Outlook 2024: Europe back to normal, but yields are softening and economic outlook far from robust

Data from OAG and CAPA - Centre for Aviation project that Europe's aviation market will still not be back to 2019 capacity levels in 1Q2024.

Nevertheless, International Air Transport Association (IATA) expects capacity to rise above its 2019 threshold for 2024 as a full year.

Intercontinental capacity to/from Europe is scheduled to be above 2019 levels as early as 1Q2024. Intra-Europe is set to remain more sluggish, as substitution by rail and online communications continues to take hold. In spite of this, the ultra-low cost airline groups Wizz Air, Ryanair and Pegasus Airlines - whose focus is intra-European - are already comfortably ahead of their 2019 capacity.

The strong yield environment that has boosted profitability for many European airlines in 2023 is softening, and the economic outlook is far from robust.

Against this backdrop, the ultra-LCCs are likely to continue to lead the capacity recovery in 2024.