is lagging badly, but there is still little appetite for private investment

The US has few new-build airports, even fewer low cost airports, but remedial and expansion work is extensive. The US has not constructed a new airport of real economic significance since Denver, two decades ago and, prior to that, Dallas-Fort Worth in 1974. 

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Opinion

The power of an airline’s network

Network optimisation continues to be a key revenue generator for carriers, with technological and data advancements injecting a new level of sophistication in to the practice. [By Nawal Taneja]

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Feature

ULCCs glimpse an opening as the US’ consolidated industry focuses on yields and profits

Consolidation in the North American marketplace has now been a mainstay for a decade, beginning with the combination of US Airways and America West and culminating with US Airways and American closing their merger in late 2013.

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Regions

A new era of profitablity for US airlines may mean a new basis for sustainability

All of the large US airlines delivered profits in 2014, with many achieving a return on invested capital well in excess of 10% including Delta Air Lines’ 20.7% return and Alaska Air Group’s 18.6% ROIC. 

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Numbers

Unit costs in the US airline industry are highly competitive post-bankruptcy

Measured by cost per available seat kilometre (CASK), the unit cost gap between low-cost carriers (LCCs) and full service carriers (FSCs) is narrower in the Americas than in any other major world region, particularly in the US. 

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Regions

Latin America: Huge opportunities remain despite recent challenges

The Latin American market should see growth rates start to reaccelerate as the region’s economies improve. Growth in Latin America has slowed as economies have sputtered, impacting demand and profitability of its previously buoyant airline sector. 

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Regions

North America-to-China airline growth characterised by individualism

The North Atlantic to Europe market is the largest long-haul segment for North American airlines, but it is the Pacific to Asia routes that growth opportunities are the largest. In 2010 there were 392 daily flights between North America and Western Europe, according to OAG. 

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