Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.

Foxtrots – leading the industry in a dance.


WYSKs: France to build airport folly; Russia inbound loss; SAGging in May – Singapore Airlines Group; Fast air in the US.

WYSK = What You Should Know.


France to build airport folly

France has decided (again) to build a new airport 30km from Nantes in the northwest. It is planned as an international gateway to west France.


There is no known demand by travellers or airlines for such an airport. The demand would be to serve the city, which has a 285,000 population.


And despite that ‘international gateway’ aim, the new airport has a French name – Aeroport du Grand Ouest, say AGO.


Nantes already has an airport. Only 8km from town, in 2015 it handled 4.4mn passengers, +5.7%. Its capacity is 3mn. Some say it could be expanded to 4mn capacity. We reckon it could go to 6mn with better traffic management.


There are about eight airlines that use the current airport on a year-round basis, and will presumably be happy to move to AGO.


Building AGO is expected to cost US$644mn (€580mn). Opening capacity would be 4mn passengers (ie below current actuals), growing to 9mn in 2050. That indicates authorities know it will be a failure in money terms – an average annual growth of just under 4%.


Based on the 4mn passengers, the airport will cost US$161 per passenger to build, US$72 on 9mn. However, these cost estimates are old, and inevitably go over budget on such grand projects. We expect AGO to cost closer to US$1.25bn – thus US$330 and US$139 per passenger.


AGO is planned to have two runways, although only one is needed for the forecast opening traffic volume.


Nantes is considered the ‘capital’ of Brittany. Paris is 2-hours away by TGV.



Russia inbound loss

Not only is outbound travel from Russia falling. The same is happening for inbound travel, including of course, the all-important visitor spend.


Based on Q1 indicators, visitors to Russia will spend only US$6.3bn over all-2016. That would put Russia on a level with, say, Norway, or below Hungary.


In addition, that figure would be about half Russia’s peak, in 2013.


(We have worked on data from the World Tourism Organization for these findings.)



SAG in May – Singapore Airlines Group

Middling Month of May. Seat sales at parent airline SIA grew 4% over Jan-May. That may not look impressive, but it is better than earlier years – -1% for the same period in 2015, flat 2014, +3% 2013.


However, there are a number of items that should be on SAG’s ‘To Fix’ list:

-Tiger seat sales flat in the month although +3% YTD (our estimate). This is bad for an NFA*. But the reason is known – SAG is growing Scoot at the expense of Tiger.

-Seat factors; not easy to read these, but here goes:


-At SAG it is 76% +1pt YTD (our estimate).


-For an FSA* that would be fair, although it should be on 80%.


-But that 76% incorporates SFs of two NFAs……which would make 76% bad……but with Silk, operating hard-to-fill routes as a regional FSA, it makes the SAG total, once again, ‘fair’.


-One day, SAG will accept market realities and either make Silk an LCA*, or shut the airline down and operate its flights under the SIA brand, and/or with one of its NFAs.


-Scoot’s fast growth (see below) hides its low seat factor – 82% YTD. It needs at least 85% and aiming for 90%.


-Tiger is also at 82%. Same comments as for Scoot, but given Tiger’s business circumstances (an artificially-restricted operation) these results are fair. As an established NFA they should be higher, but those operational limitations change the situation.


The good news:

-Silk +12%; good for a mature airline.


-Scoot +50%. Good, even for an NFA, but to be interpreted against Tiger’s emasculation to give Scoot its growth, see above.


*Notes: FSA = full-service-airline. LCA = low-cost-airline. NFA = no-frills-airline. See earlier posts for our definitions for these three types of airline.



  1. Fast air.

International air passenger traffic to-and-from US is growing fast – particularly impressive, given the size of the market.


New Q1 data (from NTTO – National Travel and Tourism Office) show seat sales grew 7%. Of the regions we track (Asia Pacific, Europe, North America, and sometimes Dubai/UAE) the big moves in the big markets were UK +6%, China (half the UK size) +24%. The biggest AsPac country-pair is still Japan; it grew only 3%, and it is still below its peak in 2013.


For the big Gulf-3 airlines, we do not track Qatar, but the UAE (Emirates, Etihad) was +12%. The UAE market is big – almost the size of France – and including Qatar would make it the same size as France. (Remember, however, that some (most?) of this is not UAE-bound, but onward transit traffic to Middle East, East Africa, Indian sub-continent, the stans, and others.


The March terrorist attack in Brussels caused the expected fall on the US air traffic, pushing Q1 down to -10%. Interesting is that France is a good +6%, with each of the three months growing – despite Paris suffering a big terrorist attack last November.



The Fox

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