What’s working; what’s not. Airlines in Asia Pacific

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What’s working; what’s not. Airlines in Asia Pacific

Our summary of traffic results for the leading airlines in Asia Pacific, excerpts from the current editions of the Travel Business Analyst newsletter, over the first-half.

 

Seat sales at biggest FSAs (full-service-airlines) in Asia Pacific (whole-group results for all), in alphabetical order: Air China +9%; Cathay +2%; China Eastern +9% (our estimate; CE has not published its data for two of the first six months); China Southern +11%; Japan +3%; Singapore +6%.

 

Notes (on notable details):

 

-Air China. International growth +15%.

 

-Cathay. Our perennial question: is it Cathay Dragon or Cathay Pacific that is doing badly?

 

We hope it is CP, because China – the main operating area for CD – is growing fast and so if CD is not also doing well in this market, that would be even worse news for the Group.

 

 

-China Eastern. International growth +9% (our estimate).

 

-China Southern. International growth +18%.

 

-Japan. That low systemwide growth looks unhappily standard for JA. But international is at +7%, shockingly fast for Japan.

 

That is the result of fast growth in four of the first six months, and +12% in June – prompting us to recheck the data to see what had gone wrong! However, we must note it fell -1% in the same 2017 month.

 

 

-Singapore. Significantly, the core SIA airline is now just 57% of the group. That compares with a 63% share for Air France in the AF-KLM group, 58% for British in ICAG, 50% for Lufthansa in its group, 55% for Qantas in its group.

 

That looks good. And now that SAG (our no-longer-true name for the group) plans to follow what we proposed eight years ago – merge Silk into SIA – prospects look better.

 

 

The Fox. Remember, I’m an industry expert in the parallel world.

*Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance.

 

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What’s working; what’s not. Airlines in Europe

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What’s working; what’s not. Airlines in Europe

Our summary of traffic results for the leading airlines (not, where relevant, airline groups) in Europe, excerpts from the current editions of the Travel Business Analyst newsletter, over the first half.

 

Seat sales (RPKs for British; our estimates for Ryan), in alphabetical order: Air France+KLM (starting this year, no longer separated) -0.3%; British +3%; Easyjet +4%; Lufthansa +7%; Ryanair +7%.

 

 

Notes (on notable details; on whole-group for Air France, British (=ICAG), Lufthansa):

 

-Air France group (AFKL). Once again, we assume AF is dragging down group performance, and particularly KLM. AFKL’s no-frills subsidiary Transavia is doing better, although we think it should be above that +7%.

 

AFKL still shows no figures for Joon. Is AFKL cheating investors? Its group total calculates to the addition of AF+KL+Hop+Transavia. So where (and why) is Joon traffic being hidden? The most-likely hiding place is AF’s total. But nowhere does AFKL state this.

 

We are surprised the Euronext stockmarket, where AFKL is listed, tolerates this obfuscation.

 

 

-British (=ICAG). The ICAG group is producing a good +8%; only BA, representing the group’s biggest share at 58%, is slow. Iberia (our estimate) +12%, AerLingus (our estimate) +15%, Vueling (our estimate) +13%.

 

 

-Easyjet. Impressive seat factor, 94%.

 

 

-Lufthansa (LHG). The group is humming along at +12%. Yet even if Austrian +10%, Brussels +11% (our calculation), Swiss +9%, are doing well, we remain struck by fast growth at Eurowings +28% (our calculation).

 

Lufthansa itself, biggest in LHG (57% share) is the slowest, at +7%, but that is still twice as fast as, say, ICAG’s biggest airline, British.

 

 

-Ryanair. Impressive seat factor, 96%.

 

 

-Others of note:

We thought growth at Turkish would slow with its political and terrorism/war episodes, but at +8%, it is picking up again. However, that is partly a Dead Cat bounce as its growth was just +1% in the first-half of 2017.

 

Of regional trends for the Big-3 groups, despite that Asia Pacific is oft-reported as a boom region, it is slower than systemwide growth for the three – +3% for AFKL, -1% ICAG, +4% LHG.

 

 

The Fox. Remember, I’m an industry expert in the parallel world.

 

*Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance.

September travel stocks’ ups and downs

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September travel stocks’ ups and downs

Travel stocks (US, Asia Pacific, Europe) in September. Airlines: biggest growth, Turkish +17%; biggest fall, Jet (India) -35% sic. Hotels: Dusit Thani +13%, Wynn -14%. Tech: Trivago +28% sic, Travelport -9%. Others: Boeing +8%, Thomas Cook -31% sic.

 

Previous month: Airlines: biggest growth, SAS +17%; biggest fall, Jet (India) -9%. Hotels: Belmond +48% sic, Jinjiang -20%. Tech: Trivago +17%, cTrip -5%. Others: Hertz +16%, China Tvl -19%.

 

TBA Travel Stocks Index: World 240, Asia Pacific 97, Europe 214, US 408. Index previous month: World 241, Asia Pacific 103, Europe 218, US 409.

 

NVTT (Net Value Travel Tech) Stocks Index: 141; previous month 141.

 

Stockmarkets. Biggest growth Istanbul +8%; biggest fall India -6%. Previous month: biggest growth New Zealand +4%; biggest fall Madrid -5%.

 

 

Comments:

We have had to flag three stocks with ‘sic’ – because their changes are so big that readers might think there is a mistake. But no, Jet fell -35%, Thomas Cook fell -31%, Trivago grew +28%. (And last month Belmond grew +48%.)

 

This means of course that these are turbulent times. And generally negative – many of those big growths follow falls the month earlier.

 

Overall, our Index for travel stocks in Asia Pacific fell below its 100 starting point.

 

In general, airlines had a bad month – about half were falling. No-frills-airlines as well! In Europe , Easyjet -14%, Norwegian -6%, Ryanair -8%, Wizz -9%. In AsPac Air Asia -8%. Only did Southwest in the US manage growth – +2%.

 

In AsPac, not only is Etihad-owned Jet the worst performer, but is 75% below its end-2017 price!

 

Hotel groups are not having such a good time either. In the US, for instance, five of the eight we track are below their end-2017 prices. Wynn is the worst, down -25%.

 

Travel-tech stocks were, as so often, mixed. Even if Trivago was fastest this month, it is half its end-2016 launch price.

 

We cannot find much good news, because as we noted, many of the growths follow earlier falls. Both aircraft-builders are good. We track only two travel agencies, both Germany based, but although TUI is flat over end-2017, Thomas Cook is half its end-2017 price.

 

 

Info from the Travel Business Analyst newsletters. Details in next month’s newsletters.

 

 

The Fox. Remember, I’m an industry expert in the parallel world.

 

*Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance.

 

Trump Slump Bumped – extraordinary changes in US visitor counts that turn a fall into growth.

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Trump Slump Bumped – extraordinary changes in US visitor counts that turn a fall into growth.

The US has produced a new set of figures on visitor arrivals in the US. It reverses the Trump Slump into a Bump. But the new counts do not correct what may have been a fault; they deliberately miscategorise figures, which produces a Trump Bump.

 

We are shocked, but we have seen no other reports that have analysed the changes.

 

Here is the story:

 

Earlier this year, many reports on visitor arrivals in the US were reporting a ‘Trump Slump’ – a fall in visitors prompted by the negative actions and words of the newish US president, Donald Trump. When he was not banning or trying to ban certain types or citizens from visiting the US, his words were unfriendly.

 

Not only did his words ascertain that the US was on its way to becoming great again, but, almost concomitantly, non-Americans (=foreigners) were not so good, at best.

 

In those circumstances, there should have been little surprise that the number of visitors would fall. Even if the banned nationals were tiny suppliers of visitors to the US (we guess some country-markets in the hundreds, and maybe 10,000 over a year), many others would, sensibly, have reconsidered a visit to the US.

 

Would a France national, moslem, born in France of parents from Morocco, continue to assume a visit to the US would be trouble free?

 

But a fall in visitors, of course, even if a likely outcome of specific actions, was not welcomed by the US administration. Its discourse was, and is, that everything is better for everyone in the US, and possibly better than since the beginning of time.

 

This is not to say that we accuse the US government of helping the US administration to falsify facts. But its actions nevertheless raise suspicions.

 

Last April, the US government said it was checking visitor-arrival counts because some visitors may have been miscategorised.

 

The country’s DMO (NTTO, National Travel and Tourism Office) says some arrivals were incorrectly reported as showing US as the country of residence. The passport country for many (NTTO says ‘a large number’, but provides no further definition to enable others to define it thus) of the affected records was Brazil, China, India.

 

This month, NTTO announced that the problem has now been fixed.

 

But, we declare, it has not been corrected.

 

The NTTO says any visitor-arrival that listed the US as the country of residence has now been changed to show the passport country as the country of residence. This is actually changing what may have been a mistake (obviously most arrivals with India passports were/are not residents of the US, even if some were recorded as US residents) to a clear mistake (assuming all those non-US-citizen visitor-arrivals were/are not resident in the US).

 

This exercise has reversed the Trump Slump into a Trump Bump.

 

In general terms, based on our notes above about the unwelcome sentiment in Trump’s US for ‘foreigners’, the visitor-arrival count now seems wrong. That said, we accept that few figures ‘seem’ right all the time; there are always surprises.

 

The NTTO says the change (it says ‘corrective’ but as we have noted, these are not corrections, this is just re-categorisation) means the mistake (if that is what it was) in 2017 affected 3.7mn visitors in 2017 – almost a full Trump Year – yet only 540,000 visitors in non-Trump 2016.

 

The other broad figures (more, with an accompanying table, in a WYSK report, what-you-should-know, from Travel Business Analyst):

-The new figures show there were 38.9mn +2.0% overseas visitors in 2017. The old figures were 35.2mn -6.2%.

-For total visitors (ie including Canada, Mexico), new 76.9mn +0.7%, old 73.3mn -3.1%.

-There were no changes for visitors from Canada, Mexico in 2017, but changes in 2016 and 2015. Although the changes in those earlier years were small, why were those 2017 figures ‘corrected’ before the ‘mistake’ in the categorisation was discovered? Even though the Canada and Mexico visitor-arrival counts are so big (almost 40mn in 2017), no visitor was mis-categorised?

 

 

The Fox. Remember, I’m an industry expert in the parallel world.

*Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance.

UK travel trends; trouble x6

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UK travel trends; trouble x6

I’ve just worked on UK travel data for the first three months of this year. It is trouble x6; falls in every month, both inbound and outbound.

 

Remember, the fall of the UK currency after the Brexit vote in 2016 was expected to boost visitor arrivals, but also prompt a fall in outbound travel.

 

Whoops.

 

Outbound may be matching expectations, falling -5.4% in Q1. But inbound also fell every month in Q1 (January by a painful -15%), and -5.6% for all-Q1.

 

Could the difference be business travel? Commentary (as above) relates the currency fall primarily to leisure travel. Business travel or even others such as sports-, event-, religious-travel are less affected by currency changes.

 

Could it be that business travellers are having fewer reasons to visit the UK until the post-Brexit economic rules are set?

 

The Fox. Remember, I’m an industry expert in the parallel world.

*Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance.

London down, not even out

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London down, not even out

London visitor data (from Visit Britain) is not timely. Figures are surprising nevertheless.

 

In Q4, arrivals fell 8%. Remember that this was not supposed to happen. After the Brexit vote in 2016, the fall of the UK currency was supposed to boost visitor arrivals, although probably also prompt a fall in outbound travel.

 

It hasn’t happened like that. Even before the UK is out of the European Union, the London visitor count is down.

 

Of course a fall can have many causes. But the size of that Q4 fall, -8%, is a surprise – that is 400,000 fewer visitors in that period, say 4000 fewer daily.

 

Then comes #2 shock – Q1 figures show a -10% fall! There are fewer visitors in Q1 than in Q4, but that bigger percentage fall produced a bigger actual fall – around 5000 fewer visitors daily.

 

The Brexit surprises continue.

 

The Fox. Remember, I’m an industry expert in the parallel world.

 

*Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance.

What’s working; what’s not. Airlines in Asia Pacific

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What’s working; what’s not. Airlines in Asia Pacific

Our summary of traffic results for the leading airlines in Asia Pacific, excerpts from the current editions of the Travel Business Analyst newsletter, over January-April.

 

Seat sales at biggest FSAs (full-service-airlines) in Asia Pacific (whole-group results for all), in alphabetical order: Air China +9%; Cathay +2%; China Eastern +10%; China Southern +11%; Japan +3%; Singapore +6%.

 

Notes (on notable details):

 

-Air China. International growing almost double the rate of domestic.

-Cathay. Why is the investment world not shouting out Cathay’s bad results? A China-related airline running +2% is unheard of.

 

The group’s management is living in the past when it ruled Hong Kong’s aviation scene. However, it may get relief when its local rival, Hong Kong Airlines, stumbles. Not only is HKA expanding too fast (a la Norwegian), but it is part of China’s troubled HNA group.

 

 

-China Eastern. Unlike Air China, domestic and international growth are in sync.

 

 

-China Southern. The biggest of China’s top-3, yet fastest-growing also. Its international business is 20% bigger than for the other two.

 

 

-Japan. Domestic is hardly growing but +6% for international is like boom time in the Japan market.

 

 

-Singapore. Before, we worried for SAG (Singapore Airlines group), because the main airline looked weak (notwithstanding still-fawning press coverage). SA is still only +2% but it is being pulled along by SAG’s other airlines. That said, Scoot should be higher than its +12%.

 

Total results were helped by SAG’s Silk +10%. We think Silk should not be folded into SA but reworked as SAG’s low-cost-airline. (See our definitions for full-service-airlines, low-cost-airlines, no-frills-airlines.)

 

 

-Others of note: Some surprising falls on international routes. Garuda. And Malaysia is slipping again after returning to growth in 2017 after its two accidents in 2014 (MH370 disappeared flight, MH17 shot down over Ukraine).

 

And Thai; given that Thailand’s visitor business is doing well, is administrative dysfunction at government affecting Thai’s operational efficiency?

 

 

The Fox. Remember, I’m an industry expert in the parallel world.

*Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance.

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