Analysis Reports

Cebu Pacific is managing to maintain an impressive capacity growth this year, although it has had to cut back its targets slightly due to the continuing headache of engine availability.

The LCC was expecting to see its grounded narrowbody numbers reducing this year, but instead they have risen to new heights. This underlines the significant role of planning for the uncertainty many airlines are dealing with at the moment.

Despite the engine challenge, as well as delays to new deliveries, Cebu Pacific has secured enough additional aircraft to maintain growth rates that would make many other airlines envious.

Sustainability in aviation was a key theme at the CAPA Airline Leader Summit - Airlines in Transition in Athens on 8/9-May-2025.

IATA Director General Willie Walsh reiterated aviation's commitment to net zero carbon emissions by 2050. However, the world geopolitical backdrop is changing.

According to KLM SVP strategy, sustainability and transformation Zita Schellekens, "Worldwide, I think climate change has been largely politicised, unfortunately. It's science; it shouldn't be political at all".

"This is about climate change, and we're all disappointed in some of the political narrative that is going on," said IAG group sustainability officer Jonathon Counsell. "Climate change is driven by science and not politics, and this problem is not going away."

There was much discussion on the need to encourage the ramp-up in the production of sustainable aviation fuel (SAF) in addition to emissions intensity improvements from aircraft technology and operations.

As Mr Counsell said, "Why are we doing all these things to reduce emissions? It's about protecting our right to grow. Aviation delivers huge social and economic benefits".

A 2023 scheme to attract more private capital into the Philippines' airport system, among other things, might have seemed too ambitious at the time. But it has prompted enquiries for public-private deals, some of which are already in train, while there are two major airport development schemes in and around Manila which, when added to modernisation at the existing airport, should (in theory) give the capital the most extensive airport network of any Asian city.

And before that, the government has gone out of its way to put the air traffic control network right - as it promised it would.

Not everyone is in agreement with the government's aims, but it is clearly trying to put right a system that had got out of kilter compared to some of its neighbours.

There seems to be quite adequate interest from within the country itself, but a little more from abroad would - no doubt - be appreciated.

The problem is that the country does carry some baggage in that respect.

Air Canada has been working to broaden its global network for more than a decade, and those efforts paid off during the first quarter as US tariff threats and other geopolitical uncertainty affected transborder leisure demand.

But the airline's sixth freedom traffic, which Air Canada has also steadily built over the last 10 years, remained robust, and the company sees opportunities to broaden its sixth freedom reach from Mexico.

It was an impressive reallocation of capacity on such short notice, and Air Canada remains confident that its network diversification will continue to serve as a buffer against future uncertainty, reflected by its decision to make a push into Latin America in 4Q2025.

Oman occupies a position next to the Indian Ocean, rather than the Persian/Arabian Gulf and the capital; Muscat's airport is the most easterly of the main air gateways into and out of the Middle East.

Oman Airports, which operates the facilities there, has just published positive financial results for 2024, but they have to be offset against a poor start to the year 2025 at some of those airports - and especially Muscat, which saw an 8% reduction in passenger numbers in 1Q2025, which was more so than some of its much larger regional peers. They are themselves experiencing hard times, while most of the rest of the world forges ahead.

Oman is developing its alternative, differentiated tourism offer, which eschews the bling of Dubai et al in favour of history, culture and nature. The Tourism Minister wants to build new business from Russia, China and Southeast Asia, which are not well connected to it.

Although foreign airlines might help with that ambition, Oman Air will be required to up its own game and provide appropriate connections, especially when it receives new Boeing 787s. Oman Airports and Oman Air are effectively the same company. It may also be asked to reinstate a hub network that was minimised in favour of focused point-to-point markets. For seven years this year it has had a new, modern airport that can handle that demand.

A decade ago it looked as if Oman Airports could be both privatised and become an active investor in overseas airports. Neither of those outcomes actually transpired, but there is some low-level dabbling with foreign airports now, and the demands being forced on it by this new thinking could yet influence the government into seeking one or more private partners for it.

IAG's recently announced order for Boeing and Airbus widebodies is mainly aimed at replacing ageing aircraft. As such it is fairly unremarkable.

However, it also heralds another significant moment in the recovery by Europe's three leading legacy airline groups from the COVID-19 crisis.

According to announcements given to the stock market IAG, Lufthansa and Air France-KLM all plan higher net capital expenditure (capex) in 2025 than in 2024 and 2023. In aggregate, they expect a combined figure of EUR10.0 billion, their highest ever total and 9% above the previous high in 2019.

This indicates a return to confidence after the belt tightening of the pandemic period. However, the capex cycle of the three groups is rising while the margin cycle has been on a plateau for the past three years.

While India's airport privatisation process got under way, albeit falteringly, in 2006, it took until 2022 for Pakistan's Aviation Ministry to start a similar procedure.

Initially, it focuses on the capital city airport, Islamabad, with the intention to extend it to Lahore and Karachi if successful.

It hasn't been successful yet. The only remaining organisation initially to have shown interest, the TERG consortium of Turkish and UK interests, submitted a below-threshold concession fee offer, which has been referred to the IFC (acting on Pakistan's behalf in the matter).

It may well end up being accepted, because after the initial expressions of interest investors have not been exactly queuing around the block.

Pakistan favours certain friendly countries in the vicinity to take on this challenge - and that is what it is, with distinctly unfavourable economic circumstances and the threat of another flare-up between Pakistan and India; despite some promise in the long term, no rapid short term scalability of the airport is in prospect.

Meanwhile, the government is finding it equally hard to privatise the national airline.

Perhaps these are the reasons that collectively have turned much of the global airport investment fraternity away, but if Pakistan is serious about expanding its air transport business, they are really the ones it needs to be attracting.

Although new aircraft deliveries are playing a key role in Malaysia Airlines' network growth, the airline's parent company is looking ahead to its long term needs by launching further aircraft order campaigns this year 2025.

Malaysia Aviation Group (MAG) is still taking delivery of narrowbodies and widebodies from previous orders, and it recently placed a major order for Boeing 737 MAXs. However, it is already seeking to secure more orders for the next phase of its fleet renewal and expansion.

Widebody and narrowbody delivery delays have complicated the airline's network strategy over the past several months, although recent new aircraft arrivals have allowed the airline to increase routes in key markets.

Adding more long haul flights to Australia and Europe form a key part of MAG's plans to strengthen connecting traffic.

Atlanta's Hartsfield-Jackson International is the world's busiest airport, by some margin, and has been for many years.

It isn't the busiest international airport - that is Dubai International - but passenger volumes continue to grow, mainly thanks to Delta's huge domestic hub & spoke operation, which was the raison d'être for the airport's existence in the first place; it wasn't identified for local point-to-point traffic growth, rather as a transit point.

A lesser known fact is that five decades ago the City of Atlanta bought two large tracts of land outside the city, either of which might be used in the future for building a second airport.

While those land parcels have lain there gathering grass, a private company, Propeller Investments, tried to turn a general aviation facility into that second airport over a decade ago, but fell foul of vested interests that included Delta, which is wedded to Hartsfield-Jackson and vice versa.

Now the city has to make a decision on what to do with the land, which is coveted by the State Natural Resources for environmental protection.

The City won't be rushed into a decision, but one has to be made, which weighs its relationship with Delta against the fact that Hartsfield-Jackson cannot be extended indefinitely. It is already operating close to levels never experienced by entire major city collections of airports, let alone one.

The other question is; who would operate a new airport? For that, at least, there are some suitable candidates.

This is part two of a two-part report.

Atlanta's Hartsfield-Jackson International is the world's busiest airport, by some margin, and has been for many years.

It isn't the busiest international airport - that is Dubai International - but passenger volumes continue to grow, mainly thanks to Delta Air Lines' huge domestic hub & spoke operation, which was the raison d'être for the airport's existence in the first place; it wasn't identified for local point-to-point traffic growth, rather as a transit point.

A lesser known fact is that five decades ago the City of Atlanta bought two large tracts of land outside the city, either of which might be used in the future for building a second airport.

While those land parcels have lain there gathering grass, a private company, Propeller Investments, tried to turn a general aviation facility into that second airport over a decade ago, but fell foul of vested interests that included Delta, which is wedded to Hartsfield-Jackson and vice versa.

Now the city has to make a decision on what to do with the land, which is coveted by the State Natural Resources for environmental protection.

The City won't be rushed into a decision, but one has to be made, which weighs its relationship with Delta against the fact that Hartsfield-Jackson cannot be extended indefinitely. It is already operating close to levels never experienced by entire major city collections of airports, let alone one.

The other question is; who would operate a new airport? For that, at least, there are some suitable candidates.

This is part one of a two-part report.