European aviation: bottoming out, but no sharp rise likely

There are some signs that Europe's airline capacity may be close to bottoming out again. Weekly seats in the week of 1-Feb-2021 are down by 74.4% versus 2019, and the trend has been within a percentage point of this for three weeks.

However, new short term traffic scenarios from EUROCONTROL suggest that activity will remain low through 1Q2021 and only start to rise in Apr-2021 or May-2021.

Moreover, Europe's seat capacity continues to underperform the rest of the world this week. Middle East is down by 55.6%, Africa is down by 50.5%, North America by 47.8%, Asia Pacific by 44.7%, and Latin America by 42.1%.

EUROCONTROL's two scenarios both depict a flat bottom to the current cycle, with only a gentle rise in 2Q2021. Neither expects last summer's peak (reached in Aug-2020, when ATMs in Europe were -51% and seats were -55% versus 2019) before the end of 2Q2021 at the earliest.

Air traffic will improve once national travel restrictions start to ease. This has been delayed, but peak summer 2021 still offers the possibility of improvement over 2020.