Huge congratulations to Birmingham Airport for soaring to new heights as a base for easyJet!
easyJet unveil plans to launch a whopping 16 new routes – from the sun-kissed shores of Tenerife to the hidden gems of Enfidha in Tunisia 🌍✈️
Take a peek at the graph to see the market sizes for the new destinations determined through our BEONTRA Route Forecasting solution! 📈✨
This article delves into the strategic utilisation of the A321LR by airlines in recent times, facilitating entry into new long-haul markets and addressing the need for replacing ageing aircraft, particularly the B757, in smaller existing markets. Launched in late 2018, the A321LR boasts an extended range of up to 4,000 nautical miles, achieved through the integration of three Additional Centre Tanks (ACTs). This inherent value has firmly established the A321LR as the unrivalled choice in the mid-market segment, with no contemporary alternative offering comparable advantages. To underscore this point, the article examines the transatlantic market, with a focus on Aer Lingus, which transitioned from the B757 to the A321LR, and JetBlue, a US Low-Cost Carrier embarking on long-haul flights with the A321LR. The analysis draws upon data from BEONTRA’s Route Forecasting solution, incorporating insights from Market Reports supported by Sabre Global Demand data.
A321LR – Competitors and technical specifications
In the contemporary aviation landscape, the Airbus A321LR stands as a noteworthy contender for the B757’s role, boasting similar capacities and range. While both aircraft share comparable ranges, the A321LR outshines the B757 in terms of fuel efficiency, burning between 15% and 30% less fuel per seat compared to its older counterpart, as per Airbus data.
Selected aircraft technical specifications
Source: Airbus and Boeing
Efficiency in Transatlantic Travel: How Aer Lingus Perfectly Utilizes the Airbus A321LR
Aer Lingus, the Irish flag carrier, strategically operates its fleet of eight A321LRs, averaging around 3 years old, on transatlantic routes connecting Ireland and the UK to major North American cities like New York, Boston, Philadelphia, and Toronto (refer to the map below). These fuel-efficient aircraft, the most sustainable in the fleet, offer up to a 20% reduction in fuel consumption and a 50% reduction in noise. They operate from Dublin, Shannon, and Manchester, complementing the airline’s network alongside A320 family narrowbodies and A330 widebodies. The A321LR’s efficiency proved crucial during the pandemic, providing a cost-effective solution. In contrast, Aer Lingus heavily relied on the Boeing 757 in the mid to late 2010s, particularly on transatlantic routes like Shannon to Boston, where the now-deployed A321LR enhances efficiency and further expands into the North American market.
Aer Lingus: Comprehensive Map of Transatlantic Routes Served by A321L
In the table below, we evaluate Aer Lingus’ A321LR route performance in 2023, analysing key indicators and comparing them with direct competitors in respective markets. The assessment reveals Aer Lingus’s competitiveness, particularly in achieved average load factors and RASK, showcasing their strength against rivals in competitive segments. The consistently high load factors achieved signify effective deployment of appropriately sized aircraft for selected smaller transatlantic routes. Additionally, Aer Lingus strategically utilizes widebodies, such as during last summer to Washington (IAD) and Toronto (YYZ) from Dublin, or to New York (JFK) from Manchester, depending on demand. Notably, competitors like United Airlines still operate 757-200s on smaller secondary routes, indicating Aer Lingus’ adeptness in optimizing its A321LR variant with up to 27% lower trip costs, 24% lower per seat costs.
Aer Lingus Route Performance – Selected Routes operated by A321LR
Direction: Departure – Time Period: 01/2023 – 12/2023
JetBlue’s Transatlantic Triumph: Soaring Across the Pond with the A321LR
JetBlue’s A321LR transatlantic venture, launched from New York-JFK to London Heathrow and Gatwick in August 2021, has exceeded expectations with high demand and remarkable load factors. The aircraft’s efficiency has become a cornerstone of JetBlue’s fleet, facilitating expansion into new markets and meeting evolving passenger preferences. Building on this initial success, JetBlue expanded its transatlantic reach to Paris and Amsterdam last year. Currently operating nine A321LRs, JetBlue envisions four additional aircraft supporting its growing European operations in 2024, potentially opening doors to more markets. Notably, Boston is scheduled to receive a year-round Paris service with the A321LR launching on April 3, 2024, and JFK will introduce a second CDG flight on June 20, 2024.
JetBlue: Comprehensive Map of Transatlantic Routes Served by A321LR
Examining the table below, which assesses how well the A321LR performs on transatlantic flights by JetBlue, it becomes apparent that the US Low-Cost carrier holds a robust competitive position in the respective markets against well-established rivals. The attained average load factors highlight JetBlue’s effectiveness, especially in capitalizing on its extensive network that feeds into its hub in New York JFK. While JetBlue efficiently operates a modern, fuel-efficient narrow-body aircraft with a competitive cost structure, there is still room for improvement in the average RASK achieved on A321LR’s transatlantic routes. This is noteworthy despite the airline’s ability to provide lower fares, in large parts thanks to its deployment of the fuel-efficient A321LR.
JetBlue Route Performance – Selected Routes operated by A321LR
Direction: Departure – Time Period: 01/2023 – 12/2023
The substantial dedication of nearly half the plane to the Mint business class, however, underscores JetBlue’s heavy reliance on premium passengers. Despite effectively sustaining per-seat revenue amidst an impressive 140% surge in transatlantic capacity last year, the challenge lies in corporate travel still trailing up to 20% behind 2019 levels. This presents a significant obstacle for JetBlue and its targeted premium market, impacting their ability to achieve higher revenue per available seat kilometre.
Conclusion
The examination of both Aer Lingus and JetBlue illuminates a discernible shift within the aviation sector towards embracing the A321LR as a replacement for ageing aircraft such as the B757 on transatlantic routes. Airlines are leveraging the fuel efficiency and extended range of this narrow-body aircraft to access new long-haul destinations while phasing out older models, notably the B757, from smaller routes in the mid-market segment. Furthermore, the analysis underscores the adaptability of airlines like Aer Lingus in tailoring capacity to meet demand on transatlantic routes, especially on seasonal routes where widebodies may not be economically viable year-round.
For LCC JetBlue, the A321LR heralds a prime opportunity to launch medium to long-haul routes, particularly across the Atlantic. Its reduced fuel consumption paves the way for potential fare cuts, empowering JetBlue to capture market share from entrenched rivals in the transatlantic arena through a distinct business approach. The enduring triumph of JetBlue’s business model, coupled with the promise of the forthcoming Airbus A321XLR—boasting thirteen units on order—continues to captivate industry observers. With more airlines embracing this cutting-edge aircraft, boasting an extended range of up to 4,700 nautical miles, it is poised to further transform the narrow-body mid- to long-haul market, including the transatlantic segment.
Qantas has announced that it will introduce flights from Perth Airport (PER) to Paris Charles de Gaulles (CDG) just in time for the Olympic Games next year. The oneworld Alliance member is going to inaugurate the service on 12 July 2024 and will operate it with a 4/7 frequency during the Olympics and peak tourist season in Europe. From mid-August the frequency will be reduced to three flights per week.
This adds another destination to Qantas’ existing European network, that currently comprises London Heathrow (LHR) and Rome Fiumicino (FCO). Since the PER-CDG service will continue after the Olympic Games, the decision in favor of Paris must be a strategic one. Naturally, we’re curious which additional factors, apart from the USP “Olympic Games”, have led to the decision in favor of Paris and against other European hubs such as Frankfurt Airport (FRA), Zurich Airport (ZRH) or Amsterdam Airport Schiphol (AMS), which are all still missing in the Qantas network.
Status Quo & pre-COVID comparison:
The table shows the Top 10 passenger potential (based on Sabre GDD, one-way) from PER to Europe in the period 11/22-10/23. Applying the elimination method, the decision in favor of CDG is obvious: apart from LHR, which is already served, only Manchester Airport (MAN) and Dublin Airport (DUB) have a larger potential than CDG. However, both are already perfectly connected via LHR, especially since British Airways, a Oneworld alliance partner, operates out of LHR. The remaining competitors are clearly falling behind CDG.
Hubs of other Oneworld carriers (Madrid, Helsinki) do not appear in the top 10. In addition, the transfer share (beyond traffic) is negligible at 7%, even in the case of LHR as a Oneworld hub.
The table above also shows that, when comparing our top 10 in terms of current and pre-COVID levels, only CDG has already returned to pre-COVID demand, which indicates increased popularity. In contrast, some of CDG’s competitors still lag significantly behind pre-COVID levels; for instance, AMS has only achieved two-thirds of its pre-COVID demand so far.
Consideration of behind traffic & pre-COVID comparison
As mentioned earlier, beyond traffic only plays a minor role, at least for Qantas’ existing European connections. A different picture, however, appears when looking at the behind traffic (i.e. feeder traffic): in the passenger mix of PER-LHR the behind traffic makes up 58% of the total traffic, in the passenger mix of PER-FCO even 73%. When examining the O&D potential of Australia’s two busiest airports, namely Sydney Airport (SYD) and Melbourne Airport (MEL) (both potential behind airports of PER in terms of flight progression), a distinct overview emerges, as illustrated in the table below:
Apart from LHR, CDG has by far the largest O&D potential. If we again compare the current potential with the pre-COVID potential, CDG shows a recovery that is at least as strong as that of its competitors.
The analysis shows that the Olympic Games are not the only argument in favor of starting a connection from PER to Paris. Growing their European footprint, Qantas has undoubtedly made the right choice by favoring Paris over other destinations.
Bamboo Airways, with initial ambitious expansion plans, has now announced to focus on significantly improving its commercial efficiency. This includes discontinuing all of its long-haul routes and making corresponding adjustments to its fleet structure.
In the following, we will conduct a thorough analysis of all suspended international long-haul flights from Bamboo Airways to Europe (LGW, FRA), Australia (MEL, SYD), as well as Southeast Asia, including Seoul (ICN), Tokyo Narita (NRT), Singapore (SIN), and Taipei (TPE); in particular, we will compare the performance of the airline’s individual international routes with those of its direct competitors in the respective markets.
Network – before and after:
Before taking a deep dive into these international routes here’s an overview of Bamboo Airways’ route network before and after the announced restructuring.
Bamboo Airways route network before the announced restructuring:
Bamboo Airways’ downsized route network:
Out of the 14 international routes Bamboo Airways once operated, all are now no longer available, as in their website no longer displays any flights for these services.
To obtain a more comprehensive insight into Bamboo Airways’ performance on the aforementioned suspended international routes, we have compared its achieved RASK, passenger load factors, and offered capacities with those of the other two major airlines in Vietnam, Vietnam Airlines, the state-owned full-service carrier, and VietJet Air, an ultra-low-cost carrier. The data for this comparison is drawn from the BEONTRA Market Insights Reports, spanning the last 12 months of available data (September 2022 – August 2023).
One can easily observe that Bamboo Airways’ RASK on their suspended international routes is consistently lower than that of its direct competitors, Vietnam Airlines and VietJet. The only exception is VietJet’s routes from Ho Chi Minh City to Down Under (i.e., MEL and SYD) where the ultra-low-cost airline managed to seize a larger slice of the market by employing an aggressive pricing strategy, e.g., offering thousands of tickets for 0$ (excluding charges).
Upon closer examination of the overall achieved RASK out of Ho Chi Minh City and Hanoi, it becomes apparent that Bamboo Airways’ suspended international routes have consistently underperformed compared to its network’s profitability average:
Furthermore, Bamboo Airways has been unable to achieve a RASK as high as the one of Vietnam Airlines, or even VietJet when departing from SGN. While Bamboo Airways managed to maintain relatively decent load factors, they often remained on the lower end, particularly for their long-haul international routes to Frankfurt (from SGN & HAN), Bangkok BKK (from SGN), and Tokyo Narita (from HAN) – which were among the lowest compared to its direct competitors in the respective markets.
Competitive Situation:
Bamboo Airways, positioning itself as a hybrid airline, faces strong competition on two fronts out of his home market. As mentioned, on one side, it contends with Vietnam Airlines, the country’s largest state-backed full-service network carrier, and on the other side, Bamboo Airways competes against VietJet, the assertive ultra-low-cost carrier that has been rapidly expanding its market presence.
Beyond that, Bamboo Airways has faced competition from at least one other carrier on the majority of its international routes. In recent months, the competition has further intensified, driven by increased demand, especially on routes connecting Vietnam and Australia. In April 2023, VietJet introduced non-stop flights from Ho Chi Minh City to Melbourne and Sydney, quickly gaining considerable market shares. It has further announced plans to expand its international network even more, offering services to Adelaide, Brisbane, and Perth. In addition, Vietnam Airlines expanded its network as well by launching a new non-stop service from Hanoi to Melbourne in June 2023, swiftly surpassing Bamboo Airways in terms of monthly passenger numbers, beginning as early as July.
Conclusion:
The analysis has shown that the need to significantly enhance its commercial efficiency by discontinuing all of its long-haul routes and concentrating on high-demand domestic and tourist routes using a more uniform narrow-body fleet appeared to be the only viable path forward. It will be interesting to discover to what extend Bamboo Airways can successfully execute this necessary turnaround with its new strategy in the coming weeks and months, especially in light of the intensifying competition within the fiercely competitive Vietnamese and Southeast Asian market. According to recent press releases, the Vietnamese tax authority has meanwhile also frozen accounts of Bamboo Airways due to tax debts in the millions. This is certainly not a positive sign.
While air travel edges closer to its pre-pandemic heights in many parts the world, the aviation industry is far from returning to the same old routine. Our latest analysis reveals not only a diverse recovery pace among airlines, but also a substantial uptick in operational costs. Understanding the implications of these shifts and their impact on airports’ business strategies becomes essential.
In a landscape where precise route costs remain closely guarded secrets, we turned to the widely accepted Cost per Available Seat Kilometer (CASK) – a metric derived from airlines’ financial reports. It is calculated by taking an airline’s operating expenses and dividing it by the total number of available seat kilometers produced.
For this analysis, we set the focus on the cost dynamics in Europe and North America. Leveraging data from BEONTRA’s Route Forecasting solution, our exploration delved into the relative changes in CASK between 2019 and 2022. The following graphs illustrate a marked surge in operating costs across all airlines examined, ranging from 7% to 37% in Europe and 21% to 46% in North America. The average escalation stood at 21% in Europe and a striking 30% in North America.
Interestingly, European giants like Lufthansa and British Airways faced significant increases of 36% and 37% respectively in operating costs. Notably, their capacity measured in Available Seat Kilometers (ASK) was 27% and 30% lower in 2022 compared to 2019. However, the lag in recovery compared to other airlines cannot solely explain the cost spike.
Airlines with impressive capacity growth exceeding pre-pandemic levels, like Wizz Air in Europe and Spirit Airlines in North America, also faced excessively higher operating costs compared to the 2019 level. Given their ultra-low-cost carrier status, it’s reasonable to infer that soaring fuel prices played a significant role. The staggering 80% surge in jet fuel costs between 2019 and 2022 likely played a substantial part in this cost escalation.
Further details on the reasons behind the changes are beyond the scope of this article. But our analysis illuminates that the post-pandemic operating cost landscape has fundamentally shifted. With operating costs increasing by around 21% in Europe and 30% in North America, business development teams at airports should not only focus on the recovery of market volume, but also closely monitor the balance of load factors, fares and operating costs of their airline customers’ route networks – now more than ever.