Analyzing Turkish Airlines route network

 Turkish Airlines is surprising us with new route announcements pretty much on a weekly basis: they are already the airline covering the largest number of destinations in the World and plan to increase this number to 300 by 2015...

Istanbul is, in a way, recovering its traditional role as a connector between East and West, a city that, quite literally, links different continents.

This is why I read with interest this Anna Aero report detailing, among other things, the traffic break-down on some of Turkish Airlines main European routes, both by type (origin and destination versus connecting) and by onward destinations of connecting passengers.

There are two things that I found particularly interesting:

1) Connecting traffic, although relatively high on all routes, as it is the norm for a global super-connector sucha s THY, was not nearly the levels where I would have expected it to be. On most routes there is roughly a 50-50%, 55%-45% split between O&D and connecting traffic, that proves that Istanbul and Turkey are in themselves a particularly large air travel market, a strong point in favour of Turkish Airlines in its quest for global leadership (wondering what are the figures for the Gulf hubs, but I have the feeling that is a lot less).

2) Some airports appear repeatedly among the main onward destinations of European traffic connecitng at Istanbul, there are three that stand out: BEY (Beirut), IKA (Teheran) and GYD (Bakú). Which means that Istanbul is a sort of World gateway for these points.

The case of Teheran might be explained by the political situation, which makes it unlikely that most international airlines will return to the country anytime soon.

In the case of Bakú, the situation might change a bit in the near future if Azerbaijan Airlines' expansion plans finally materialize (they even have a couple of Dreamliners on order).

But what happens with Beirut? I guess someone at MEA should be taking notes of this report...it looks like the market is there!

Air Lituanica, the new Lithuanian flag carrier: an answer to Vilnius connectivity problem?

While I recently wondered whether Vilnius, Lithuania, was still the European capital with the worst air connections some people where at work to prove me wrong...because Vilnius (and Lithuania) may soon have a new flag carrier: airLituanica (I am actually not sure whether I should write it like this, "airBaltic-style" in small caps, or as two words, "Air Lituanica", as the airline name appears written both ways throughout the presentation)

One interesting aspect of this new airline project for Lithuania is that there is a whole presentation about the project on slideshare (with date as of September 2012), that you can see here (part of it is in Lithuanian, a language that I, unfortunately, do not master, but there is also a section in English)

Air Lituanica pristatymas from Vilniaus miesto savivaldybė / Vilnius City Municipality

It looks like the new Lithuanian airline will start operating at some point in early 2013 with an initial fleet of two Embraer E-175 (to be increased to 4 in 2015) and routes to Amsterdam, London Gatwick, Brussels, Moscow Vnukovo and Kiev, in addition to the domestic destination of Palanga, on the Baltic coast. This network would later be expanded to include cities such as Stockholm and Munich and more.

(By the way: given that it is clearly stated that the fleet is going to be exclusively made of Embraers E-175s it would add credibility if future presentations would be illustrated with pictures of this aircraft type, rather than a mix of Boeing 737s and Airbus A320 that can be found on this one!)

The business model is defined as "low cost plus" which I assume to be another name for a "hybrid carrier", of the sort of Vueling or Air Berlin.

My first thoughts when reading about the project is that it is a going to be an easy ride, with a relatively small home market and airBaltic, Wizz Air and Ryanair with well-established networks in the region. Plus the fact that airLituanica is being kick-started by the city of Vilnius makes me, inevitably, think of Spanair, another airline that was supported from public institutions with the idea of fulfilling a "strategic" connectivity role for the city it served.

From the information found in the presentation above, it looks like the new carrier has got some very experienced advisors, though, such as London-based Aviation Economics, so we'll give it a vote of confidence after all...while we wait and see whether it is able to carve out a niche market for itself in this difficult market.

Vueling keeps growing, plans to fly to a 100 cities from Barcelona

More like this coming soon!

There was quite a lot of expectation today to hear what Vueling had to announce.

And there were interesting novelties, as Vueling continues to upgrade its product with the introduction of a business class. One step that was anticipated as it fits into the carrier's strategy to target business travellers.  So, this announcement did not really come as a surprise, as I had already pointed out in these pages how there were objective measures to qualify Vueling as a hybrid airline rather than a low cost carrier and the airline's top managers had already provided some hints about the imminence of this move.

Regarding fleet renewal and expansion programme Vueling will be getting some 9 brand-new aircraft of the A320 family shortly (at the moment is still flying some Iberia-then-Clickair 1990s-vintage A320s) and some of them will be equipped with wi-fi.  The first (unanswered) question that comes to my mind is whether this means the end of Vueling's flirtation with Bombardier's CSeries...

Another important novelty is the massive route expansion out of Barcelona and into Europe and Africa.   The new twice daily service between Barcelona and London Gatwick really stands out, because until now Vueling had avoided head-to-head competition on this route with Easyjet and Ryanair. Also of note is the airline'e first foray into sub-saharan Africa, where it is "taking over" the niche route to Banjul, that used to be operated quite successfully by now-defunct rival Spanair. New routes to Morocco reinforce the growing presence of Vueling in Africa, that I commented already a few months ago. 28 new routes in total for the summer season (you can find the list here) that will bring to 100 the number of direct destinations operated by Vueling from Barcelona.

In another example of the company's hybridisation, Vueling's CEO Alex Cruz said that he aims to make of Barcelona one of Europe's top hubs (I guess he was referring to intra-European connections, since there are still few long-haul flights at Barcelona that Vueling's passengers can connect too). In order to support this claim he revealed that transit passengers already make 20% of total traffic (not a bad number for a company that was not initially conceived as a hub-and-spoke network carrier!).

The hub-in-the-Med possibility that I outlined nearly two years ago might finally come to fruition after all...

UPDATE on my Georgian air travel market post: British Airways sees the potential too

Updates on stories I have written recentlykeep coming today....!

On my post of 30th June, I noted I wrote how the Republic of Georgia is seeing a notable increase in tourist numbers and airlines are taking note.

British Airways somehow seem to agree with this positive outlook, since one of the decisions it has taken regarding BMIs old network has been to upgrade the London Heathrow-Tbilisi link to nonstop daily, operated by an A321.

Certainly good news for the Georgian tourism industry and those that fly this route regularly, not so good for Turkish Airlines: it's daily service via Istanbul was one of the most competitive offerings on this route, less so from the moment British Airways starts to fly direct.

Is Vilnius still the worst-connected capital in the EU?

In 2009 Bloomberg published a story bringing attention to the fact that, after the collapse of Lithuanian carreir FlyLaL, Vilnius, Lithuania, had become the capital city in the EU with the least air connections.

Is this still true? possibly....but, despite the fact that it has proven really hard for a national airline sector to take-off in Lithuania (FlyLal's bankruptcy was followed by that of Star1 Airlines and the closure of AirBaltic's, Air Estonia's and Skyway's Vilnius mini-bases), traffic numbers are back on the rise (getting close to pre-2009 levels). The explanation is very simple and it is the same that is happening all over Europe when a flag carrier has gone bust (for example, Malev), low cost airlines step in.

 Wizz Air, to the rescue

In the case of Vilnius it has been mainly Wizz Air, that opened a base in 2010, and Ryanair, that offers flights to 9 destinations from the Lithuanian capital.

Having low cost carriers fill the vacuum left by collapsing network carriers might not be a solution everyone likes, as low cost carriers are far from fulfiling the flag-carrying role that was usually reserved to national network carriers, premium passengers might also ressent the lack of a full-service airline on most routes...but, hey! this is the reality of the market and this is a substitution process that I would expect to see in more places in the near future, as msot European network airlines are a legacy of an era that is not coming back!

Routes Exchange: an innovative approach to route planning for airlines and airports

Route planning is one of the aspects of the airline business that I am more passionate about.

In the competitive globalized World we live in it is not only airports but whole communities that are affected by route planning decisions. Network quality is vital not only to airports but it can also have a dramatic effect on the overall competitiveness of the region they serve.

Just think what was the typical centralized route network in every European country twenty years ago (I still keep some flag carrier's in-flight magazines from those days!), you would have one or (eventually) two hubs per country with flights to regional airports and a handful of other major capitals, most secondary airports had to live off charter flights and the regular links to the country's hub...but then came Ryanair, Easyjet and all the other LCCs and proved that many more combinations were possible, that if you had the right business model you could make thinner routes work too and the overall air travel cake got bigger.

But the route frenzy is not over, just as we see the low cost model consolidating in virtually every major air market (except Russia), I would expect another wave of route development driven by the long-haul this time: better aircraft economics (think Boeing 787) will unlock potential on many thin routes, the emerging mega-carriers like Emirates and Qatar Airways will continue to build up their presence in Europe, China and the US, increasingly covering second tier cities (something they already do in India) plus the long-haul low cost model that is already succeding in the Asia-Pacific region is coming to Europe soon.

There is a world of possibilities out there, but...how to make sense of all the different options?

Here is when "Route Exchange" comes into play...

I found the concept really innovative, "Route Exchange" is an online platform, managed by Routes Online, that airlines and airports can use to evaluate potential new routes. It is a tool that helps both sides (airlines and airports) identify market opportunities and facilitates the information flow between them.

There is also the possibility of proactively seeking new routes opportunities, this is for example what AirAsiaX did this summer, sending a Request for Proposals (RFP) for its upcoming European expansion. All European airports were invited to submit their RFPs to the innovative Malaysian airline...but this particular contest is going to be the topic of a separate upcoming post...

Mexicana's bankruptcy and the quickly-adapting Mexican air travel market

Picture: Wikipedia

Mexico's second-largest carrier, Mexicana de Aviación, went bankrupt last August, however, the market moved in quickly to fill the void. Mexico's air traffic did not even register the loss of such a large operator. On one hand a number of new international routes were opened, mainly between the US and Canada and several Mexican destinations. Domestically, the spare demand has been absorbed by local operators, flag carrier Aeroméxico (a Sky Team partner) and Mexican low-cost airlines such as Volaris, Interjet and Viva Aerobus, that reported increasing load factors and market share.

As this article points out, this was possibly a case of excess capacity that has now wiped out. The speed with which the market adapts to the new situation highlights the dynamism of the air travel sector and its capacity to adapt to supply and demand factors and, in my opinion, strengthens the case for limiting government subsidies to loss-making airlines.

In any case, despite there are people willing to defy the new market equilibrium: a reborn Mexicana, under new management, plans to start operations in January. The new Mexicana will be smaller, it has rehired 30% of the previous staff, and operate a fleet of 20 aircraft. Half of its routes will be to international destinations, and, if everything goes well, the plan is to increase the fleet to 30 aircraft during the year and hire the remaining 70% of the staff of the original company.

This is certainly a bold move, since it might bring back excess capacity, but will possibly be good for Mexican air travellers, as the new Mexicana will have to work hard to regain its place under the sun and this possibly means lower fares...

Why Qatar Airways new flight Barcelona-Doha is such an important qualitative step forward for BCN

As I read on the latest edition of The Economist an excellent report on how the major Gulf carriers (Emirates, Etihad and Qatar Airways) are changing the global aviation market ("Rulers of the new Silk Road"), Qatar Airways is starting its new Doha-Barcelona direct flight (as I already mentioned a few months ago).

If the emergence of the Gulf "super-connecting" airlines (I am borrowing some terms from The Economist here) has had a profound effect on the World's air traffic, the new Qatar Airways Doha-Barcelona, although of small quantitative significance with regard to Barcelona's volume of passengers, is also a very important qualitative change for the Catalan airport.

If there is one thing that BCN lacks, it is long-haul routes, which are almost non-existent in an Eastward direction. This deficiency is, partly, compensated with the frequent connections that Barcelona has with main European hubs. As BCN has traditionally lacked a flag carrier of its own, the likes of Air France, KLM, Lufthansa have viewed BCN and its influence area as a large feeder market (the absence of flag carrier factor might be key in explaining why BCN's number of long-haul connection is much smaller than that in airports of similar size with catchment areas of a similar level of economic and demographic development). This was ok (if obviously not ideal) if you wished to travel to major cities in other continents: Beijing, Shanghai, Tokyo, Bangkok...they are all just one stopover away from BCN.

However, and as The Economist also notes, one of the strengths of the Gulf carriers is that they have diversified their networks to cover multiple secondary markets in the Middle East-Africa-South Asia region. The importance of the Qatar Airways connection can then be understood in this way: it not only adds a new destination in a previously undercovered region (the Persian Gulf), and an additional East-West connection route for Barcelona, but it also puts a large number of secondary markets within one stopover of BCN. Getting from BCN to places like Melbourne (Australia), Kochi (India), Dammam (Saudi Arabia), Dhaka (Bangladesh), Kathmandu (Nepal)...or even the Maldives, could involve complicated and costly route plans with multiple transfers.

The significance of this new route for the Barcelona market is not only that it gains access to a prestige airline renowned for its excellent service, but that the size of the globe has shrinked overnight in an Eastward direction.

The Great Circle Route and why has Finnair become an specialist in Asian routes

The shortest flight route is not always a straight line. We are used to see the Earth represented flat in a two-dimensional map, however this representation ignores that the Earth is round. The curvature of the Earth means that the most direct routes between Europe and North America or between Europe and Asia would normally go across the polar regions, since the distance to be covered is smaller at those places. This is known as the Great Circle Route.

If you want to see what is the most direct route between two points check out this website

For example, for the Lisbon to Tokyo (Narita airport) example enter LIS-NRT and press "Map", you will be surpised by the results! You can do the same with any airport city codes (you can find a list of airport codes here.

Now you can see why Finnair is focusing on marketing its Helsinki hub (HEL) as the gateway to Asia...