Are European carriers finally aligning capacity with demand?


After months of volatile and deeply depressed demand in the first four to five months of 2009, demand levels reported by Europe’s full service carriers appear to have stabilised over the past few weeks. While a recovery is not yet apparent, the stabilisation in demand has enabled carriers to better match their capacity levels.

AEA Member carriers total scheduled ASKs, RPKs & load factor: First 29 weeks of 2009

Still, with traffic heading back downwards over the past two weeks, even this is little cause for celebration. Pricing remains under considerable pressure and airlines are having to cut further costs to limit their rates of cash burn. Europe’s mega airlines, such as British Airways, Lufthansa and Air France-KLM, are unveiling more workforce cuts and warning of further tough times ahead.

Traffic slowing further

For the week ended 17-Jul-2009 (Week 29) Association of European Airlines' (AEA) total member scheduled traffic (RPKs) declined 3.1% year-on-year, slightly worse than the 2.9% decline in the previous week.

Association of European Airlines' weekly passenger traffic (RPKs) growth (% change year-on-year) by region: First 29 weeks of 2009

Asia Pacific traffic is still suffering most, with traffic down 5.3%. North Atlantic traffic declined 4.6%, while European trans-border traffic was down 3.8%.

Capacity cuts still slowing

Capacity was reduced by 3.5% by AEA member carriers, with airlines again moving their capacity reductions ahead of the decline in demand. 

Association of European Airlines' weekly passenger traffic (ASKs) growth (% change year-on-year) by region: First 29 weeks of 2009

While there was a comparative reduction in total scheduled traffic, capacity cuts in the Asia Pacific and North Atlantic market segments continue to slow, if only marginally. Asia Pacific capacity was down 5.9%, compared to 6.2% in the previous week, while North Atlantic capacity was down 7.0%, compared to 7.2% in the previous week.

European cross-border capacity showed the reverse trend, with capacity being reduced 5.3% by airlines, compared to 4.4% in Week 28.

Load factors retreat from year high peak

Load factors continue to hover above 80%, with average load factor for total scheduled traffic hitting 82.1% in Week 29.

Association of European Airlines' weekly passenger load factor by region:
First 29 weeks of 2009

Most load factors ticked back up slightly, with North Atlantic load factors the strongest, at 88.5%, not too far ahead of Asia Pacific load factors at 84.7%. European short-haul load factors were 77.2%.

Want More Analysis Like This?

CAPA Membership provides access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find Out More