Europe aviation: capacity outlook plateaus, but forward bookings fall
Europe's seat capacity recovery as a percentage of 2019 levels remains in the narrow range of 86%-87% that it has occupied almost every week since late May-2022.
Seat numbers in Europe are at 86.4% in the week commencing 3-Oct-2022, which is a shortfall of 13.6% against the equivalent week in 2019.
Europe remains fifth in the regional ranking, above Asia Pacific, where capacity is down by 28.7% versus 2019, but below the Middle East, where capacity is down by 12.9%. North America capacity is down by 7.6%, Africa by 6.9%, and Latin America is down by 2.0%.
Projections derived from schedules for Europe in 4Q2022 are at 87%, which is the same as was achieved in 3Q2022 after six successive quarters of an improving trend.
Moreover, as economic concerns grow, IATA data indicate that forward bookings for 4Q are lower than for 3Q at the equivalent stage.
- Europe has 29.7 million seats this week – down 14% vs 34.3 million in the same week of 2019. Europe is fourth in the regional ranking on this measure.
- Europe's 1Q2022 capacity was at 74% of 2019 levels, 2Q2022 at 84% and 3Q2022 at 87%, the same level as projected for 4Q2022.
- 4Q2022 forward bookings are lower than for 3Q2022 at the same stage.
- Softening of forward bookings into 4Q2022 relative to 3Q2022 reflects weakening economic outlook in Europe, sparked by rising energy prices and concerns over energy supply shortages.
- Forward booking patterns are not as reliable an indicator as they once were, because the COVID-19 pandemic has led to an increase in last-minute bookings.
Europe has 29.7 million seats vs 34.3 million this week in 2019 – down 14%
In the week commencing 3-Oct-2022, total European seat capacity is scheduled to be 29.7 million, according to OAG schedules and CAPA seat configurations.
This is 13.6% below the 34.3 million seats of the equivalent week of 2019, and an improvement of just 0.5ppts from last week's -14.1%.
This modestly reverses the previous five weeks of small declines after reaching a pandemic era peak of -11.4% in late Aug-2022. It keeps Europe's recovery broadly in the same range it has occupied since late May-2022.
This week's total seat capacity for Europe is split between 7.2 million domestic seats, versus 7.8 million in the equivalent week of 2019; and 22.4 million international seats, versus 26.5 million.
Europe's domestic seats are down by 7.1% versus 2019, compared with last week's -7.7%.
International seat capacity is down by 15.5% versus 2019, compared with last week's -16.0%.
Europe: percentage change in weekly airline seat capacity vs equivalent week of 2019, weeks of 06-Jan-2020 to 03-Oct-2022
Europe remains fifth in the regional ranking by capacity as percentage of 2019's
Europe stays in fifth place in the ranking of regions measured by seats as a percentage of 2019 levels this week.
North America is broadly level on last week.
Percentage change in passenger seat capacity vs 2019 by region, week of 30-Mar-2020 to week of 3-Oct-2022
Europe's 4Q2022 capacity is projected at 87% of 2019 levels (the same as 3Q2022)
It was 27% in 1Q2021, 34% in 2Q2021, 64% in 3Q2021, and 71% in 4Q2021.
The improvement is continuing in 2022 so far: capacity for 1Q2022 was 74% of 1Q2019 levels, while 2Q2022 was at 84% and 3Q2022 was at 87%.
Looking ahead to 4Q2022, the projection is 87.0% – virtually unchanged from 86.9% last week.
The 87% projection for 4Q2022 is the same as the outturn for 3Q2022, suggesting no further quarter-on-quarter improvement in the recovery measured by capacity as a percentage of 2019 levels.
As noted in previous CAPA analysis, 4Q2022 could end up at a materially higher percentage of 2019 capacity than 3Q2022, but it could also fall slightly. Either way, 4Q is unlikely to differ from 3Q by more than a low single digit number of percentage points.
See related CAPA report: Europe aviation: schedules are firmer, but capacity recovery slows
4Q2022 forward bookings are lower than 3Q2022 at the same stage…
Nevertheless, data from IATA on bookings for European airlines indicate that forward bookings for each month of 4Q2022, as at 20-Sep-2022, were lower than they were for 3Q2022 at the equivalent stage (i.e. at 20-Jun-2022).
The chart below, reproduced from IATA, shows that bookings for 3Q2022 were 76% of their 2019 level 10 days before the start of the quarter, and bookings for each month were lower as a percentage than for the preceding month.
The forward booking pattern for 4Q2022 10 days before the start of the quarter also showed a falling trend across each month of the quarter.
Moreover, each month of 4Q2022 was at a lower percentage of 2019 bookings than the equivalent month of 3Q2022.
So, while Jul-2022 was at 76%, Oct-2022 was at 71%; Aug-2022 was at 71%, but Nov-2022 was at 67%; and Sep-2022 was at 67%, but Dec-2022 was at 66%.
Europe: forward bookings* for each month of the quarter ahead (percentage of 2019 level)
…reflecting a weakening economic outlook
Forward booking patterns are not as reliable an indicator as they once were, because the COVID-19 pandemic has led to an increase in last-minute bookings.
Just because forward bookings for 4Q2022 just before the start of the quarter were below those for 3Q2022 at the equivalent stage, it does not necessarily follow that total traffic flown will fall as a percentage of 2019 levels.
Nevertheless, this is a very feasible possibility.
This softening of forward bookings into 4Q2022 relative to 3Q2022 reflects the weakening economic outlook in Europe, sparked by rising energy prices and concerns over energy supply shortages.
If close-in bookings do not make up the shortfall, schedules for 4Q may indeed be trimmed.