Industry Monitor. Issue 193. 04/05/2017 Page 1 © EUROCONTROL 2017

European flights increased by 4.5% in March 2017 compared with March 2016, matching the baseline forecast. Preliminary data for April 2017 show an increase of 3.3% in flights on April 2016.

ICAO reported that average global passenger load factor (scheduled services) reached 80.3% in 2016 compared with 80.4% in 2015 and was the second highest level in the last ten years.

Oil prices were up to €51 per barrel in April from €50 per barrel in March.

EUROCONTROL Statistics and Forecasts 1

Other Statistics and Forecasts 4

Passenger airlines 5

Airports 7

Aircraft Manufacturing 8

Regulation 9

Oil 9

Fares 9

EUROCONTROL Statistics and Forecasts

European flights (ECAC – European Civil Aviation Conference area) increased by 4.5% in March 2017 compared with March 2016 and were in line with the baseline forecast published in February 2017. The traffic increase was partly attributable to the Easter effect (in March last year) which counterbalanced the impact of industrial action in France, Germany and Italy that led to the cancellation of circa 4,000 flights. Preliminary data for April 2017 show an increase of 3.3% in flights on April 2016 (Figure 1). The business aviation segment recorded the fastest growth in March 2017 (vs. March 2016) and jumped to a 9.3% growth rate thanks to a robust increase of flows within Europe along with a recovery of flows to/from the Russian Federation and to/from Egypt. The all-cargo segment continued its strong performance and climbed to a 9.1% growth rate in March from 3.5% growth in February. The low-cost and traditional scheduled segments were up 5.4% and 3.1% respectively. Although still the weakest market segment, charter reduced its decrease to -2.3% (from -6% in February) owing to the continued recovery of flights between Ukraine and Egypt, between the United Arab Emirates and the Russian Federation and between Turkey and the Russian Federation. The airlines which added the most flights to the network on a daily basis in March 2017 (vs. March 2016) were Ryanair (+153 flights/day), easyJet UK (+97 flights/day), SAS (+86 flights/day), Lufthansa and LOT (each +60 flights/day).

Industry Monitor The EUROCONTROL bulletin on air transport trends

Issue N°193. 04/05/2017

Industry Monitor. Issue 193. 04/05/2017 Page 2 © EUROCONTROL 2017

In March 2017 twelve states (Figure 2) contributed the most to the growth of local traffic (excluding overflights) in Europe by adding more than 50 flights per day. With 239 extra daily flights, UK maintained its leading position and was followed by Germany which added 186 daily flights. Belgium/Luxembourg came next with 127 extra daily flights and joined the leading trio for the first time thanks to a robust international arrival/departure flow which increased by 15%, a growth rate partly inflated due to the Brussels airport temporary closure in March 2016. France added 126 daily flights owing to a dynamic internal flow. Sweden and Spain added each 97 and 95 daily flights. Norway returned to growth for the first time since July 2014 and added 64 daily flights to the network mainly due to a strong internal flow which grew 8%.The reduction of flights in Turkey since March 2016 is continuing and Turkey recorded 157 fewer daily flights in March 2017 (vs. March 2016) (EUROCONTROL, April).

Figure 1: Monthly European Traffic and Forecast (based on the 7-year forecast Feb 17).

Figure 2: Main changes to traffic on the European network in March 2017.

Industry Monitor. Issue 193. 04/05/2017 Page 3 © EUROCONTROL 2017

The top three extra-European partners in average daily flights on flows in both directions were the United States (799 flights, up 0.5%), the Russian Federation (601 flights, +9.7%) and the United Arab Emirates (335 flights, +1.4%). Based on data from airlines for delays from all causes, the average departure delay per flight in March 2017 decreased by 1.1 minutes to 9.4 minutes per flight. Further analysis of the delay reasons shows that reactionary delay decreased by 0.8 minutes per flight and airline related delay remained stable at 2.8 minutes per flight. Seasonal weather impacted several airports, especially London/Heathrow and to a lesser extent Amsterdam/Schiphol, Istanbul/Atatürk and Barcelona. In March 2017, the percentage of delayed flights on departure (>=5 minutes) was 36.4%, a decrease of 1.4 percentage points compared with the same month in 2016 when a terrorist attack closed Brussels airport and French ATC industrial action resulted in high en-route ATFM delays (Figure 3) (EUROCONTROL, April). Operational data received directly from airlines by CODA describing delays from all-causes for 2016 illustrated a story of poorer on-time performance in 2016, following a year where ATFM en-route delay from ATC industrial actions as well as ATM system implementations drove higher delays for airlines, with the effect of increasing reactionary delay. The average departure delay per flight ranged from a low of 8 minutes per flight in February to a peak of 16 minutes per flight in July. This translated into an annual average all-cause departure delay of 11.3 minutes per flight, an increase of 0.9 minute per flight on 2015. The full report is available here: All-Causes Delay and Cancellations to Air Transport in Europe – Annual 2016 (EUROCONTROL, April).

Figure 3: Delay statistics (all-causes, airline-reported delay – March 2017).

Industry Monitor. Issue 193. 04/05/2017 Page 4 © EUROCONTROL 2017

Other Statistics and Forecasts IATA reported that European scheduled passenger traffic increased by 6.5% in February 2017 (vs. February 2016). Capacity was up by 3.4% and passenger load factors hit 81.1%, a 2.4 percentage point increase on the same month last year (IATA, 6 April). ACI reported that overall passenger counts at European airports saw an increase of 5.5% in February 2017 (vs. February 2016, not adjusted for the leap year). Total aircraft movements were up 3.4% (ACI, 7 April). Preliminary figures from ICAO for 2016 show that total scheduled services worldwide of passenger traffic (measured in RPK) increased by 6.3% in 2016, a deceleration of 0.8 percentage point on 2015. The passenger capacity growth (measured in ASK) grew by 6.4% and was up 0.2 percentage point on the previous year. The average global passenger load factor reached 80.3% in 2016 compared with 80.4% in 2015 and was the second highest level in the last ten years. World freight traffic (measured in FTK) increased by 2.6% in 2016 and improved by 0.7 percentage point compared with 2015. Europe achieved the biggest improvement and also recorded the strongest growth (+7.6%). For Europe, ICAO preliminary figures on scheduled services for 2016 show that passenger capacity (ASK) which represented 26% of the global capacity, was notably impacted by terrorist attacks and increased by a modest 4% compared to other regions like Middle-East (+10%), Asia/Pacific (+8%), North America and Latin America/Caribbean (each +5%) (ICAO, March). FAA released its forecasts for 2017-2037 and predicts that IFR flights handled at FAA en-route traffic centres will increase to 44.2 million (+2.3%) in 2017 to reach 57.7 million in 2037. The average annual growth rate for the 21-year forecast period is 1.4% and remains unchanged compared with the previous forecast (FAA, 21 March).

Figure 4: Main carriers’ traffic statistics.

Industry Monitor. Issue 193. 04/05/2017 Page 5 © EUROCONTROL 2017

Passenger airlines

Capacity, costs and jobs

Alitalia faces liquidation since its workforce rejected the restructuring plan consisting of 1,700 job cuts and including pay cuts; a pre-condition to its recapitalisation. The airline has filed for extraordinary administration and received a bridge loan from the Italian government to maintain normal operations during the six-month process during which administrators will investigate whether the airlines’ finances can be saved. Etihad Airlines acquired a 49% stake of Alitalia and already rescued it from liquidation in 2014 (Alitalia, 25 April & 2 May). Long-haul low-cost Boost, Air France’s new subsidiary reportedly plans to launch 26 medium- and long-haul routes shifted from Air France current routes. Boost would launch medium-haul flights in Fall 2017 and long-haul flights in Summer 2018 although the creation of Boost is still under discussion with cabin crew and pilots unions (SNPC-FO, 8 April). Spanish low-cost Volotea has launched a new base in Genoa, its fourth in Italy and will operate seven internal routes and six new international destinations in Mallorca, Ibiza, Menorca, Athens and Santorini with two Boeing B717 aircraft. The carrier will take delivery of six Airbus A319 aircraft in 2017 to bring its fleet to 28 units of which 18 Boeing B717 aircraft. To meet its expansion, Volotea plans to increase its workforce by 17% with the recruitment of 150 employees among which circa 100 pilots and cabin crew staff for its nine bases (Volotea, 12 & 28 April). Azerbaijan Silk Way has placed an order for 10 Boeing B737 MAX 8 passenger aircraft for deliveries scheduled between 2018 and 2020. The cargo carrier currently operates eight Boeing B747 freighters (Boeing 14 April). Air France took delivery of its second Boeing B787 Dreamliner on 20 April and plans to have three more units delivered by the end of 2017 to reach a total fleet of six Dreamliners by summer 2018 (Air France, 20 April).

Figure 5: Main carriers’ load factors.

Industry Monitor. Issue 193. 04/05/2017 Page 6 © EUROCONTROL 2017

Estonian national flag carrier, Nordica will add two Bombardier CRJ900 aircraft to bring its fleet to 8 units (six CRJ900 and two CRJ700 aircraft). The airline, created after Estonian Air’s bankruptcy in 2015, now operates flights in partnership with LOT. In March, Nordica’s subsidiary Regional Jet signed a six-year agreement with SAS for the operation of four ATR aircraft on short-haul destinations to and from Copenhagen (Nordica, 24 March & 17 April). Ryanair shifted from a no frills point-to-point model to a hub-and-spoke service that enables connecting flights on the carrier’s network. From September onwards, Ryanair will also provide feeder traffic for flights operated by other airlines including Norwegian Air Shuttle and Aer Lingus (Ryanair & Bloomberg, 6 April).

Traffic Statistics: March Update

Figure 4 and Figure 5 compare March 2017 figures with March 2016 figures for the European carriers. In addition to the number of passengers (PAX), passenger capacity is measured in available seat kilometres (ASK), traffic is measured in revenue passenger kilometres (RPK) and load factor as a percentage (%). Following airberlin restructuring, we have stopped including them in the traffic statistics and have introduced Pegasus Airlines, the Turkish low-cost operator standing as the 10th busiest carrier in 2016.

Routes, Alliances, Codeshares

Ryanair has announced five new routes from London Stansted to Denmark (Aalborg), Ukraine (Kiev and Lviv), Romania (Oradea and Pardubice) as part of its Winter 2017 schedule. The carrier has already launched nine new routes from Stansted for this Summer schedule (Ryanair, 13 April). Norwegian will start three new long-haul services from London Gatwick to Seattle, Denver and Singapore (the first in Asia) from September onwards. To date during this year, the low-cost carrier has planned to launch a total of 19 transatlantic routes from nine European airports and took delivery of seven Boeing B737-800 aircraft and one Boeing B787-900 aircraft (Norwegian, 6 April).

Figure 6: Main departure airports in Europe during 1Q2017.

Industry Monitor. Issue 193. 04/05/2017 Page 7 © EUROCONTROL 2017

Air France-KLM and Singapore Airlines have signed a codeshare agreement whereby the latter will place its code on European flights from Paris CDG to 10 destinations in Bordeaux, Lyon, Marseille, Nice and Toulouse, Aberdeen, Edinburgh, Newcastle and Lisbon. In return Air France will place its code on flights between Singapore to Melbourne and Sidney as well as on Singapore Airlines’ regional subsidiary Silk Air on flights to Kuala Lumpur, Penang and Phuket (Air France-KLM, 13 April). Germania will operate four new routes from Toulouse to Dubrovnik, Fuerteventura, Funchal and Oujda during summer 2017 (Germania, April). Irish regional CityJet and KLM Cityhopper have signed a new agreement whereby the latter will wet-lease two AvroRJ85 aircraft from CityJet to double daily frequencies (from 4 to 8) between Amsterdam to London City (KLM Cityhopper, 5 April).

Airports Heathrow was the busiest airport (based on the average number of departing flights) during the first quarter of 2017 although it recorded a minor increase (+0.3%) compared with the same quarter last year (Figure 6). Amsterdam ranked second and passed Paris CDG, Istanbul Atatürk and Frankfurt. Compared with 1Q2016, Munich, London Gatwick and Amsterdam saw the biggest increases in flights (each +6%) whereas Istanbul Atatürk recorded a 8% decrease and was followed by Rome Fiumicino with a 5% decrease. Passenger traffic and aircraft movements during the first quarter of 2017 at top five European airports (based on the number of flights) were as follows (growth on the same period in 2016 not adjusted for the leap year): Passenger traffic Aircraft movements 1. London Heathrow 17.2 million (+ 2.2%) 111K ( - 0.8%) 2. Amsterdam Schiphol 14.1 million (+ 8.6%) 108K* (+ 5.3%) 3. Paris CDG 15.0 million (+ 4.3%) 107K (+ 0.6%) 4. Frankfurt 13.1 million (+ 1.5%) 105K (- 1.2%) 5. Istanbul Atatürk 12.8 million (- 7.0%) 98K (- 8.3%) * excluding general aviation

(source: airport reports, April)

Figure 7: Brent and Kerosene prices.

Industry Monitor. Issue 193. 04/05/2017 Page 8 © EUROCONTROL 2017

Top five airports in Europe for the business aviation IFR traffic during the first quarter of 2017 were as follows:

Rank Airport Name Average Daily Movements Growth on 2016 (Jan to Mar)

1 Paris Le Bourget 126 10%

2 Geneva 83 5%

3 London Luton 72 5%

4 Zurich 60 -1%

5 Farnborough 58 5% Source: EUROCONTROL/STATFOR

The share of the business aviation segment in the total number of flights was 7% in 1Q17. Business aviation flights increased by 8% in 1Q17 compared with 1Q16 (adjusted for the leap year). Top 10 airports in Europe for low-cost airlines traffic during the first quarter of 2017 were as follows:

Rank Airport Name Average Daily Movements Growth on 2016 (Jan to Mar)

1 London Gatwick 480 9%

2 Barcelona 474 10%

3 London Stansted 374 -1%

4 Dusseldorf 351 17%

5 Istanbul Sabiha Gökcen 332 -3%

6 Manchester 295 20%

7 Amsterdam Schiphol 281 11%

8 Berlin Tegel 269 -5%

9 Madrid 265 6%

10 London Luton 239 15% Source: EUROCONTROL/STATFOR

The share of the low-cost segment in the total number of flights was 29% in 1Q17. Flights operated by low-cost carriers were up 8% in 1Q17 compared with 1Q16 (adjusted for the leap year). The top five low-cost airlines (Ryanair, easyJet UK, airberlin, Flybe and Vueling) accounted for 56% of the total low-cost traffic in Europe during the first quarter of 2017. Fraport has signed a 40-year concession agreement to operate, maintain and develop 14 Greek regional airports which served a total of 25 million passengers in 2016 (+9% on 2015). The deal includes the three mainland airports of Thessaloniki, Aktion and Kavala and 11 island airports. In addition to Frankfurt, Fraport counted already 8 international airports in its portfolio (Fraport Group, 11 April).

Aircraft Manufacturing

Airbus reported net commercial orders for six aircraft (20 cancellations on 26 gross orders) during 1Q2017 compared with 10 aircraft during the same quarter last year and delivered 136 aircraft (up 8.8% on 1Q2016) (Airbus, April). Boeing recorded 145 net commercial orders during 1Q2017 (vs.78 aircraft during 1Q2016) and delivered 169 aircraft (down 1.2% on 1Q2016) (Boeing and Air Transport World, April).

Embraer delivered 18 commercial aircraft during 1Q2017 (vs. 21 commercial aircraft during 1Q2016) of which 16 E175s aircraft and 2 E190s aircraft (Embraer, April).

Industry Monitor. Issue 193. 04/05/2017 Page 9 © EUROCONTROL 2017

Regulation China and France have signed a new bilateral air service agreement which will more than double the flight frequencies between the two countries, from 50 to 126 weekly flights by 2020. The number of French airlines authorised to fly to China will rise to five from currently three whereas Chinese airlines will increase from six to eight. (Union des Aéroports Français & CAAC, 6 April).

Oil

Oil prices were up to €51 per barrel in April from €50 per barrel in March. Converted indices for Kerosene and Brent are shown in Figure 7.

Fares

Ticket prices in Europe decreased by 3.3% in March 2017 vs. March 2016. This is below the trend (12-month trailing average) shown in Figure 8. A decrease partly attributable to the shift of Easter (in March last year) (Eurostat,19 April). Note: to eliminate the influence of inflation on euro figures, the ticket price is deflated with a price index. The STATFOR deflated ticket prices are estimated in 2015 constant euros. A detailed explanation of the mechanism can be found here.

Figure 8: Deflated ticket prices in Europe.

Industry Monitor. Issue 193. 04/05/2017 Page 10 © EUROCONTROL 2017

© 2017 European Organisation for the Safety of Air Navigation (EUROCONTROL) This document is published by EUROCONTROL for information purposes. It may be copied in whole or in part, provided that EUROCONTROL is mentioned as the source and it is not used for commercial purposes (i.e. for financial gain). The information in this document may not be modified without prior written permission from EUROCONTROL. STATFOR, the EUROCONTROL Statistics and Forecast Service statfor.info@eurocontrol.int www.eurocontrol.int/statfor