European airlines to suffer world heaviest loss margin in 2021
According to IATA's Apr-2021 forecast of airline economic performance, European airlines will suffer the heaviest loss margin of all regions this year. This is due to their high dependence on international markets and the high levels of restrictions on international travel pervading in Europe.
For several months Europe has suffered the lowest levels of capacity compared with the last pre-crisis year, 2019. In the week of 26-Apr-2021, seat capacity in Europe is 72.5% below the equivalent week of 2019. The next weakest region is Africa, where capacity is down by 53.7% versus 2019; Middle East is down by 52.2%, Latin America by 45.0%, North America by 38.3%, and Asia Pacific by 30.6% in comparison with 2019.
Data from ACI Europe show that passenger numbers are even weaker than seat numbers. The gap has narrowed from 10-12ppts in 2020 to 5-8ppts in 2021, but this is of little comfort when capacity is so low.
IATA forecasts that RPKs in Europe will be 66.3% below 2019 this year – not even recovering to 50% in 2H2021. The trade body also forecasts an EBIT margin of -19% for European airlines this year, which is twice as bad as the global average.
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