Ascend presentation to World Routes Strategy Summit Sep 2016

flightglobal.com/consultancy

Market Growth:

Constraints & Opportunities

25th September 2016

Richard Evans

1

flightglobal.com/consultancy 2

Focus on China & Asia

Compare & contrast with other regions

What factors impact growth?

Where are the opportunities?


Asia has huge growth potential

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Seats per thousand pop'n GDP per capita

China appears under-served, compared to other Asian countries

Source: FlightGlobal schedules, World Bank


Airline fleet composition varies widely by region

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Regional Turboprops Regional Jets Narrowbody Jets Widebody Jets

Far fewer regional jets in Asia, but more twin-aisles

Source: Flight Fleets Analyzer, Passenger/Combi/QC usage.


Airline fleet composition varies widely by region

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This shows up more clearly in terms of fleet percentage

Source: Flight Fleets Analyzer

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Africa Asia Pacific Europe Latin America Middle East North America

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Asian sub-regions also show key differences

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China Indian sub-continent SE Asia Australasia NE Asia

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China has very few regional aircraft, and surprisingly few WBs

Source: Flight Fleets Analyzer


Widebody usage has declined

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2006 2011 2016 Backlog 2006 2011 2016 Backlog

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Trend has been to single-aisles, driven by Intra-Asian growth

Asia, excluding China China

Source: Flight Fleets Analyzer, Flight Ascend Consultancy analysis


Rapid capacity growth on many Asian routes

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More frequencies, but little aircraft size increase

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Asia-N Am Asia-WEurope

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China-WEur

China Dom. China-Int'l CTU-all PEK-Dom. PEK-Int'l IndonesiaDom.

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Frequency Growth Size growth Distance growth Av seats 2009 Av seats 2016

Source: FlightGlobal schedules data, Aug 2009 to 2016


Top 5 airports in each region now a similar size

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All 15 airports handling >55 million passengers per year

Asia N America Europe

Source: FlightGlobal schedules data, Aug 2016


Asian airports have lower concentration of airlines

Typically less dominated by one hub airline – less transfer traffic

PEK

PVG

HKG

CTU

CGK

BKK

HND

LHRFRA

CDG

IST

DFWATL

ORD

LAX

Source: FlightGlobal schedules data, number of seats offered Aug 2016


Intra-Asian capacity/service level examples

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Air China China Southern China Eastern Cathay/Dragonair Korean Air Garuda

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PEK

SHA

CTUICN

HKG

PVG

CAN

Chinese hubs using similar aircraft sizes & frequency levels

CGK

Source: FlightGlobal schedules data, Aug 2016, bubble size proportional to no.of destinations served


Intra-Asian capacity/service level examples

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Air China China Southern China Eastern Cathay/Dragonair Korean Air Garuda Delta

12

PEK

SHA

CTUICN

HKG

PVG

CAN

US hubs use smaller aircraft, but offer much higher frequency

CGKATL

Source: FlightGlobal schedules data, Aug 2016, bubble size proportional to no.of destinations served


Chinese airports suffering from delays

Sc

he

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hts

/mo

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On-time departure

SHA

Prime cause is ATC capacity constraints

Source: FlightStats, April 2016


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Aircraft size distribution at major airports

Opportunity exists to move to larger NBs or small WBs

Atlanta: 2500 flights per day, 5 runways

Beijing Capital: 1650 flights, 3 runways

Heathrow: 1350 flights, 2 runways

Source: FlightGlobal schedules data, Aug 2016


Intercontinental routes from China

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Routes to Europe & N America, Aug 2009

Source: FlightMaps Analytics, flights >5000km



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Routes to Europe & N America, Aug 2016




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New routes, flown in Aug 2016 but not in Aug 2009



Conclusions

Most countries in Asia are still in the relatively early stages of air transport development

Liberalisation is ongoing, but still much government involvement in

airlines/airports/ATC/fare levels

Airline consolidation likely over the coming decade

Initially domestically, as competition leads to over-provision of air service in some

markets

Regional / international consolidation more complex

In terms of constraints, runway/terminal capacity is being provided, but ATC is usually the

limiting factor in more developed markets

Opportunities for optimisation of networks, more transfer traffic at new airports, upsizing of

aircraft to help alleviate congestion, and new long-haul connections as economies grow


Thank you

Richard [email protected]

Tel: (44) 7717 730933

19

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Ascend presentation to World Routes Strategy Summit Sep 2016

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