LCCs: in it for the long-haul?

October 217 ANALYSIS LCCs: in it for the long-haul? Exploring the current state of long-haul low-cost (LHLC) using schedules, fleet and flight status data Data is powerful on its own, but even more powerful in combination with other relevant data sets. Reviewing core aviation data sets such as schedules, fleet and flight status together makes it possible to investigate a series of hypotheses about the LHLC market, and produce further analysis around this and other markets. As a result, more complex questions can be answered, such as: What does the current LHLC transatlantic landscape look like and how is it changing? Do low-cost carriers get more hours from their aircraft when flying long-haul? What difference does it make flying long-haul into smaller airports? What does the current LHLC transatlantic landscape look like and how it is changing? Looking at transatlantic flights any aircraft that flew between Europe and North America during August and September 217 and how they re split into low-cost, regional and mainline categories according to FlightGlobal s region and carrier definitions makes it possible to evaluate how the LHLC landscape is evolving relative to other markets. Low-cost transatlantic 545,393 seats in Sep 217 6 city pairs flown by low-cost carriers Norwegian Wow Air WestJet Level 63.7% 22.2% 12.2% 1.9% Copyright 217 FlightGlobal Page 1 of 1

Market view: transatlantic LCCs Leisure transatlantic 651,779 seats in Sep 217 96 city pairs flown by leisure carriers Air Transat Thomas Cook Condor Air Europa XL Airways France Thomson Airways Other 51.5% 16.5% 13.6% 6.5% 4.7% 4.4% 2.8% Mainline transatlantic 8,797,973 seats in Sep 217 357 city pairs flown by mainline carriers Copyright 217 FlightGlobal Page 2 of 1

Market view: transatlantic LCCs Seat share 1 Capacity share from September 23 to 217 75% 5 Mainline Leisure Low-cost Other 25% 24 26 28 21 212 214 216 218 Historical schedules data demonstrates that, while low-cost carriers still account for a small portion of the transatlantic market 5.5% in September 217 there has been a significant increase in the last few years. Comparing August, the peak month for transatlantic seats, in 216 and 217 reveals that mainline carriers have grown seats by 2% compared to a 66% growth for LCCs. In absolute terms, these percentages translate to similar numbers: around 2, seats each. Do LCCs get more hours from their aircraft when flying long-haul? Fleet data and flight status data makes it possible to use gate times to compare airlines based on a calculated utilization, looking at the flights made by an individual aircraft in a day, between midnights in UTC. For this analysis, departure day flights included flights before midnight and arrival day flights included flights after midnight. A histogram shows the distribution of these flights after being iterated over a fleet for July and August 217. The data below illustrates an aircraft that flew between 12 and 14 hours on Tuesday, Wednesday and Saturday during a period which corresponds to three counts in the 12-14 hours bin in the histogram on the right-hand side. Sample week of flights Utilization distribution of sample week of flights 1.5h 6.h 12.5h Sun Mon Tues Number of aircraft-days 3 2 13.1h Wed 8.4h Thurs 1 8.8h Fri 12.3h Sat 2 4 6 8 1 12 14 16 18 2 22 24 Hours of utilization per aircraft per day Copyright 217 FlightGlobal Page 3 of 1

Market view: transatlantic LCCs Low-cost twin-aisle vs mainline twin-aisle Low-cost twin-aisle utilization Only aircraft that have spent >4 time flying transatlantic Percentage of aircraft-days 6 4 2 2 aircraft flying 1,87 Level A33s 6 4 16 aircraft flying 14,343 Norwegian 787s 2 6 4 3 aircraft flying 2,623 Wow Air A33s 2 2 4 6 8 1 12 14 16 18 2 22 24 Hours of utilization per aircraft per day Mainline twin-aisle utilization Only aircraft that have spent >4 time flying transatlantic Percentage of aircraft-days 6 4 2 95 aircraft flying 69,42 American Airlines 6 4 2 8 aircraft flying 61,59 hours over 63 days British Airways 6 4 2 114 aircraft flying 14,834 hours over 63 days Delta Air Lines 2 4 6 8 1 12 14 16 18 2 22 24 Hours of utilization per aircraft per day Using this method, it is then possible to compare different sets of fleets despite them having different fleet sizes and numbers of flights. After filtering out aircraft that spend less than 4 of their flying hours on transatlantic routes, early indications suggest low-cost carriers are getting similar utilization out of their widebodies as this selection of mainline carriers. Initial results for Norwegian and Wow Air are promising, as they appear to obtain 16 hours or more per day from their widebodies over 6 of the time. Copyright 217 FlightGlobal Page 4 of 1

Market view: transatlantic LCCs Transatlantic single-aisle vs traditional LCC models Transatlantic single-aisle utilization Only aircraft that have spent >4 time flying transatlantic Percentage of aircraft-days 4 3 2 1 9 aircraft flying 5,87 Norwegian: all 737s 4 3 2 8 aircraft flying 6,758 Wow Air: all A321s 1 2 4 6 8 1 12 14 16 18 2 22 24 Hours of utilization per aircraft per day Traditional LCC utilization Includes all flights by these airlines' fleets Percentage of aircraft-days 4 3 2 1 233 aircraft flying 177,747 JetBlue Airways 4 3 2 398 aircraft flying 29,843 Ryanair 1 4 3 2 726 aircraft flying 48,379 Southwest Airlines 1 4 3 2 1 85 aircraft flying 41,42 2 4 6 8 1 12 14 16 18 2 22 24 Hours of utilization per aircraft per day Wizz Air Compared with traditional low-cost models, which tend to be short-haul, Norwegian and Wow Air seem to be getting more utilization out of the narrowbodies they are flying on mainly transatlantic sectors. The obvious question to ask is whether Norwegian and Wow Air s higher narrowbody utilization, when compared to the likes of Ryanair and Southwest Airlines, is due to their long flight lengths. The answer to this question can be found by plotting the number of hours flown by a particular aircraft on a specific day can be alongside the mean number of block minutes operated by a particular aircraft on a particular day. Copyright 217 FlightGlobal Page 5 of 1

Market view: transatlantic LCCs Higher utilization Longer stage lengths Higher utilization (bigger number on the top plot) should correlate with longer stage lengths (bigger number on the bottom plot), and this appears to be borne out by the data. Unlike the method used to calculate utilization, it wasn t fair to split block minutes at midnight, so the mean block minutes were derived from the departure date of all flights. Copyright 217 FlightGlobal Page 6 of 1

Market view: transatlantic LCCs What difference does it make flying into smaller airports? Flight Status data provides a view into the time between flights the ground events to get an idea of the how it compares for an airline like Norwegian to fly into big, established airports like BOS Boston, EWR Newark and JFK New York against smaller airports like BDL Hartford, PVD Providence and SWF Newburgh. This is not a completely direct comparison because Norwegian uses 787s to the bigger set of airports and 737s to the latter set. In all these comparisons extreme outliers were not plotted to best show the majority of the data points, but they have been included in the summary statistics. An on-time flight is defined as arriving within 15 minutes of its scheduled gate arrival time. Any flights where a gate arrival time was not available have been ignored. As the most critical metric to on-time performance is arrival time, if a flight departed from one of the airports that we re interested in but still arrived late then that will count as a late flight on the departure airport s statistics. On-time performance findings Flying into smaller airports correlates to higher average on-time performance Norwegian to BOS, EWR, JFK Arrival delay (mins) On-time performance 4 BOS Boston EWR Newark Flights: 118 : 49% Mean delay: 44.3 mins 3 JFK New York Flights: 39 : 59% Mean delay: 41.9 mins Flights: 462 : 53% Mean delay: 64.5 mins 2 1-1 Inbound Outbound Norwegian to BDL, PVD and SWF Arrival delay (mins) On-time performance 4 BDL Hartford PVD Providence Flights: 49 : 71% Mean delay: 42.9 mins 3 SWF Newburgh Flights: 292 : 81% Mean delay: 63.2 mins Norwegian flights into Boston, Newark and JFK tend to be on time around half the time whereas flying into Harford, Providence or Newburgh, flights have a much higher on-time record, averaging >7 on time. Flights: 356 : 72% Mean delay: 66.8 mins 2 1-1 Inbound Outbound Copyright 217 FlightGlobal Page 7 of 1

Market view: transatlantic LCCs Turnaround times findings Scheduling or passenger volumes could be the rate-limiting factors causing the airline to wait for the optimum departure time Turnaround times (mins) BOS Boston EWR Newark JFK New York 8 6 Norwegian to BOS, EWR and JFK Turnaround times Turnarounds: 58 Total turnaround: 12 hours Median turnaround: 122. mins Turnarounds: 2 Total turnaround: 4 hours Median turnaround: 112. mins Turnarounds: 228 Total turnaround: 521 hours Median turnaround: 126.5 mins Turnaround times (mins) 4 2 BDL Hartford PVD Providence SWF Newburgh 8 6 Norwegian to BDL, PVD and SWF Turnaround times Turnarounds: 24 Total turnaround: 49 hours Median turnaround: 117.5 mins Turnarounds: 143 Total turnaround: 51 hours Median turnaround: 194. mins Turnarounds: 178 Total turnaround: 1,258 hours Median turnaround: 154. mins This is a good example of where data analysis reveals some unexpected insights. You might expect the turnaround times to be better at a smaller airport due to less congestion on the ground, less time waiting for a gate to be free, or more access to ground services. However, Norwegian s turnaround times from the smaller airports are longer than at the main hubs of Boston and New York. This suggests there s more at play than simply the time it takes to prepare the aircraft for its next flight physically. 4 2 Copyright 217 FlightGlobal Page 8 of 1

Market view: transatlantic LCCs Taxi times findings Airlines enjoy shorter waits between landing and gate arrival at less trafficked hubs Norwegian to BOS, EWR and JFK Taxi times (mins) Taxi times 1 75 BOS Boston EWR Newark Outbound taxis: 6 Mean taxi out time: 19.4 mins Inbound taxis: 54 Mean taxi in time: 16.7 mins JFK New York Outbound taxis: 2 Mean taxi out time: 18.1 mins Inbound taxis: 2 Mean taxi in time: 1.7 mins Outbound taxis: 233 Mean taxi out time: 39. mins Inbound taxis: 231 Mean taxi in time: 27.9 mins 5 25 Inbound Outbound Norwegian to BDL, PVD and SWF Taxi times (mins) Taxi times 1 75 BDL Hartford PVD Providence Outbound taxis: 22 Mean taxi out time: 16.5 mins Inbound taxis: 21 Mean taxi in time: 5. mins SWF Newburgh Outbound taxis: 1 Mean taxi out time: 11.5 mins Inbound taxis: 13 Mean taxi in time: 5.8 mins Outbound taxis: 143 Mean taxi out time: 12.8 mins Inbound taxis: 75 Mean taxi in time: 6.5 mins 5 A data comparison of the taxi in and out times of larger vs smaller US airports reveals a stark comparison that for flights coming into JFK where aircraft taxi for an average of 28 minutes before getting to their gate, compared to flights into Newburgh which enjoys a typical taxi of just 6.5 minutes on arrival. Given that ground journey times between SWF and downtown Manhattan are usually around 1 hour 15 minutes it suggests that SWF is a viable alternative to JFK for visitors to New York when you include flight and ground transfer time in the equation. 25 Inbound Outbound Copyright 217 FlightGlobal Page 9 of 1

Market view: transatlantic LCCs Request a consultation to learn how our combined data capabilities can help your business. FlightGlobal has been a pioneer of aviation intelligence for over 1 years. We provide everything you need to know about the aviation industry from historical aircraft valuations and the world fleet, world schedule and network to current insight on valuations, industry drivers and future trends. For more information visit flightglobal.com/about-us Europe, Middle East and Africa Headquarters and London office +44 ()2 7911 14 The Americas New York Office +1 646 746 6851 Asia Hong Kong Office +852 2813 6366 Tokyo Office +81 3 5561 563 Singapore Office Copyright +65 678 217 4315 FlightGlobal Page 1 of 1