Europe Outlook: 2017, the year of the consolidation that wasn’t, 2018 heavily clouded by Brexit

FOR EUROPE'S airline sector, 2017 was the year of the consolidation that wasn't. Three airlines went bankrupt, but only Monarch fully exited the market (representing less than 1% of seats in Europe). Monarch struggled with collapsing demand for Turkey and North Africa and the consequent yield depressing switch of competitor capacity into Spain. Both airberlin and Alitalia went into administration after minority shareholder Etihad Airways decided not to invest more funds.

• Monarch, airberlin and Alitalia went bankrupt in 2017, with negative capacity impact, leaving Lufthansa to dominate some key routes;
• Only Monarch's capacity left the market; much of airberlin's and Alitalia's continues;
• Ryanair's pilot problems marred an otherwise successful year;
• Europe's airlines are expected to achieve a 2017 EBIT margin similar to 2016's record.