Dobbo
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- Oct 27, 2015
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- #81
I thought I'd share a few of my thoughts on planned developments for 2017, and what I expect to hear for 2018. As ever for me, my focus is on Long Haul.
The first point to make is that the economic outlook is significantly more uncertain for 2017-2020 that it was this time last year. Elections generate uncertainty (as opposed to catastrophe) and I do not expect Brexit or trump to have a GFC type effect as seen in 2008-10. It may hold back some of the more exotic launches.
The second point to make is that the south east runway capacity issue is not going away for at least the next 15 years, most likely 25+ years. MAN is well placed to take advantage of this and the fundamentals of MANs business are strong.
With this in mind, I turn my attention to some of the selected routes from MAN.
New York - there is a lot of competition on this route, with multiple operators operating a daily flight. I think the ones to keen an eye on are VS, TCX, AA and UA, here's why (I admit this is most of them!).
San Francisco - to go from having no one on the route to having two competing airlines is a major development. Whether either of VS or TCX can take the route year round will be an interesting one to keep an eye on.
Los Angeles - TCX have increased this slightly in 2017. Might we see a so called "full service" carrier on the route? VS have been strongly tipped for this, and if SFO goes well, I think we might hear something in the early part of 2017. BA have also been tipped on here, but this seems to be quite some distance away.
Chicago - this is one to keep an eye on as part of the rumoured AA/BA switchover. The passenger volumes to ORD have collapsed and presumably now go via DUB. If AA cannot get this to work year round it might be vulnerable to UA. I would hope to see a solid performance from AA in 2017, but the route has got a reputation that I fear it might be difficult to recover from this.
Toronto - we have seen increases from AC Rouge and Transat for 2017. I wonder whether a longer season might be forthcoming in 2018. AC are expanding their fleet, so I expect to see mainline in the next couple of years. Against the backdrop of all this, what are Westjet thinking?
Vancouver - Transat have increased this in 2017, rouge's plans remain uncertain. Watch this space.
Singapore - we expect to see the A350 in 2017. When, we don't know. Since going non-stop we think the route has performed well, but the Houston sector remains a challenge if it is to go daily. I think we will see some form of adjustment as SQ like to see a daily service to their European destinations.
Hong Kong - we think CX are going daily on the A350 from June. Lets see how that beds in, and whether CX might make further increases and adjustments moving forwards.
Beijing - we think Hainan are going daily to MAN with a 4x weekly DUB tag. Might they consider the B789?
Shanghai (proposed new route) - now one of MAN's most long standing rumours. I think we will see this start in 2017, with an announcement in the early new year.
Bangkok (proposed new route) - we think one of the world's largest unserved markets will be served directly in 2017 by TG. I would like to see a daily service, but perhaps 4/5 weekly is a reasonable expectation.
Delhi (proposed new route) - supposed AI charters in 2017. I think 2017 is the year we will hear about a more permanent presence.
Mumbai (proposed new route) - a strongly rumoured SIN-BOM-MAN flight on Scoot. Other one to look for is Vistara (another SQ affiliate).
Tokyo (proposed new route) - MAN has recently gone public about this, and I expect it to be one of their key targets for 2018. I think we might hear something more solid on this in 2017 (e.g. who is more serious, JAL or ANA) but don't expect to see any hardware until 2018 at the earliest.
Dubai - goes to three daily A380 next month. The next stop is clearly 4x daily (that is incredible) but do they go 3xA380 and 1x B77W or 2 of each? Its a tough life. Might EK be in the market for 5th freedoms from MAN?
Abu Dhabi - Etihad have a strong presence at MAN, but have been at 2x daily for some time. Do they look to increase frequency in 2017? I'm not so sure, but we could see a consistent B77W product before a frequency increase in 2018.
Doha - I do not expect a change from Qatar for some time!
Muscat - looking forward to seeing how they bed in.
Kuwait (proposed new route) - bit of a left field one, but they seem to be saying in the local press that they want to fly to Manchester. Lets see what happens.
Cape Town/Johannesburg (proposed new routes) - we think CPT is with TCX. JNB presumably will be a Norwegian route. I expect CPT to launch in 2017 with news on JNB shortly thereafter.
Addis Abba (proposed new route) - another one to appear in the MEN in 2016. ET rarely do European flying without a tag, so might this continue to Scandinavia? Additionally, with USPC at MAN, might ET see a better return in flying to the US from MAN over DUB?
Throwing around one or two others, changes to the Chinese market happen very quickly so almost anything could happen. I wonder whether Jordanian might have an interest, and if AA/BA do a job swap, might Dallas come back on the radar? Detroit also might be on DL's radar for 2018, and San Diego on TCX for the same period.
In summary, a huge amount to keep an eye on, much of which seemed scarcely believable a couple of years ago.
The first point to make is that the economic outlook is significantly more uncertain for 2017-2020 that it was this time last year. Elections generate uncertainty (as opposed to catastrophe) and I do not expect Brexit or trump to have a GFC type effect as seen in 2008-10. It may hold back some of the more exotic launches.
The second point to make is that the south east runway capacity issue is not going away for at least the next 15 years, most likely 25+ years. MAN is well placed to take advantage of this and the fundamentals of MANs business are strong.
With this in mind, I turn my attention to some of the selected routes from MAN.
New York - there is a lot of competition on this route, with multiple operators operating a daily flight. I think the ones to keen an eye on are VS, TCX, AA and UA, here's why (I admit this is most of them!).
- VS are picking up from DL on the A333 is a major development, if it continues year round it could snatch a significant amount of business from UA and AA on the B752 in the winter.
- UA might need to think about increasing capacity at EWR to compensate for the loss of IAD and shore up their core route. If they do nothing, it is only a matter of time before EWR is suspended.
- AA are in a similar position to UA, but we think we know that BA are starting to take more of an interest in MAN and it is here that we might need to take note.
- TCX have been threatening to go more than daily, and this may be something that will be announced in 2017
San Francisco - to go from having no one on the route to having two competing airlines is a major development. Whether either of VS or TCX can take the route year round will be an interesting one to keep an eye on.
Los Angeles - TCX have increased this slightly in 2017. Might we see a so called "full service" carrier on the route? VS have been strongly tipped for this, and if SFO goes well, I think we might hear something in the early part of 2017. BA have also been tipped on here, but this seems to be quite some distance away.
Chicago - this is one to keep an eye on as part of the rumoured AA/BA switchover. The passenger volumes to ORD have collapsed and presumably now go via DUB. If AA cannot get this to work year round it might be vulnerable to UA. I would hope to see a solid performance from AA in 2017, but the route has got a reputation that I fear it might be difficult to recover from this.
Toronto - we have seen increases from AC Rouge and Transat for 2017. I wonder whether a longer season might be forthcoming in 2018. AC are expanding their fleet, so I expect to see mainline in the next couple of years. Against the backdrop of all this, what are Westjet thinking?
Vancouver - Transat have increased this in 2017, rouge's plans remain uncertain. Watch this space.
Singapore - we expect to see the A350 in 2017. When, we don't know. Since going non-stop we think the route has performed well, but the Houston sector remains a challenge if it is to go daily. I think we will see some form of adjustment as SQ like to see a daily service to their European destinations.
Hong Kong - we think CX are going daily on the A350 from June. Lets see how that beds in, and whether CX might make further increases and adjustments moving forwards.
Beijing - we think Hainan are going daily to MAN with a 4x weekly DUB tag. Might they consider the B789?
Shanghai (proposed new route) - now one of MAN's most long standing rumours. I think we will see this start in 2017, with an announcement in the early new year.
Bangkok (proposed new route) - we think one of the world's largest unserved markets will be served directly in 2017 by TG. I would like to see a daily service, but perhaps 4/5 weekly is a reasonable expectation.
Delhi (proposed new route) - supposed AI charters in 2017. I think 2017 is the year we will hear about a more permanent presence.
Mumbai (proposed new route) - a strongly rumoured SIN-BOM-MAN flight on Scoot. Other one to look for is Vistara (another SQ affiliate).
Tokyo (proposed new route) - MAN has recently gone public about this, and I expect it to be one of their key targets for 2018. I think we might hear something more solid on this in 2017 (e.g. who is more serious, JAL or ANA) but don't expect to see any hardware until 2018 at the earliest.
Dubai - goes to three daily A380 next month. The next stop is clearly 4x daily (that is incredible) but do they go 3xA380 and 1x B77W or 2 of each? Its a tough life. Might EK be in the market for 5th freedoms from MAN?
Abu Dhabi - Etihad have a strong presence at MAN, but have been at 2x daily for some time. Do they look to increase frequency in 2017? I'm not so sure, but we could see a consistent B77W product before a frequency increase in 2018.
Doha - I do not expect a change from Qatar for some time!
Muscat - looking forward to seeing how they bed in.
Kuwait (proposed new route) - bit of a left field one, but they seem to be saying in the local press that they want to fly to Manchester. Lets see what happens.
Cape Town/Johannesburg (proposed new routes) - we think CPT is with TCX. JNB presumably will be a Norwegian route. I expect CPT to launch in 2017 with news on JNB shortly thereafter.
Addis Abba (proposed new route) - another one to appear in the MEN in 2016. ET rarely do European flying without a tag, so might this continue to Scandinavia? Additionally, with USPC at MAN, might ET see a better return in flying to the US from MAN over DUB?
Throwing around one or two others, changes to the Chinese market happen very quickly so almost anything could happen. I wonder whether Jordanian might have an interest, and if AA/BA do a job swap, might Dallas come back on the radar? Detroit also might be on DL's radar for 2018, and San Diego on TCX for the same period.
In summary, a huge amount to keep an eye on, much of which seemed scarcely believable a couple of years ago.
