2018

[Ray Finkle]

Lots of long haul plans for BHX and MAN. Whilst they're slowly getting to grips with TATL flights to airports 70 odd miles away from the intended destination I guess we'll just have to put up with Primera flying direct to Logan, Liberty, Pearson, +1.

I don't think that the door is totally closed on Norwegian, it's more left slightly ajar.

 

[User001]

To be honest, the amount of commentary coming from behind the scenes and analysts, it's probably for the best that Norwegian have given MAN and BHX the cold shoulder, it sounds like a lot of growth is going to end in tears, as it's clear Norwegian is playing a game of 'chase the incentive', and we all know incentives then come to an end.

Look at BFS, they went after the 'United' money. They have just announced CDG-DEN after DEN put a nice wedge down, and there are many more cases of this.

Things are not as clear cut as they seem.....

 

[58terminus]

I don't think that the door is totally closed on Norwegian, it's more left slightly ajar.

Hopefully.But i get the impression the door closing was Norwegian slamming it behind them as they left the room
in a huff.They are after all a still young airline at a difficult stage in their growth.

 

[rollo]

Norwegian are suffering delays, cancelations and unscheduled fuel stops on some of their new 737 routes hope Primera are taking notes.

 

[Jerry]

The MAX aircraft have now started to be deployed TATL so hopefully no more fuel stops.

 

[Ianbutty]

I would not be surprised that when Primera is a success other loco airlines follow suit and see the BHX long haul potential. Maybe not just TATL either. So Norwegian would be wise to stick a round.

 

[Brum X]

I would not be surprised that when Primera is a success other loco airlines follow suit and see the BHX long haul potential. Maybe not just TATL either. So Norwegian would be wise to stick a round.

If Norweigan are around, on the dried plum forum they are suggesting the financial markets are not happy with the set up of this airline and are very worried.

 

[nwoody2001]

2018 Passenger Predications

So as we go into the Autumn of 2017 when the key airline announcements are due from airlines stating their vision/intentions for 2018, I thought I would ponder on what potentially is ahead. So here are my thoughts...

New Routes in 2018 (Confirmed)

Jet2.com – Almeria (2x weekly), Antalya (2x weekly), Dalaman (2x weekly), Halkidiki (1x weekly), Kos (2x weekly), Krakow (2x weekly), Larnaca (2x weekly), Malta (1x weekly), Naples (2x weekly), Pisa (3x weekly), Rome (FCO) (2x weekly), Split (2x weekly), Thessaloniki (2x weekly), Zakynthos (2x weekly).

Primera Air – Boston (4x weekly), New York (EWR) (7x weekly).

Thomas Cook – Bodrum (1x weekly), Gerona (1x weekly), Thessaloniki (1x weekly), Varna (1x weekly).

Thomson – Hurghada (1x weekly), Podgorica (?x weekly)

Winter Growth

Based on the fact that many of the airlines that started in 2017 did so in March/April, growth witnessed in 2017 should continue until March 2018. As such, average growth since March 2017 is 19.2%. This equates to an additional +450,000 Pax.

Airline Growth

Aer Lingus = Additional +30,000 seats through increase capacity to Dublin (Winter 2017/18)

CSA Czech = Additional +5,000 seats through increase capacity to Prague (Summer 2018)

EasyJet = Additional +24,000 seat through new summer route to Geneva (Summer 2018)

Jet2.com = Additional +300,000 seats through increase capacity and 14 new routes (Summer 2018)

Primera Air = Additional +135,000 seats through 2 new routes (Summer 2018)

General Airport Growth/Maturity

On the assumption that new and existing routes will continue to mature and has been the case over the last 5 years, allow for 2% general growth on top of 2017 figures. This equates to an additional +260,000 Pax

Airline Losses

Emirates = Reduction of -13,000 seats from 3x daily flights to 2x daily flights (Jan-Oct 2018)

Norwegian = Reduction of -68,000 seats dropping 3 Spanish routes (Jan-Oct 2018)

United Airlines = Reduction of -82,000 seat dropping 1 daily routes (Jan-Oct 2018)

Vueling = Reduction of -78,000 seat dropping 3 Spanish routes (Jan-Oct 2018)

Total Growth* for 2018 so far= +913,000 Pax.

Assuming we achieve 13.3m passengers in 2017, this would equate to a total of 14.2m in 2018, or a growth rate of +6.9%

(* = assuming an 80% average Load Factor converting seats to pax!)


Airlines to watch for 2018….

Air India – They have had a great year so far with double digit growth figures and now LF into the mid-high 80’s pretty consistently. Will they grow? Will we see the rumoured direct flights to Amritsar or Toronto?

BMI Regional – They have a nice little niche set-up at Birmingham and I’d like to think there are another few routes they could service. Watch this space maybe?

British Airways – Started weekend charters in 2017 and schedule suggests they will return in Summer 2018. Same flights or will they add more?

Flybe – We know they are likely to reduce the base by circa 2 A/C but they want to make their aircraft work harder by increasing utilisation. What impact will this have on capacity?

Jet2.com – I suspect that they are happy with 14x new routes for the summer schedule, but what do they have in store for Winter 2018? I would expect some routes to go all year round but hopefully a few new city breaks and increase in capacity will be likely. Will unlikely find out until October this year however.

Monarch – Well they are going in for battle with jet2.com and we know they will be getting 3x new 737 Max in Q2 of 2018. Whilst the 737’s will replace their fleets, I don’t suspect this will be from Day 1, which hopefully means growth. Hopefully some more routes from them to come?

Norwegian – I am assuming they have gone but talk about unpredictable. Lost interest in short-haul non-scandinavian routes form the UK regions it seams but that doesn’t mean they won’t return. I’m not holding out hope however.

Primera Air – Well we are pretty certain (as certain as you can be) that there is more to come, with reports suggesting between 1-2 more routes to be announced next month. Toronto looking likely but where else? Definitely watch this space!

Qatar Airways – Reduced from 8 to 7 weekly from their launch, will they increase capacity back? Qatar are of course having their own problems, and signs suggest that the MEB3 are starting to lose their shine regarding massive growth. However, with Emirates reducing and a new passions for battle with due to political tension in the region, could we see Qatar go in for battle with increases in capacity?

Ryanair – Anyones guess. From big growth in Summer 2017 to reductions in Winter 2017, who knows what these guys may do? I think they have some good scope at BHX but do they have the appetite?

Thomson/Thomas Cook – Again, they have announced new routes which is good but many routes often fail to launch or are just about moving deckchairs around the ship? Are they growing?

Turkmenistan – Their terminal decline seems to have slowed and passenger numbers seem to have stabilised (at a low level). But they are loyal to BHX and have added a new weekly rotation for next year. But t what impact?

Vueling – was it something we said? All but their Barcelona and Paris routes have gone and I hope they stay. I wouldn’t be expecting new routes but who knows? Again, your guess is as good as mine!

Wizz Air – Now come on Wizz, what is going on? We offer you average monthly loads will into the 90’s on nearly all your routes. We know they got scared following Brexit, but have stated that in 2018, they will increase capacity in the UK by 25%. I hope we are in for a chance of growth here at least!!!

And then the wild card - do we think we will see any new airlines here at BHX. Primera Air was/is a curve ball for many. what else does BHX up its sleeve???

Conclusion

So that is my view as of the middle of August. I could indeed be wrong and as the above suggests, a lot can change Airlines are fickle bunch.

However, assuming no more shock exits from the BHX portfolio and that the economy doesn’t take a nose-dive (lets save that for ‘Brexit 2019’), I think we have a decent amount to look forward to. Do I think we can sustain the growth we’ve seen in 2017 – no. But based on the above, I think a growth rate of between 7.5-10.0% is definitely achievable? Let’s just hope the airport infrastructure can cope and doesn’t start to hold us back!

14,500,000 Pax in 2018 anyone????

 

[Brum X]

That was a great report Neil as always, I felt as if I was going on a journey with you whilst reading from top to bottom.

Great stuff

 

[IanFarquharson]

Great summary Neil, from what I know I have nothing more to add !

 

[Brum X]

Great summary Neil, from what I know I have nothing more to add !

Apart from one of the above airlines hopefully adding x 3 new routes ??

 

[andrew.clarkson]

Hi there Brumx and all, I think the only real thing we are waiting for are any new route announcements from any new airlines.....AndyC.

 

[IanFarquharson]

Apart from one of the above airlines hopefully adding x 3 new routes ??

Touched on in Neil's summary

 

[nwoody2001]

...woohoo, seems that some of my predictions may come true ;o)

 

[Ianbutty]

Loved the analysis. Hopefully more surprises. I suspect Wizz will see the light before long. My favourite for the 3 new routes.

 

[Brum X]

Hi there Brumx and all, I think the only real thing we are waiting for are any new route announcements from any new airlines.....AndyC.

Indeed Andy, any new route or routes would be welcome.

 

[thunderchild]

Wizz - Chisinau, Iasi, Riga

 

[58terminus]

On the assumption that new and existing routes will continue to mature and has been the case over the last 5 years, allow for 2% general growth on top of 2017 figures

I too liked the analysis.Just hoping your not the guy who wrote my pension plan.

 

[58terminus]

Touched on in Neil's summary

Really?Reading Neil's summary it could be any of 7 or 8 none of which would come as a massive surprise.
Neil is speculating so maybe you could speculate on which one you think is the most likely.
I think Monarch.Which airline in Neils post do you think it might be?

 

[Ray Finkle]

Well this October really has been a memorable month, calling it a roller coaster would be an understatement.

Monarch and Norwegian gone and Vueling cutting right back are really out of the airports hands. Air Transat and Aegean were two airlines that saw tremendous figures in the peak periods but couldn't get the yields in the quieter months either side, any route that is only profitable for 8/10 weeks per year is always vulnerable.

So we look to the future, 15 new routes from Jet2, four new routes from Thomas Cook, six from TUi and three from Primera. We've not heard anything from Ryanair for a while, although I wouldn't bank on them, Blue Air are rumoured to be looking at basing an aircraft and Primera are investigating the possibilities of some short haul. Hopefully we may also have a surprise or two that nobody saw coming.

There is no doubt that 2018 will be a tough year but beyond that I think we'll get back to positivity.

Twenty nine new routes confirmed so far.

February

2nd Jet2 - Rome Fiumicino

March

30th Jet2 - Antalya
30th SAS - Stockholm

31st Jet2 - Larnaca

April

1st Jet2 - Malta

May

2nd Jet2 - Naples

3rd Jet2 - Kos
3rd Jet2 - Thessaloniki
3rd Jet2 - Almeria
3rd Jet2 - Pisa

4th Thomas Cook - Girona
4th Thomas Cook - Bodrum
4th Jet2 - Dalaman
4th TUI - Venice
4th TUI - Izmir

5th Jet2 - Zakynthos

6th Thomas Cook - Thessaloniki
6th Jet2 - Split

16th TUi - Podgorica

18th Primera Air - New York Newark Liberty

21st TUi - Hurghada

22nd Thomas Cook - Varna

25th Jet2 - Venice

26th Jet2 - Dubrovnik

29th Jet2 - Bodrum

June

22nd - Primera Air - Boston Logan

23rd - Primera Air - Toronto Pearson

December

19th - TUi - Langkawi

26th - TUi - Bangkok