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Europe aviation: LCCs consolidate market share gains in the recovery

Analysis

Among Europe's top dozen airline groups by weekly seats there are five LCCs.

Ryanair is at the top of the list, which also includes easyJet, Wizz Air, Pegasus Airlines and Jet2.com. All but one of these five LCCs are operating more than 100% of what was their seat capacity in the equivalent week of 2019, while only one FSC group has risen above this threshold.

Europe's total seat capacity is at 87.2% in the week commencing 1-Aug-2022 – which is a shortfall of 12.8% against the equivalent week in 2019.

Europe has moved from fifth to fourth in the regional ranking, above Asia Pacific, where capacity is down -21.9% versus 2019 capacity, and the Middle East, where capacity is down -15.6%. 

Europe's capacity recovery as a percentage of 2019 levels remains on the plateau it has occupied since the last week of May-2022 – for LCCs and FSCs alike. Nevertheless, low cost airlines have made structural gains in seat share since before the COVID-19 pandemic.

Summary

  • Europe has 32.1 million seats this week, down -13% vs 36.8 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 and 2Q2022 at 84%. 3Q2022 is projected at 87% and 4Q2022 at 86%.
  • Ryanair is Europe's leading airline group by seats this week. Most leading LCCs are at more than 100% of 2019 capacity levels.
  • LCC recovery is helped by their focus on intra-Europe, where their seat share has increased since pre-pandemic.

Europe has 32.1 million seats vs 36.8 million this week in 2019, down -13%

In the week commencing 1-Aug-2022, total European seat capacity is scheduled to be 32.1 million, according to OAG schedules and CAPA seat configurations.

This is -12.8% on the 36.8 million seats of the equivalent week of 2019, which is an improvement of 0.5ppts from last week's -13.3%.

This is Europe's 11th successive week stuck in a narrow range between -12.5% and -14.4%.

Nevertheless, it is the second best figure since it reached -12.5% in late May-2022.

This week's total seat capacity for Europe is split between 7.5 million domestic seats, versus 7.8 million in the equivalent week of 2019; and 24.6 million international seats, versus 28.9 million.

Europe's domestic seats are down -4.1% versus 2019's, compared with last week's -5.4%. This is the strongest weekly performance for the domestic market since the start of the pandemic.

International seat capacity is down -15.1% versus 2019's, compared with last week's -15.5%.

Europe: percentage change in weekly airline seat capacity vs equivalent week of 2019, weeks of 06-Jan-2020 to 01-Aug-2022

 

Europe is now fourth in the regional ranking by capacity as percentage of 2019

Europe has moved up from fifth to fourth place in the ranking of regions measured by seats as a percentage of 2019 levels this week.

With capacity down -12.8%, Europe is 9.1ppts better than sixth-placed Asia Pacific, where capacity is down -21.9%, and 2.9ppts above the Middle East, where seat count is down -15.6%. Capacity is down -10.4% in North America, -10.2% in Africa, and -4.5% in Latin America.

Asia Pacific, Latin America and Europe have taken upward steps in the trend this week, whereas Africa and Middle East have taken downward steps.

North America is broadly stable on last week.

Percentage change in passenger seat capacity vs 2019 by region, week of 30-Mar-2020 to week of 01-Aug-2022

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Europe's 3Q2022 is projected at 87%; 4Q2022 is trimmed to 86%

According to data from OAG and CAPA, Europe's capacity as a percentage of 2019 levels improved with each successive quarter of 2021. It was 27% in 1Q2021, 34% in 2Q2021, 64% in 3Q2021 and 71% in 4Q2021.

Capacity for 1Q2022 was 74% of 1Q2019 levels and 2Q2022 was at 84% of 2Q2019 levels.

Projections for 3Q2022 are at 87.2% of 3Q2019 seat numbers – very slightly down from the 87.4% projected last week. The projection for Aug-2022 is stable at 87.0%, while Sep-2022 is trimmed from 88.6% to 87.8%.

Further trimming of Sep-2022 to bring it in line with the 86% to 87% range of the past 11 weeks seems likely.

Looking ahead to 4Q2022, the final quarter of the year is projected at 86.4%, compared with 87.1% projected last week.

Ryanair is Europe's leading airline group by seats

As has been the case for most of the COVID-19 pandemic recovery phase over the past 12 months or so, low cost airlines are leading the capacity recovery.

Ryanair is the biggest European airline group by weekly seat capacity in the week of 1-Aug-2022, with 3.9 million seats. This is 116% of its seat count in the equivalent week of 2019.

Lufthansa Group is number two by weekly capacity but it has only 81% of its 2019 capacity level this week, while third-ranked IAG is at only 85% (both of them below the Europe-wide level of 87%).

Fourth-placed Turkish Airlines and fifth-ranked Air France-KLM are the leading legacy groups measured by their weekly capacity as a percentage of the equivalent week of 2019: Turkish is on 110%, and Air France-KLM is on 93%.

Most leading LCCs are at more than 100% of 2019 capacity levels

In addition to the LCC Ryanair and FSC Turkish Airlines, the only other leading European airline groups that are operating more than 100% of 2019 capacity levels are all LCCs.

They are Wizz Air (131%), Pegasus Airlines (103%) and Jet2.com (113%).

EasyJet is the only leading LCC group not exceeding 100% of 2019 capacity levels, but at 90% it is above the overall European average (and ahead of Lufthansa Group and IAG).

Europe: top 10 airline groups by weekly seats, week of 01-Aug-2022

Rank

Name

Seats

Percentage of 2019*

1

Ryanair Holdings PLC

3,891,897

116%

2

Deutsche Lufthansa AG

3,386,436

81%

3

International Airlines Group (IAG)

2,780,891

85%

4

Turkish Airlines Group

2,333,168

110%

5

Air France-KLM S.A.

2,258,120

93%

6

EasyJet plc

2,032,039

90%

7

Wizz Air Group

1,219,791

131%

8

Aeroflot Group

1,136,586

77%

9

TUI Group

743,188

86%

10

Pegasus Airlines Group

713,259

103%

11

Norwegian Group

542,284

98%

12

Jet2.com

532,498

113%

 

All Europe

 

87%

LCC recovery is helped by their focus on intra-Europe

The faster recovery of LCC capacity compared with FSC capacity has been aided by the LCCs' focus on intra-Europe.

The intra-Europe market is ahead of the total Europe market, having reached 90% of 2019 capacity levels in the week of 1-Aug-2022, compared with 87% for the total market.

LCCs are collectively outperforming on intra-Europe routes, where they have been at 100% (or more) of 2019 levels since early May-2022. LCCs are at 102% on intra-Europe routes in the week of 1-Aug-2022.

Intra-Europe: weekly seats as a percentage of the equivalent week of 2019 for LCCs vs total intra-Europe, 30-Dec-2019 to 25-Jul-2022

 

…where LCC seat share has increased since pre-pandemic

As a result of their stronger recovery, LCCs have grown their seat share on intra-Europe routes since before the coronavirus pandemic.

Intra-Europe: weekly seat share for LCCs, 31-Dec-2018 to 31-Jul-2022

 

LCC seat share of 47% on intra-Europe in the week of 1-Aug-2022 compares with 42% in the equivalent week of 2019.

LCC share in 2022 year to date is 47%, compared with just short of 42% in the equivalent period of 2019 (and also for 2019 as a whole).

Weekly data can be volatile, but it seems that LCC share on intra-European routes is now structurally higher.

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