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  • Sustainability Regulations Reshape Aviation Finance Strategy

    Learn more about EmeraldSky

    Global legislators – particularly those in Europe – are pulling on the levers of government to ensure aviation is subject to increasing regulatory change to reduce carbon emissions and encourage a transition towards operating more sustainably.

    It’s crucial aviation financiers understand the regulations, and their impact, not simply for compliance but to capitalize on emerging opportunities.

    The Sustainability Regulations Landscape

    Since 2013, aviation emissions have increased by 26% and are expected to continue to grow, with passenger numbers projected to double to 8.2 billion in 2037.

    By 2050, aviation could consume a quarter of the global carbon budget for limiting global temperature rise to 1.5oC.

    EU Member States aim to reduce net emissions by at least 55% by 2030 compared to 1990 and will become carbon emissions neutral by 2050.

    Against this backdrop, key regulatory frameworks have been implemented to reduce greenhouse gas emissions and mitigate the environmental impact of air travel.  These include the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA)and the European Union Emissions Trading System (EU ETS) among others. Additionally, countries including the UK and US have introduced national initiatives to reduce aviation emissions including the UK’s Jet Zero Strategy and the US’s Sustainable Aviation Fuel (SAF) Grand Challenge.

    Aviation sustainability-regulations

    With CORSIA aiming to create a globally unified approach to offsetting aviation emissions and flight emissions within the EU also being regulated by the EU ETS European carriers are facing a unique challenge.

    Adopted by the International Civil Aviation Organization (ICAO), CORSIA was developed and set the baseline levels for emissions exceeding 85% of 2020 levels. Its implementation aims to help the aviation industry reach its aspirational goal to make international flight growth carbon neutral and for airlines to have net zero carbon emissions by 2050. The mandatory phase of CORSIA is set to begin in 2027, with individual airlines accountable for their emissions by 2030.

    The EU Emissions Trading System (EU ETS) requires airlines operating in the European Economic Area to monitor, report, and verify their emissions and to surrender allowances equal to their emissions annually. This means from 2026, airlines will face the full cost of emitting carbon, as free allowances taper down to zero on intra-EU flights where the cap has been steadily above 80% since 2012.

    American multinational investment bank, Morgan Stanley, has predicted this could lead to substantial rise in carbon costs which will be passed on via higher ticket prices.

    Additionally, under the Refuel EU legislation, tankering must be reduced so 90% of annual fuel comes from an EU airport ensuring airlines are not using cheaper fuel outside the EU. From 2025, aviation fuel suppliers will also have to blend 2% SAF and kerosene, increasing to 70% by 2050.

    Regulation Implications for Aviation Finance

    Regulations such as these present both challenges and opportunities for financiers but what is clear is the continually changing regulatory landscape has financial impact. Airlines face higher operating costs due to the need to purchase carbon credits or emissions allowances whilst embracing new and emerging technologies. 

    With any financial health impact there also comes a threat to the ability to meet lease or loan obligations and aircraft leasing and finance agreements now need to consider potential financial impacts of compliance with CORSIA, EU ETS and other regulations.

    Financiers must factor these costs in when structuring finance agreements and deals or when assessing airline creditworthiness.  The costs also need to be accounted for when considering potential impact on aircraft valuation and lease terms because of the growing demand for aircraft capable of using SAFs, which can reduce lifecycle emissions significantly.

    sustainability-regulations2

    As a result, we are seeing investments in SAF infrastructure and technology development becoming increasingly attractive and while funding SAF projects and the transition of fleets to SAF-compatible models can be a significant investment opportunity, financing structures may need to adapt to support such initiatives.

    The UK government’s strategy focused on advancements in technology, operations, and SAFs to achieve net-zero aviation by 2050 and the US Sustainable Aviation Fuel (SAF) Grand Challenge encourages financiers to consider funding opportunities for aligned innovations and those that could benefit from government incentives.

    Financiers are also encouraged to consider certification status when evaluating SAF-related investments. The International Sustainability and Carbon Certification (ISCC), acertification system for the sustainability of raw materials and products, can also enhance the credibility and marketability of SAF projects, influencing investment decisions.

    Diversification and Funding

    More broadly speaking, portfolio diversification to include more sustainable assets that can reduce exposure to regulatory risks is increasingly important.

    Aircraft may require upgrades to meet new standards, impacting financing deals and residual value calculations. Aircraft residual value could also be influenced by environmental performance with older, less efficient aircraft potentially facing a decline in value, while newer, more sustainable models command a premium.

    There is also a rise in Sustainability-Linked Loans and Green Bonds. The loans offer favorable terms for borrowers meeting specific sustainability targets, such as reducing emissions or increasing the use of SAFs and the issuance of green bonds dedicated to financing sustainable projects in aviation is growing. These bonds attract investors focused on ESG criteria.

    These financial instruments not only support environmental goals but also attract investors focused on sustainable portfolios.

    Strategic Responses

    Aviation finance professionals must adopt strategic responses to navigate regulations effectively. This includes incorporating ESG Criteria into investment decisions including evaluating the environmental impact of aircraft and operations and ensuring transparency in reporting.

    Collaboration with airlines, manufacturers, and regulators is key to stay ahead of regulatory developments – through engagement in industry forums and working groups providing valuable insights and influencing policy-making.

    Financiers must develop and promote financing products that support the transition to sustainable aviation which could include green leasing options, financing for SAF projects, and investments in carbon offset programs.

    Focus should also turn to incorporating sustainability risks into broader risk management frameworks including assessing the potential financial impact of regulatory changes and the transition to low-carbon aviation.

    Moving forward, financing agreement clauses should also account for future regulatory changes and their potential impact on asset values and operating costs.

    EmeraldSky

    As sustainability regulations continue to evolve, the sector must remain agile and proactive which is where EmeraldSky by Cirium comes in.

    EmeraldSky represents a ground-breaking integration of data, analytics, and innovative methodology, delivering unparalleled precision in measuring aircraft and flight CO2 emissions.

    This is why Cirium’s EmeraldSky will be crucial in providing industry-leading data to enable airlines to make data-based decisions to ensure flights operate with optimal efficiency and reduce emissions where possible.

    It offers a precise and comprehensive perspective on aircraft and flight CO2 emissions as well as fuel consumption for every flight and aircraft. It takes in account every essential factor, such as aircraft model, engine type, age, flight duration, passenger count, and even cargo capacity, to ensure a highly accurate and comprehensive emissions assessment.

    Harnessing EmeraldSky, means businesses can secure a competitive advantage and contribute to a greener and cleaner future for their own operations and the industry as a whole.

    To learn more about this innovative game-changing methodology, visit Cirium.com/EmeraldSky.

    Looking Ahead

    Sustainability regulations are reshaping the aviation landscape and the shift towards greener aviation poses inevitable challenges and opportunities for aviation finance professionals.

    We will see the sector accelerate towards achieving net zero emissions by 2050 and by understanding the regulations and their implications, financiers can not only ensure compliance but strategically position themselves to support and benefit from the industry’s transition to a more sustainable future.

    The connection between sustainability regulations and aviation finance is becoming increasingly complex and critical but provides an opportunity for the aviation finance community to contribute significantly to the global efforts to combat climate change, while unlocking new opportunities for growth and innovation.

    Staying informed and adaptable is crucial to navigating the current regulatory landscape, ensuring that both compliance and competitiveness are achieved as the sector journeys towards a more sustainable future.

    Attending ISTAT EMEA in Istanbul? Book a meeting with our team to discover how Cirium enables data-based decision-making with reliable and comprehensive environmental flight intelligence. 

  • How Twin-Aisles Came to the Fore at Quiet Farnborough

    Cirium Ascend Consultancy is trusted by clients across the aviation industry to provide accurate, timely, and insightful aircraft appraisals. The team provides the valuations and analysis the industry relies on to understand the market outlook, evaluate risks and identify opportunities.

    Discover the team’s industry reports & market commentaries. Read their latest expert analysis, viewpoints and updates on Thought Cloud.

    Max Kingsley-Jones, Head of Advisory, Cirium Ascend Consultancy

    A total of 260 new orders and order commitments were disclosed during the Farnborough air-show week in late July.  Although this was the lowest volume of show announcements for many a year Cirium Ascend estimates that the combined value of all the new deals is worth close to $26 billion (in Base Full-Life Value terms).

    The vast majority of the show announcements – 245 – were for the “big two”, with the remaining 15 being for regional turboprops (ATR and De Havilland Aircraft). Two-thirds (164) of the mainline aircraft orders and commitments were on the Airbus books.

    Cirium fleets data shows that there was a relatively high volume of widebody announcements during the week, with total orders and commitments for twin-aisles (including freighters) edging single-aisles,126 to 119. Total twin-aisle orders and commitments were worth $18.8 billion, versus $7 billion for the single-aisles.

    Farnborough Airbus/Boeing Announcements by Aircraft Category & Value

    bar chart: Farnborough Airbus/Boeing announcements by aircraft category & value

    Source: Cirium Fleets Analyzer, *Includes factory freighter. Data includes firm orders and commitments to order

    The emphasis this year on the twin-aisle market is unsurprising, given the excessively long lead times that now exist across the single-aisle production lines. The industry has been relatively under ordered on twin-aisles post Covid, but backlogs are now beginning to extend out towards the end of the decade.

    Together, Airbus and Boeing disclosed 91 new firm orders along with 154 commitments to order.

    Boeing closed on its rival in value terms (44%) thanks its relatively high proportion of twin-aisle/freighter announcements.

    The biggest show announcement in terms of total units came from Saudi low-cost operator Flynas, which disclosed commitments for 90 aircraft – 75 A320neo family aircraft and 15 A330-900s. There was a noticeable absence of the usual raft of Middle East show announcements – although Qatar Airways disclosed a pre-existing order for 20 777-9s placed back in March. Emirates was the only other announcement from the region, placing a new firm order for five 777F factory freighters.

    However, Asia-Pacific operators compensated, with their combined announcements for 106 aircraft from four operators accounting for 43% of show deals by unit. These included JAL (11 A321neos, 20 A350s and 10 787s), Korean Air (20 777-9s and 20 787s), VietJet Air (20 A330-900s) and Drukair (five A320neo family).

    Farnborough Airbus/Boeing Announcements by Region & Aircraft Category

    bar chart-Farnborough Airbus/Boeing category17

    Source: Cirium Fleets Analyzer, *Includes factory freighter. Data includes firm orders and commitments to order

    Other world regions were less represented, with Virgin Atlantic’s order for seven A330-900s being one of just two European announcements, Luxair being the other with two 737-10 Max orders. Just one US customer deal was announced – a commitment for four 777Fs from Miami-based National Airlines. Abra Group – parent of Gol and Avianca – was the sole Latin American announcement: a commitment for five A350s. In Africa, Berniq Airways of Libya placed orders for six A320neo family.

    There was none of traditional flurry of leasing company announcements at this year’s show, with only Macquarie AirFinance announcing an order (20 737-8 Max).

    Embraer was absent in terms of commercial order show announcements but was well represented in the aircraft display with its E-Jet E1 converted freighter, E2 passenger variant and C-390 airlifter present and did receive orders from the Netherlands and Austria for the latter. CEO of the Brazilian OEM’s commercial arm, Arjan Meijer, stated during the show that despite the radio silence, various deals for at least 300 aircraft are currently under negotiation.

    learn more about Cirium Ascend Fleets Analyzer.

  • Finnair’s Inspiring Turnaround

    Mike Malik, Chief Industry Officer, Cirium

    On July 21st, at the prestigious Airline Strategy Awards in London, I had the privilege of meeting Mr. Ole Orver, the Chief Commercial Officer of Finnair. Mr. Orver was there to accept the 2024 Executive Leadership Award for the European region on behalf of the Finnair team. Inspired by this encounter, I want to share insights into Finnair’s journey and transformation over the past few years.

    Like all airlines, Finnair was hit hard by Covid-19. It was unique, however, in getting hit with a second major blow just as Covid was starting to fade. In 2022, the Russia-Ukraine war meant Finnair could no longer fly through Russia’s airspace, disrupting its routes to Asia. It wasn’t the only airline affected. But for Finnair, Asia was critical. Its Asian network was a powerful competitive advantage and the key driver of its profitability. Suddenly, flights took a lot longer to get from Finnair’s Helsinki hub to cities like Tokyo, Hong Kong, and Singapore.

    Mike Malik, Chief Marketing Officer of Cirium and Ole Orver, the Chief Commercial Officer of Finnair

    Remarkably, Finnair found a way out of its dilemma. Last year, it earned a EUR 254 million net profit, a nice way to celebrate its 100th anniversary! In fact, the company achieved its target of a 5% operating margin approximately 12 months ahead of schedule.

    Finnair’s turnaround story started with a new business plan announced in the fall of 2022, a few months after the Russian airspace closure. It said at the time, “We now must compete without geographical advantage.” Before, flying through Helsinki was a convenient shortcut for many journeys between Europe and Asia. Now it had to compete in markets where it had less of a competitive advantage.

    It reacted by cutting costs, leasing out some of its excess planes, enhancing its digital services, increasing ancillary sales, investing in new product upgrades, and working with its oneworld alliance partners. With Qatar Airways, it formed a joint venture, in which the Gulf carrier agreed to purchase passenger seats and cargo space on new routes between Doha and Scandinavia. Finnair added new flying to India as well.

    The momentum continues. Finnair reported a EUR 18 million net profit for the April-to-June period of 2024. It said furthermore that it will generate another operating profit for the full year.  

    The airline is now led by a new CEO, Turkka Kuusisto. He’ll look to maintain the success of Finnair’s turnaround, in the face of many intense challenges.

    These include cost inflation, high interest rates, geopolitical tensions, slowing demand, and tough competition. In addition, Russia’s airspace remains closed and some markets like China are still far from recovered.

    Finnair is still significantly smaller than it was before Covid. As Cirium’s Diio airline planning system shows, the airline is flying 14% fewer seats in this year’s July-to-September quarter than it was five years earlier. One reason for this is that Russia used to be one of its largest markets.

    Finnair in 2019 flew to five Russian cities (Moscow, St. Petersburg, Kazan, Samara, and Yekaterinburg). It no longer flies to any of these.

    Between Helsinki and Asia, meanwhile, seat capacity is down by 46% from 2019. The decline is 90% for China, where it now serves only Shanghai. It previously flew to Beijing, Guangzhou, Xian, Chongqing, and Nanjing.

    Finnair shifted some of its widebody flying to North America, where it’s still smaller that it was pre-Covid but only by 3%. It even added new routes like Dallas-Fort Worth and Seattle, to go along with New York JFK, Los Angeles, and Chicago. On the other hand, it hasn’t reentered San Francisco.

    Cirium Diio can also identify Finnair’s largest markets in Europe outside of Finland. Number one, measured by total seat capacity, is Germany. That’s followed by Sweden, the U.K., Italy, Denmark, Norway, and Poland. Japan and China ranked in the top five before Covid, with Russia not far behind.  

    Finnair’s transformation since the twin crises of COVID-19 and the closure of Russian airspace is nothing short of exceptional.

    Their resilience is a testament to outstanding leadership and a dedicated team. It’s a turnaround story that both Mr. Orver and the entire Finnair team can rightfully take immense pride in.

  • Carbon Emissions Rules Reshape Managed Business Travel

    JIm Hetzel Director of Product Marketing
    JIm Hetzel Director of Product Marketing

    Jim Hetzel, Director of Product Marketing, Cirium

    Carbon emissions reporting is becoming increasingly vital for corporate responsibility, especially for companies with managed business travel. In this era of growing environmental consciousness, understanding the impact of global regulations on carbon emissions has become crucial. Let’s dive into how these regulations can influence businesses and the benefits they bring.

    Carbon Emissions Reporting involves quantifying an organization’s greenhouse gas emissions into three scopes:

    Scope 1: Direct emissions from owned or controlled sources.
    Scope 2: Indirect emissions from purchased energy generation.
    Scope 3: Other indirect emissions, including business travel.

    Increasing Global Regulations

    Regulatory bodies worldwide are introducing strict rules on carbon emissions reporting to hold companies accountable for their environmental impact.

    European Union’s Corporate Sustainability Reporting Directive (CSRD):
    Mandates large companies in the EU to regularly publish reports on their environmental impact, including climate impact from business travel.

    California’s Climate Corporate Leadership and Accountability Act (SB 253) and Climate-Related Financial Risk Act (SB 261):
    Requires companies to disclose their entire scope of emissions, including those from operations and supply chains, as well as financial institutions’ portfolios.

    Traveler at sunset on a hill over a beach

    Benefits of Compliance

    1. Compliance with Regulations: By understanding and adhering to carbon emissions regulations, companies can avoid penalties and legal risks associated with non-compliance.
    2. Optimizing Carbon Offset Efforts: Knowledge of emission reporting allows businesses to identify areas where they can reduce their carbon footprint effectively.
    3. Cost Reduction: By optimizing carbon offset efforts, companies can minimize costs associated with emission reduction strategies.
    4. Enhancing Brand Image: Demonstrating commitment to environmental sustainability through accurate reporting helps improve a company’s brand image among consumers who prioritize eco-consciousness.
    5. Attracting Investors: Companies that actively manage their carbon emissions are more appealing to the investment community as sustainable practices align with long-term financial stability.

    Cirium’s groundbreaking work in accurately measuring aircraft and flight emissions plays a vital role in the pursuit of sustainable practices and responsible corporate behavior, ultimately helping businesses align their operations with global ESG objectives.

    Case Study Example – RELX’s Flights Dashboard

    RELX, a global information and analytics company, is using innovative solutions to measure and track flight emissions:

    • The flights dashboard, powered by Cirium’s aviation analytics, provides accurate fuel burn figures.
    • This data allows RELX to make informed decisions to reduce emissions, choose lower-emission airlines/routes, and set carbon reduction targets.

    Changing Travel Behaviors at RELX

    The introduction of the Flights Dashboard has triggered positive changes at RELX:

    • Considering financial and carbon costs for in-person meetings and finding a balance.
    • Measuring the impact of travel year-on-year and setting reduction targets.
    • Introducing an internal carbon price as an incentive to reduce unnecessary travel and support environmental projects.

    By actively managing their carbon emissions, organizations can contribute to a sustainable future while enjoying the benefits of compliance. So, let’s embrace these changes and create a greener tomorrow together!

    Learn more about building sustainable travel programs.

  • A380 Incident Highlights Risks to Aircraft Visiting Russia

    Andrew Doyle
    Andrew Doyle

    Andrew Doyle, Senior Director – Market Development, Cirium

    The potential operational and financial risks associated with flying aircraft into a heavily sanctioned country such as Russia were drawn into focus in late March when a water truck damaged the aft lower fuselage of a parked Airbus A380 at Moscow’s Domodedovo Airport.

    Luckily, this Emirates aircraft could be safely ferried back to its Dubai base four days later for repairs and was returned to revenue service two days after that.

    However, this raised the question: how many foreign-registered – and indeed lessor-managed – aircraft are at potential risk of being stranded in sanctioned countries (or those on the US Office of Foreign Assets Control list), were they to sustain damage that could not easily be repaired in situ?

    To find the answer I used Cirium tracked utilisation data together with our recently launched Asset Watch tool to identify foreign-operated and lessor-managed Airbus and Boeing widebodies which had visited Russian airports during the month of May, and how long they had spent on the ground there.

    Altogether, 155 western-built passenger and cargo widebodies were flown into Russia during May by Central and East Asian, Middle Eastern and African airlines, logging a total of 963 visits and 2,940 hours of ground time.

    Cirium fleet data showed that 55 of these widebodies were under management by 18 different lessors, accounting for 264 of the flights and 982 hours of ground time. Historical data suggests that statistically on an annual basis between two and three foreign-operated widebodies could be expected to sustain some level of damage while on the ground in Russia (assuming one incident per roughly 5,000 arrivals).

    My first chart is a ‘tree map’ that breaks down the 155 aircraft cited above by master series, and ranks them by total hours of ground time spent at Russian airports during May, as well as listing the associated number of operators, lessors, flights and ground hours:

    155 aircraft cited above by master series, and ranks them by total hours of ground time spent at Russian airports

    My second chart focuses on the subset of 55 tails under lease management, and shows how many times each visited a Russian airport during the month, and how much time that specific aircraft spent on the ground:

    subset of 55 tails under lease management

    The full data set showing individual aircraft information including manager and flight-by-flight ground stays for all commercial aircraft worldwide can be accessed via Asset Watch.

    LEARN MORE ABOUT ASSET WATCH WITH CIRIUM’S PRODUCT DEMONSTRATION. WATCH ON DEMAND.

  • Japan’s Airport Fuel Shortage – an Inbound Travel Problem?

    Cirium Ascend Consultancy is trusted by clients across the aviation industry to provide accurate, timely, and insightful aircraft appraisals. The team provides the valuations and analysis the industry relies on to understand the market outlook, evaluate risks and identify opportunities.

    Discover the team’s industry reports & market commentaries. Read their latest expert analysis, viewpoints and updates on Thought Cloud.

    Joanna Lu
    Joanna Lu

    Joanna Lu, Head of Consultancy Asia, Cirium Ascend Consultancy

    Japan, celebrated for its rich cultural heritage, technological innovation, and scenic beauty, has consistently attracted significant international tourism. There have recently been reports of critical fuel supply issues at regional and major airports like Narita, typically attributed to an influx of inbound travel. However, closer examination indicates that these challenges stem more from supply chain disruptions and labour shortages exacerbated by Japan’s aging population and stringent immigration policies, than from the increase in travel alone.

    The Japan National Tourism Organization (JNTO) reports a significant increase in tourists from South Korea, Taiwan, and other Asian countries. However, with a lag in outbound tourism from China to Japan, it is essential to examine evolving travel patterns and identify the current top destination markets for Japan. This analysis focuses on Japan’s international travel landscape, specifically seat capacity scheduled on key routes over the next two months and compares these trends with pre-pandemic levels.

    Utilizing Cirium’s schedule data, we observe shifts in airline capacity dynamics in the post-pandemic era. The Chinese market remains a significant gap for Japan, with a 6% decrease in seat capacity in Q3 compared to 2019. However, South Korea has become Japan’s largest international destination market, showing a 10% increase in seat capacity compared to Q3 2019.

    Additionally, Japan sees new market opportunities with Australia and Vietnam, projecting 29% and 9% growth in Q3 2024 versus 2019 levels, respectively.

    When examining the city level, significant variations across different routes indicate shifts in demand patterns.

    Strong Recovery in Key Markets

    The almost 20% increase in departing seats in July and August to Seoul underscores robust recovery, driven by cultural ties and expanded business engagements between Japan and South Korea. Increased diplomatic efforts and eased travel restrictions have also contributed to this surge. Currently, travel between Korea and Japan is quite accessible, with both countries having resumed visa-free travel for short-term visits. South Korean and Japanese citizens can travel between the two countries without a visa for stays up to 90 days for tourism or business purposes.

    Resilience in Business and Tourism Hubs

    Taipei has seen seats increase by 8% in July and 4% in August, signalling a resurgence in business travel and tourism, buoyed by the reopening of international conferences and exhibitions and robust tech industry collaborations between Japan and Taiwan. Shanghai’s seats are up by 2% in both July and August. Bangkok sees an increase in August, reaching pre-Covid levels, although seats are still down by 27% in July. Singapore’s seat capacity is up by 4% in both July and August, reflecting its resilience in facilitating regional travel, supported by robust air connectivity and strategic business ties with Japan. The city-state’s efficient handling of pandemic challenges has reinforced its appeal as a gateway for travellers to and from Japan. The Hong Kong market hasn’t fully recovered, being roughly 14% down in seat capacity mainly due to aircraft supply shortages at Cathay Pacific.

    Challenges in Traditional Outbound Markets

    However, traditional outbound markets such as Busan, Manila, and Honolulu have seen declines in departing seats compared to 2019 due to reduced Japanese outbound travel. Busan faces reduced demand amid competition from Seoul’s expanded connectivity, while Manila and Honolulu contend with decreased tourist spending power amidst economic uncertainties.


    Addressing the fuel supply shortage issue, this is likely driven by supply-side constraints rather than demand-side factors.

    Overall international seat capacity out of Japan in Q3 remains around 7% lower than 2019 levels, with domestic seat capacity down by 2%.

    While the total seat capacity out of Japan (both international and domestic) in Q3 2024 is 6% higher than the same time last year, there is insufficient evidence to attribute the current shortage to surging inbound travel demand.

    Jet fuel, a product of crude oil refining, presently sees declining production due to decreased demand for gasoline and other petroleum products amid energy-saving measures and decarbonization efforts in Japan. Japanese oil wholesalers are consolidating and reducing the number of refineries, with only 20 active refineries as of June 2024 compared to 49 in 1983. Consequently, fuel must travel further to reach airports, compounded by labour shortages impacting both maritime and land transportation operators. Technical issues at Japan’s largest refiner, ENEOS’s Kashima refinery, further exacerbate the situation.

    Fuel shortages are already causing problems at airports across Japan, particularly regional ones. Cirium schedule data by airport reveals significant variations in flight number growth across regional airports, explaining the severity of issues at certain locations. Cirium Ascend Consultancy will continue to monitor the situation but believes the primary driver of the crisis is not the rapid recovery of travel to Japan.

    Japan’s travel industry faces a complex landscape of recovery, resilience, and challenges. Addressing these issues will require strategic planning and collaboration across various sectors to ensure sustainable growth and stability in the face of evolving travel dynamics and supply chain constraints.

  • ​Air France Warns of Up to €180 Million Revenue Hit From Olympics

    This brief was originally published in Cirium Dashboard. Cirium Dashboard features analysis, insights together with schedules, fleets, traffic and financial data, premium reports and in-depth industry ​news.

    Air France is warning that it expects to take a €160-180 million ($172-194 million) hit to revenues during its peak summer period as a result of the impact of the Olympic games.

    In a market update, the French carrier and its low-cost subsidiary Transavia warn that they “are currently experiencing pressure” on unit revenues as tourists look to avoid Paris this summer and locals push back their holidays until after the upcoming games.

    Bookings to and from the French capital, which will host the international sporting event between 26 July to 11 August, are “lagging behind other major European cities”, says Air France in a market update.

    Travel from the city to other destinations is also lower than usual, which the company attributes to French residents “postponing their holidays until after the Olympic games or considering alternative travel plans.”

    Air France has not provided guidance on the games’ impact on its overall capacity.

    Travel to and from France is expected to normalise after the Olympic games, with encouraging demand levels projected for the end of August and the month of September.

    Air France notes that the Paris tourism board has seen a similar dynamic play out for hotel bookings in the city.

    LEARN MORE ABOUT Cirium Dashboard

  • Cirium Ascend Base Value Updates July 2024

    Cirium Ascend Consultancy is trusted by clients across the aviation industry to provide accurate, timely, and insightful aircraft appraisals. The team provides the valuations and analysis the industry relies on to understand the market outlook, evaluate risks and identify opportunities.

    Discover the team’s industry reports & market commentaries. Read their latest expert analysis, viewpoints and updates on Thought Cloud.

    George-Dimitroff
    George-Dimitroff

    George Dimitroff, Head of Valuations, Cirium Ascend Consultancy

    Cirium Ascend released updated Base Value (BV) forecasts on 1 July 2024. They went live in Cirium’s Values Analyzer platform shortly after midnight BST (GMT +1). Some of the key themes in the latest revisions include:

    1. The BV floor is getting higher

      Engine values have been increasing more rapidly than aircraft values and the portion of an aircraft’s value that is attributable to its engines has been increasing steadily over the last few decades. Higher engine values mean higher part-out values toward the end of an aircraft’s life, which means that the floor at which BVs level off (which itself is not a horizontal line) is now higher than it used to be. This has been observed most recently with older generation aircraft but is also expected to apply in the future with new generation aircraft.

      Our single-aisle aircraft BVs have been relatively stable since 2014, with limited (if any) impairments during Covid.

      “However, it is becoming increasingly evident that older aircraft are “cashing out” at retirement, generating proceeds higher than historical trends suggest.”

      This is not just because of the current heated market environment.

      Our new BV curves for single-aisles are shallower to reflect this fact. They take engine values into account alongside other factors. However, the BV does not necessarily equal the Part-Out Value, even if it may be guided by it.

      Current BVs are broadly unchanged for most younger types but increase with age – be it the current BV of an older aircraft, or the future BV of any aircraft, young or old. Due to the compounding nature of increases, projections further into the future will see greater increases in Half Life values.

    2. Engine green time does not depreciate as fast as previously projected

      A thorough analysis of the change of engine overhaul and LLP stack value over time indicates that engine value green time is depreciating less rapidly than projected previously. We specifically focussed our analysis on how this “green time” depreciates in Phase 2 (out-of-production) and Phase 3 (retirement) of an engine’s life, and while some worse performing engines did have significant double digit percentage drops in certain periods of time, the longer-term trend has been one of more gradual decline.

      We have taken these findings into account to modify some (but not all) of the depreciation rates of engine green time, and in most cases the decline is now less steep.

      Please note that the three-phase methodology for treating engine green time value that was introduced in November 2023 remains in place and we have simply modified some of the parameters within that logic to reflect our new expectations for the future.

    3. Current production delays push some inflection points further into the future

      The ongoing supply chain issues and constrained production rates at all OEMs mean that there will be fewer new deliveries in the coming years than previously expected, and consequently fewer aircraft will be retired in the next few years than projected in the 2023 Cirium Fleet Forecast.  Consequently, the engine programmes powering newer generation aircraft will likely have longer production runs, and thus take longer to enter Phase 2 or 3 of their lives, than previously projected.

      Another factor that contributes to later entry into Phase 2 or 3 for engines is that OEMs have now made it clear that some (but not all) of the technological improvements that they are developing currently and in the next few years are expected to be fully retrofittable to in-service engines at their next shop visit, which means that older engines could be upgraded to the latest production standard.

      Therefore, such engines are now not expected to see their values decline prematurely due to replacement by a more efficient version of the same engine.

      Consequently, inflection points for such engines are moving further out into the future than previously expected.

    4. New years of build see annual BV growth above the long-term trend for longer

      In late 2022 we implemented a change to our new aircraft BVs for what was then the next three years of production (up until 2025), so that those years of build showed slower-than-usual declines in new pricing in real terms (or faster increase in absolute terms) than the historical long-term trend suggested. The current supply shortages, full orderbooks, high escalation rates and our projection that the single-aisle market will not return to a supply / demand balance until at least 2028, result in an extension of this “holiday” period by another 3 years (until 2028). Build years from 2029 onwards return to the long-term new value trend, and we will continue to monitor and review them in light of how OEM new pricing and the supply / demand balance evolve over the next few years.

      The net impact of these changes, each of which in themselves can be relatively small, potentially compound to lead to more substantial increases to some BVs, especially for mid-life and older aircraft, or forecasts further out into the future, especially on a Full-Life basis.  Ultimately, our aim is to continue to refine our forecasts to be able to provide expectations of residual value that are as realistic as possible within the dynamic and rapidly evolving industry landscape. We will be publishing a more detailed Inside Track on Values newsletter in the coming week fully detailing the BV changes type by type, which will be available as usual in the publications section of Values Analyzer.

    Learn more about Cirium Values Analyzer.

  • AAM Snapshot July 2024

    Cirium Ascend Consultancy is trusted by clients across the aviation industry to provide accurate, timely, and insightful aircraft appraisals. The team provides the valuations and analysis the industry relies on to understand the market outlook, evaluate risks and identify opportunities.

    Discover the team’s industry reports & market commentaries. Read their latest expert analysis, viewpoints and updates on Thought Cloud.

    YIRU ZHANG
    Yuri Zhang

    Yiru Zhang, Senior Valuation Analyst, Cirium Ascend Consultancy

    At the mid-point of the year, the Cirium Ascend team has noticed that the advanced air mobility (AAM) sector is getting more and more attention. This is reflected in the number of commitments and orders recorded in Cirium’s database, which has increased to over 14,500 as of 24 June 2024, with over 1,000 new commitments and orders since our last update in April 2024. Data coverage includes:

    MARKET GROUPINGMANUFACTURERTYPECOMMENT
    Regional Electric – SmallAura AeroERA
    Regional Electric – SmallHeart AerospaceES-19Programme cancelled, and revised to ES-30
    Regional Electric – SmallHeart AerospaceES-30
    Regional Electric – SmallLYTE AviationLA-44 Skybus
    Regional Electric – SmallMaeve AerospaceMaeve 01Programme cancelled, OEM revised to M80
    Regional Electric – SmallJektaPHA-ZE 100
    eVTOL – Urban Air MobilityAerofugiaAE200
    eVTOL – Urban Air MobilityDufour AerospaceAero3
    eVTOL – Urban Air MobilityBETA TechnologiesALIA-250
    eVTOL – Urban Air MobilityManta AircraftANN2
    eVTOL – Urban Air MobilityAscendance Flight TechnologiesAtea
    eVTOL – Urban Air MobilityOverair IncButterfly
    eVTOL – Urban Air MobilityHorizon AircraftCavorite X7Newly added
    eVTOL – Urban Air MobilityPlanaCopterPlane CP-01
    eVTOL – Urban Air MobilityWisk Aero LLCCora
    eVTOL – Urban Air MobilityTCab TechE20 eVTOL
    eVTOL – Urban Air MobilityEHangEH216
    eVTOL – Urban Air MobilityEve Air MobilityEve
    eVTOL – Urban Air MobilityCrisalion MobilityIntegrityNewly added
    eVTOL – Urban Air MobilityJaunt Air MobilityJourney
    eVTOL – Urban Air MobilityLilium GmbHLilium Jet
    eVTOL – Urban Air MobilityArcher AviationMidnight
    eVTOL – Urban Air MobilityOdys AviationOdys eVTOL
    eVTOL – Urban Air MobilityAutoFlightProsperity 1
    eVTOL – Urban Air MobilityJoby AviationS4
    eVTOL – Urban Air MobilitySkyDriveSD-05
    eVTOL – Urban Air MobilitySirius AviationSirius Jet
    eVTOL – Urban Air MobilityXTI Aircraft CompanyTriFan 600
    eVTOL – Urban Air MobilityAMSL AeroVertiiaNewly added
    eVTOL – Urban Air MobilityVolocopter GmbHVoloCity
    eVTOL – Urban Air MobilityVolocopter GmbHVoloConnect
    eVTOL – Urban Air MobilityEHangVT-30
    eVTOL – Urban Air MobilityVertical Aerospace Group LtdVX4
    eVTOL – UAV/UASBETA TechnologiesALIA-250c
    Business Electric – Single EngineVoltAeroCassio 330
    Business Electric – Single EngineBETA TechnologiesCX300
    Business Electric – Multi EngineEviationAlice
    Business Electric – Multi EngineBye AerospaceeFlyer 800
    Business Electric – Multi EngineElectraElectra eSTOL
    Business Electric – Multi EngineElectronElectron 5
    Business Electric – Multi EngineAirflowM200

    eVTOLs – Urban Air Mobility (UAM)

    The eVTOL – UAM sector has generated the most activity in the market both in terms of the number of aircraft in development, and commitments received to date. Since the last update in April 2024, the sector has attracted 640 new order commitments. The space now has a total of slightly under 11,000 order commitments captured by Cirium Fleets Analyzer. Eve Air Mobility and Vertical Aerospace continue to lead the sector with 2,900 and 1,553 commitments respectively.

    Source: Cirium Fleets Analyzer, as of 24 June 2024

    At the same time, the first certificated type – EHang – has made it to third place with 500 new commitments (including 50 on orders and 450 on options) from Xishan Tourism gained in May 2024. After the newly placed commitments, Xishan Tourism is now EHang’s largest customer and also its second buyer from China. The EHang EH216 orderbook is still concentrated in Asia, with the above mentioned China’s Xishan Tourism ordering 500 units, Indonesia’s Prestige Aviation at 101, United Arab Emirates’ Wings Logistics Hub at 100, China’s Shenzhen Boling Holding Group at 95 units, Malaysia’s Aerotree Flight Services Sdn Bhd at 61 units and Japan’s AirX Inc at 50 units.

    The global market for eVTOLs shows a varied regional distribution, with strong presence in North America (3,390), Asia-Pacific (3,185) and Europe (1,705), driven by differing levels of technological advancement, regulatory backing and investment interest.

    Source: Cirium Fleets Analyzer, as of 24 June 2024

    By looking at the chart below, North America has been accumulating a large number of orders at an early stage and has continued to lead since. As of 24 June 2024, North America is still leading at over 3,350 orders, driven predominantly by the USA (over 3,200). Asia-Pacific followed with rapid and sustained growth to nearly 3,200 orders, where India (900), China (501), Japan (402), South Korea (220) and Vietnam (200) were the top contributors. Europe’s total orders stood at slightly above 1,700, with Ireland now at 755, becoming the largest share and exceeding that for the UK at 473. Latin America and the Middle East followed, showing substantial orders of 550 and 355 respectively. In Latin America, Brazil dominates with 530 orders. In the Middle East, the known only contributors are UAE and Saudi Arabia with 245 and 110 orders separately.

    North America has been accumulating a large number of orders at an early stage and has continued to lead since.

    Source: Cirium Fleets Analyzer, as of 24 June 2024

    The sector has drawn significant private investments and has also received support from various countries and regions. The research and development of AAM is also part of the technological competition between different countries. In the USA, NASA’s Advanced Air Mobility (AAM) National Campaign and the FAA’s UAM (Urban Air Mobility) Concept of Operations aim to integrate eVTOLs into the national airspace, which involve substantial government investment and collaboration with private industry to develop safe and efficient eVTOL operations. The UK government launched the Future Flight Challenge, a £300 million ($380 million) programme that includes significant investment in eVTOL technologies to revolutionise air transport. The Chinese government is heavily investing in smart city projects, from which EHang received strong support. There are also Germany’s BMVI funding programme, Japan’s Public-Private Conference for Future Air Mobility Revolution, Dubai’s Roads and Transport Authority (RTA) partnership with Volocopter, and South Korea’s K-UAM (Korea Urban Air Mobility) Roadmap, etc.

    All of the above-mentioned programmes and support indicate that the AAM sector will experience rapid growth in the next decade.

    Business Electric – Multi-Engine

    In the business electric sector, Electra’s eSTOL has received almost 1,350 order commitments, including from notable clients like the helicopter lessor Bristow Group. However, the identities of the majority of these order commitments remain undisclosed. Heart Aerospace’s ES-30 follows with over 750 order commitments after the ES-19 programme was cancelled and switched to the ES-30. Aura Aero’s ERA holds third place with nearly 500 order commitments.

    Business electric – multi-engine

    Source: Cirium Fleets Analyzer, as of 24 June 2024

    Learn more about Cirium Fleets Analyzer.

    Sara Dhariwal

    Lead Appraiser – Helicopters & AAM

    Ascend analyst Tim Chun Hing Li
    Ascend analyst Tim Chun Hing Li

    Tim Chun-hing Li

    Aviation Analyst

    Pascal Chui
    Pascal Chui

    Pascal Chui

    Valuations Analyst

    YIRU ZHANG
    YIRU ZHANG

    Yuri Zhang

    Senior Valuations Analyst

    Eric Tamang
    Eric Tamang

    Eric Tamang

    Valuations Analyst

  • A Hot July for U.S. Travel — And a Surprisingly Cool Destination

    The story last summer in the closely-watched U.S. domestic and transatlantic markets was growth. The story this summer? More — a lot more. The insights below are from an analysis of Cirium Diio Mi schedule data.

    The U.S. Domestic Market: Up 6% in July 2024

    The major U.S. airlines have scheduled around 6% more domestic capacity this July than last year — with a notable exception. This July, JetBlue has scheduled 9.2% fewer domestic capacity compared to last. (JetBlue announced capacity cuts earlier in the year primarily due to staffing and the congested network on the East Coast of the U.S.) Southwest Airlines will schedule only 1.4% more seats for this July compared to last, having reduced its plans due to availability of the Boeing 737 MAX aircraft they rely on.

    The airlines’ plans differ substantially depending on the type of carrier. Three ultra-low cost carriers Frontier, Spirit, and Sun Country will bring significantly more capacity to their markets.

    Breeze Airways — which now boasts a fleet of 40 aircraft (of which 25 are Airbus A220) — shows a 33% increase in scheduled seats. In the aggregate, these carriers fly substantially fewer seats than the Big 4 U.S. airlines. American Airlines will fly the most seats out of any carrier at more than 20.5M scheduled seats, followed closely by Southwest Airlines.

    Scheduled Seats in July 2024

    AirlineJuly 2024July 2023Percentage Change
    Alaska Airlines5,152,7414,789,0667.59%
    Allegiant Air2,263,7162,154,8225.05%
    American Airlines20,519,68018,973,8298.15%
    Avelo Airlines294,490291,9440.87%
    Breeze Airways542,516406,81033.36%
    Delta Air Lines18,659,45317,777,3474.96%
    Frontier Airlines3,989,4722,939,32635.73%
    Hawaiian Airlines1,105,7051,124,554-1.68%
    JetBlue2,993,5423,298,323-9.24%
    Southwest Airlines20,325,41420,051,0831.37%
    Spirit Airlines4,740,1353,906,19421.35%
    Sun Country Airlines576,414462,21024.71%
    United Airlines14,407,78613,987,6543.00%

    Transatlantic Flying: Up 7.8% in 2024

    Airlines increased capacity in summer 2023 compared to 2022 by 18%, and are poised to do the same for July 2024. The transatlantic carriers — including the European operators — will deploy additional capacity from the U.S. to Europe, with schedules showing a 7.8% increase in seats flown over July 2023.

    The top carriers? United and Delta are following the lead they set last summer, finding opportunities for revenue premiums. This summer, watch for the Europe carriers to add — including Air France with a 15% increase in scheduled seats — perhaps betting on the strength of demand for the Paris Olympics.

    Airline NameJuly 2024July 2023Difference% Difference
    United Airlines722,428701,07521,3533.0%
    Delta Air Lines719,985685,49734,4885.0%
    American Airlines565,077533,37731,7005.9%
    British Airways419,169411,5677,6021.8%
    Lufthansa323,584292,85430,73010.5%
    Air France279,426242,50836,91815.2%
    Virgin Atlantic242,973223,51719,4568.7%
    Turkish Airlines209,672187,29122,38111.9%
    Aer Lingus163,591154,6748,9175.8%
    Iberia131,072114,42816,64414.5%
    Icelandair117,360104,60012,76012.2%

    Where Are the Destinations of Choice?

    For the European market, Denmark, Croatia, and Spain show the most growth in capacity from the U.S., with double-digit growth in flying.

    Denmark27%
    Croatia17%
    Spain16%

    For the U.S. domestic market, the usual U.S. domestic city-pairs always factor — between New York, Chicago, and Los Angeles. However, it may surprise readers to know that Seattle, Washington to Anchorage, Alaska will have the most seats flown in July 2024 — around 146,000 seats, some 2,000 more seats than between New York-LaGuardia and Chicago O’Hare. Alaska Airlines will fly almost 80% of these north-south flights.

    Learn more about Cirium Diio.

  • Ensuring Top Traveler Experience With Proactive Communication

    JIm Hetzel Director of Product Marketing
    JIm Hetzel Director of Product Marketing

    Jim Hetzel, Director of Product Marketing, Cirium

    The experience of the modern traveler with the complexities of aviation goes beyond the beautiful moments of takeoff and landing. It’s a detailed narrative, influenced by various factors such as weather conditions, service logistics, and occasional unexpected issues that can disrupt travel plans. For the pioneers in the industry – our dedicated travel management companies, online travel agencies, and airlines – mastering seamless communication during trips is not merely an added benefit; it’s the core of building customer loyalty. 

    In this deep-dive into the realm of in-trip communication strategies, we unearth insights that can revamp the parameters of customer satisfaction, illustrating how seamless communication channels can transform disruptions into moments of personalized care, and how your brand’s voice, articulated via digital whispers or automated support, can leave indelible marks on traveler’s experience. 

    The Evolution of In-Trip Communication

    Man on phone at airport

    Gone are the days where radio silence from a travel company or airline would be considered the norm amid a flight disruption. Today, proactive, in-trip communication has evolved from a novelty to an unstated prerequisite for all industry players. Modern travelers not only expect to be kept in the loop, but also to receive contextually relevant updates that reflect the sensitivity of their unique travel situations. Airlines and travel service providers who have embraced this paradigm shift are the true vanguards, navigating their way into their customers’ hearts through a relentless pursuit of communication excellence. 

    To delineate this evolution, consider a traveler, stranded at an airport during adverse weather, receiving a personalized alert that not only informs about the flight’s delay but also provides instructions on how to be reaccommodated. The sense of care and support extended through such communications is immeasurable in its impact and resonates far beyond the immediate challenge. 

    Crafting a Consistent Brand Message 

    While the spontaneity and personalization of messages play critical roles, they must always be underpinned by your brand’s ethos. Pushing promotional content or ancillary sales during times of duress may lead to customer dissonance. Instead, a strategy that predominantly serves to inform and support, alongside the regular exchange of positive and brand-reinforcing content, can create a holistic travel experience reflective of your brand’s core values. 

    Imagine a travel management company disseminating engaging travel inspirations while also skillfully handling a travel disruption issue.

    This mix of content not only helps distract travelers during hiccups but also ingrains your brand firmly in their psyche as a reliable, proactive, and empathetic partner. 

    Data-Driven Approach to Communication

    Data is the compass that steers the ship of in-trip communication. By leveraging analytics to pre-empt and address potential disruptions, you can offer a level of service unmatched in the industry. For instance, using real-time geographical analysis, an airline can predict increased traffic in specific airport areas due to flight delays and recommend alternative routes to those customers. 

    Furthermore, data-driven communication isn’t solely about predicting and informing; it’s about engaging. By understanding traveler preferences and behavior, you can tailor your messages to not just relay critical information, but also offer personalized support that’s both timely and relevant. A succinct message picking up on a traveler’s affinity for a particular café or gift shop, and subtly guiding them there to wait out the delay, transcends conventional customer service into a truly personal space. 

    Improving Disruptions With Traveler Waiver Services

    During major flight disruptions, empowered passengers armed with structured waiver information can make informed, rapid adjustments to their travel itinerary. This not only expedites the re-accommodation process but also arms them with the confidence that their choices are being guided by their rights as passengers, as assured by the weaver services. 

    Travel Management Companies and airlines have noted a considerable reduction in agent time on calls during mishaps – by as much as 20%.

    This substantial efficiency improvement is not just a cost-saving echo – it’s an embodiment of the power of informed choices, which usually are the best one’s customers can make. 

    Best Practices and Case Studies 

    Two industry exemplars, Fox World Travel and Gant Travel, provide case studies that underscore the efficacy of proactive in-trip communication. Fox World Travel reduced the average wait times for disrupted air travelers by a third, while Gant Travel’s lean management system ensured a fleet-footed response to aid distressed travelers, reducing overall agent call times and enhancing customer satisfaction. 

    In their success narratives, we find the blueprint for best practices: seamless integration of communication systems, agile responses to disruptions, and cohesive strategies that intertwine traveler welfare with business goals. 

    The Human Element in the Digital Deluge

    In an era dominated by digital interfaces and AI-driven experiences, do not underrate the irreplaceable touch of human interaction. Behind every flight change alert or waiver notification stands a traveler in need of care. Balancing automated responses with the opportunity for direct human support is the fine line that separates good from exceptional in-trip service. 

    The intuitive leaps of a support agent or the compassion of a travel representative in the face of a service challenge can turn a potentially negative experience into a positive affirmation of customer service. While digital communication is efficient and timely, it is the human touch that lends a memorable aspect to your customer’s travel narrative. 

    Aligning Stakeholders for a Unified Experience

    The harmony of in-trip communications is the sum of its parts, and ensuring these parts harmonize to produce a unified experience is integral. Travel management companies, online travel agencies, and airlines need to align their communication strategies to create a seamless continuum of support for travelers. 

    Looking Ahead – the Future of Proactive In-Trip Communication

    In-flight Wi-Fi, mobile apps, and AI integration – the arsenal of in-trip communication tools is expanding at a rapid pace. The future promises an even more connected, informed, and empowered traveler, offering new opportunities to engage and cater to their individual journeys. 

    The role of data will continue to grow, shaping real-time, hyper-personalized engagements. Human support will complement AI, amplifying the layers of care available to passengers. The stage is set for a new era where in-trip communications will not just manage disruptions but transform them into opportunities to reiterate brand promises and deliver exceptional customer experiences. 

    Take-Away Action Items

    • Employ data analytics to enhance the efficiency and relevance of your in-trip communications. 
    • Develop a robust travel waiver strategy to assist travelers during disruptions effectively. 
    • Ensure your in-trip communications resonate with your brand’s voice and values. 
    • Integrate digital solutions with human support to achieve a harmonious customer experience. 
    • Collaborate with stakeholders to craft communication strategies that serve the traveler’s best interest. 

    The tapestry of in-trip communication is woven from the threads of technological advancement, data sophistication, and the ageless virtues of personalized service. As we steer towards a horizon brimming with new opportunities and challenges, it is these very threads that will fortify our brands, elevate customer satisfaction, and set novel standards in traveler experience. 

    To learn more about Proactive Traveler Services, contact us to speak with our Cirium experts. 

  • Improved On-Time Performance and Competition in Canada

    Improved On-Time Performance 

    It’s not easy operating an airline in Canada — a large country with three major hub airports in Toronto, Montreal, and Vancouver, and a variety of weather challenges no matter the time of year. Nevertheless, the Canadian carriers demonstrated solid on-time performance in spring 2024, which bodes well for summer travel. Indeed, among North American airlines, WestJet was third, and Air Canada sixth, for on-time performance in May 2024. 

    In June 2024 (at the time of writing), the major Canadian carriers had comparatively high completion rates. Completion factor measures the number of flights flown compared to those scheduled. At the time of writing, Porter Airlines had a 99.52% completion factor, Flair Airlines at 99.27%, WestJet at 98.58%, and Air Canada posted 97% — with the latter on a significantly higher number of flights than its Canadian brethren. 

    Toronto-Pearson Airport: Marked Improvement 

    Toronto-Pearson Airport has faced challenges related to on-time performance in recovery from the pandemic. However, the airport has demonstrated consistent and improved departure performance in 2024 to date — even in the winter months of 2024. Toronto-Pearson’s D14% — the percentage of flights scheduled that departed within 14:59 of the scheduled departure time — consistently averaged around 70% in the first half of 2024 and into late June 2024. (Last June, Pearson’s D14% was around 59%). In May 2024, Toronto-Pearson had 70.96% of its flights depart on time, on around 14,500 flights. By way of comparison, the best performing U.S. airport in May 2024 was Salt Lake City, with 82.69% of flights departing on-time on around 10,000 flights. The best performing Canadian airport, Calgary International Airport, had a D14% of 77.07% on around 6,000 flights.  

    The Canadian Domestic Market: Seats Flown Up 6% in 2024 

    The Canadian airline industry has witnessed many changes in 2024 to date. Indeed, ultra-low cost carrier Lynx departed the market in bankruptcy, and long-time premium carrier Porter Airlines has taken delivery of Embraer E2-195 jets. At the time of writing, Porter has 33 jets in service, and is primed to increase its Canadian domestic flying by 63% (measured on seats flown) this July compared to last. WestJet will increase their July seats flown by 8% compared to last July. In contrast, ultra-low cost carrier Flair will fly 7.5% fewer seats this July 2024, compared to last July.  

    Transatlantic Flying from Canada to Europe: Up Almost 7% in 2024 

    Air Canada, Transat, and WestJet are the perennial airlines flying Canadian customers to European destinations, and vice-versa. Air Canada will fly twice as many seats as Air Transat, increasing its seat count by 3.3% this July compared to last. (These carriers will benefit from the general transatlantic demand, and phenomena such as North American customers seeking to enjoy Taylor Swift concerts or the Paris Olympics). Transat is up 6.2% on seats in July 2024 compared to July 2023, with WestJet increasing its seats flown by almost 20,000 seats in the month of July 2024 alone compared to July 2023.  

     Jul 2024 Jul 2023 Diff Percent Diff 
    Airline Name Seats Seats Seats Seats 
    Air Canada 451,984 437,607 14,377 3.3% 
    Air Transat 216,433 203,756 12,677 6.2% 
    WestJet 71,428 52,480 18,948 36.1% 
    TOTAL 739,845 693,843 46,002 6.6%  

    Learn more about Cirium On-Time Performance Reports.

  • Journey to Net-Zero: The ‘Fleet Inertia’ Challenge

    Andrew Doyle
    Andrew Doyle

    Andrew Doyle, Senior Director – Market Development, Cirium

    Global jet fuel demand is forecast to hit almost half a billion tonnes by 2050 – a more than 40% increase over 2024 – bringing into stark focus the challenge the industry faces in achieving its self-imposed net zero emissions target. This is based on the prediction by Cirium sister data and analytics provider ICIS, that growth in the fleet of conventionally powered aircraft will see overall fuel usage increase by an average of 1.5% annually over the next 25 years.

    ICIS Jet fuel demand forecast

    Although incremental aircraft and engine technology advances will continue to bring some efficiency improvements, the overall expansion of the commercial fleet – coupled with the fact that aircraft being delivered today are likely to remain in service for an average of around 25 years – means huge volumes of sustainable aviation fuel (SAF) will be needed if the industry is to have any hope of achieving net-zero by 2050 (the specific challenges relating to the scale-up of SAF supply will be examined in more detail in the next instalment of this series).

    The ICIS fuel demand forecast is supported by Cirium Ascend Consultancy’s projection that as far out as 2042 more than two-thirds of the global single-aisle mainline passenger jet fleet will be comprised of the same generation of aircraft and engines being produced today, while on the widebody side the figure will be in excess of 60%.

    The trend for advances in aircraft and engine efficiency to be outpaced by overall fleet growth has persisted for decades. According to an analysis published by the Air Transport Action Group, emissions per revenue tonne kilometre fell by 54% between 1990 and 2019, and yet absolute emissions doubled.

    Fleet Inertia Presents a Huge Challenge to Decarbonisation From a Technology Perspective

    Fleet inertia presents a huge challenge to decarbonisation from a technology perspective

    The latest edition of the Cirium Fleet Forecast (CFF) predicts the delivery of some 46,260 new commercial passenger and freighter jet and turboprop aircraft over the 20 years between 2023 and 2042. Forecast traffic growth will require the global passenger fleet to increase by around 23,000 units, which equates to a 3.2% annual growth rate, taking the inventory to some 49,320 jet and turboprop aircraft at the end of 2042, according to the CFF. The freighter fleet will grow by 2.6% annually to reach almost 4,200 aircraft.

    The turboprop sector is the only one with realistic potential to deliver a fundamental step change in propulsion technology during this timeframe. While there are no electric or hybrid-electric airliners specifically included in the CFF, these will likely be the next powerplant directions for this market, albeit at the smaller end of the sector. Programmes in development include a 30-seat battery electric airliner, hydrogen-electric powertrains for retrofit on nine to 80 seaters and a hydrogen fuel cell powered 50-seater, which is in flight test with retrofits planned for DHC Dash 8s and ATRs.

    However, currently just 3% of CO2 emissions are from aircraft with 100 seats or fewer flying sectors below 1,000km. Conversely, long-haul twin-aisles made up 51% of CO2 emissions in 2019, and are by far the hardest to replace with electric/hydrogen-powered aircraft.

    Timescales for New Technology Aircraft Introduction

    Timescales for new technology aircraft introduction

    The path to achieving net-zero emissions by 2050 for the aviation industry is fraught with significant challenges, in large part due to the ‘fleet inertia’ problem and the substantial increase in global jet fuel demand. While advancements in aircraft and engine technology will contribute to incremental efficiency gains, they are unlikely to counteract the rapid growth of the commercial fleet.

    Sustainable aviation fuel (SAF) will play a critical role in bridging this gap, but its scale-up poses considerable obstacles that require urgent attention.

    The future may hold promise for electric and hydrogen-powered aircraft, particularly in the turboprop sector, yet these technologies remain limited in scope and impact.

    As we look ahead, it is imperative for industry stakeholders to accelerate carbon mitigation initiatives and explore innovative solutions to meet the ambitious 2050 targets. Stay tuned for the next installment in our series, where we will examine the specific challenges and potential solutions related to the scale-up of SAF supply.

    Contact us for more information.

  • Airline Failures – Opportunity for Some?

    Cirium Ascend Consultancy is trusted by clients across the aviation industry to provide accurate, timely, and insightful aircraft appraisals. The team provides the valuations and analysis the industry relies on to understand the market outlook, evaluate risks and identify opportunities.

    Discover the team’s industry reports & market commentaries. Read their latest expert analysis, viewpoints and updates on Thought Cloud.

    Chris Seymore aviation market analysis
    Chris Seymore aviation market analysis

    Chris Seymour, Head of Market Analysis, Cirium Ascend Consultancy

    The recent failure of Australian low cost carrier Bonza, after less than 18 months of flying, highlights the fragility which startups can face in their first years. In an environment of delivery delays and capacity squeeze, airline failures can provide other airlines with opportunities to add capacity at short notice by leasing aircraft which suddenly become available. What is the recent experience?

    Over the past 18 months, since the start of 2023, looking at operators of the popular A320 and 737 family aircraft in particular, 18 carriers operating 177 aircraft have suspended or ceased operations.

    To date, some 50 of these aircraft, or just under 30%, have returned to service, while only three have been parted out.

    Bonza’s four leased 737-8s have ferried to Europe awaiting new lessees. With lessors accounting for over three quarters of the 177 total, returning aircraft represent a problem in dealing with the cost of an unexpected return, but also an opportunity to place with a better credit at increased rates in a capacity constrained market.

    It has averaged around 120 days to get these 50 aircraft placed and back in service and the average age of these aircraft is around 8 years.

    When Norwegian low cost airline Flyr ceased at the start of 2023, its six Max 8s were idle for only around seven weeks before rival Norwegian snapped them up; and its six 737-800s took a little longer but are all flying, most with Jet2.

    The Colombian market saw the cessation by Ultra Air and then Viva Air in March-May 2023, putting 29 A320s into the market. All but one are back in service, these have averaged 144 days to place and the majority have stayed in the local market with Avianca and LATAM Airlines Colombia, thereby minimising the cost of transition for the lessors.

    A320s and 737s From Ceased/suspended Operations – Current Status

    A320s and 737s from ceased/suspended operations – current status

    Source: Cirium Fleets Analyzer (data since Jan 1 2023)

    MYAirline in Malaysia ceased last November but six of its ten mid-life A320s averaged just 90 days before re-entering service, with Air Asia, GlobalX and Corendon Dutch, while three others are placed with IndiGo and Vueling and due to re-enter service.

    So what of the remaining 120 aircraft, which have an average age of 13 years and are averaging 267 days inactive to date?

    Cirium Fleets Analyzer records only 11 as being placed to date. These include five of nine leased 737-8s with Lynx Air, which stopped in February, going to fellow Canadian carrier WestJet. Six young A320s returned by Pacific Airlines of Vietnam after it suspended flights in March have yet to find new homes.

    54 aircraft (44%) are from the fleet of GoFirst of India, perhaps the highest profile casualty, which suspended flying in May 2023.

    With an average age of under 5 years and all but five being A320neos, these are obvious candidates for quick placement.

    But the drawn out process the lessors are having to go through to get them back, with courts ordering deregistration only last month, as well as issues with the GTF engines, mean that they all remain parked, frustratingly as the peak 2024 season is in progress.

    At the other end of the spectrum, the 30-strong fleet of charter carrier iAero Airways of North Carolina, which entered Chapter 11 and stopped flying in April, average almost 30 years old, being mainly 737-300/400s. Eastern Air Express has acquired these assets.

    So there is limited availability of young and newer generation aircraft available in the short term, with the prospect of the GoFirst fleet coming back into service in the coming year(s). Most recently the failure of Air Vanuatu has seen a young 737-800 returning to its lessor and one would expect that to be quickly placed.

    LEARN MORE ABOUT CIRIUM FLEETS ANALYZER.