European aviation continues to stall – COVID testing urgently needed
It is a sure sign that things are desperate when Europe's airlines, pilot unions and airports all agree.
EasyJet CEO Johan Lundgren says "Aviation continues to face the most severe threat in its history".
British Airline Pilots' Association general secretary Brian Strutton believes "UK aviation is in a death spiral".
After reaching peak recovery in Aug-2020, Europe is now eight weeks into deepening year-on-year capacity cuts. Seat numbers are down -62.2% in the week commencing 12-Oct-2020. Only Middle East has a deeper cut, with -63.2%; Africa is -59.1%, Latin America -56.7%, North America -51.6%, and Asia Pacific is -39.0%.
The European aviation industry urgently needs standardised, consistent COVID-19 testing to replace the web of quarantine restrictions that are choking it.
- Europe: 12.7 million seats, -62%, vs 33.6 million a year ago. Europe is the second weakest region by comparison with its 2019 capacity level.
- Oct-2020 capacity is set to fall more deeply than Sep-2020, and scheduled winter 2020/2021 capacity is ebbing away. Traffic is doing worse than capacity.
- Rising COVID-19 cases and quarantines are reversing Europe's aviation recovery
Europe: 12.7 million seats vs 33.6 million a year ago – down 62%
Total European seat capacity is scheduled to be 12.7 million in the week of 12-Oct-2020, according to schedules from OAG combined with CAPA Fleet Database seat configurations.
This is a 2.2% decrease week-on-week and 62.2% below the 33.6 million seats of the equivalent week a year ago.
This week's total is split between 4.9 million domestic seats, versus 7.8 million last year; and 7.7 million international seats, versus 25.9 million.
Europe's domestic seats are down by 35.8% year-on-year, compared with last week's -35.4%. This was the eighth successive downward step, but still the 16th week running with domestic capacity at more than 50% of 2019's.
International seats are down by 70.0%, compared with last week's -69.2%.
Both international and domestic capacity fell week-on-week, for the seventh week in a row. Domestic seat numbers fell by 1.0% and international capacity dropped by 2.9% week-on-week.
The 62.2% year-on-year cut in total seats this week is the 30th week of very heavy double digit percentage (more than 50%) declines in seats.
It is 0.7ppts wider than last week's 60.1% drop, extending the run of deepening year-on-year percentage cuts to eight weeks, after 12 previous weeks of narrowing.
Europe: year-on-year percentage change in airline seat capacity, 1H&2H2019 and weekly in 2020
Only Middle East has a deeper year-on-year capacity cut than Europe
After many weeks with the third narrowest year-on-year cut in seat numbers, Europe slumped to fifth out of the six regions last week and retains that position this week.
Asia Pacific has now had 14 consecutive weeks at more than 50% of 2019's capacity (and still the only region above this threshold).
Percentage change in passenger seat capacity by region, week of 12-Oct-2020 vs 14-Oct-2019
Europe, Middle East and Asia Pacific widened their year-on-year capacity declines this week
Year-on-year percentage change in passenger seat capacity by region, week of 30-Mar-2020 to week of 12-Oct-2020
Oct-2020 capacity is set to fall more deeply than Sep-2020
For 3Q2020 – normally the peak quarter of the year – European seat numbers derived from schedules filed with OAG were 61% below the same quarter of 2019, i.e. at 39% of last year's level.
Jul-2020 was down by 68%. This recovered to a 55% fall in Aug-2020, but slid back to a 59% fall in Sep-2020.
Projected Oct-2020 seat numbers are 3% lower than expected last week, and are now anticipated to be down by 61% year-on-year (compared with -60% projected last week). This is worse than Sep-2020.
Winter 2020/2021 capacity is ebbing away
There have been further cuts to the early part of winter schedule this week, but capacity is still projected at significantly above 50% of prior year levels – clearly unrealistic in view of current trends.
Capacity derived from OAG schedules for Nov-2020 is down by 7% compared with last week, but is projected to be at 56% of 2019 levels. Dec-2020 capacity has been lowered by 1% since last week, but is projected to be at 65% of 2019 levels.
Capacity for the first two months of 2021 has been lowered by 2% since last week, but is still scheduled to be at 72% of prior year seat numbers in Jan-2021, and at 74% in Feb-2021.
Europe: percentage change in airline seat capacity vs equivalent week of 2019, with outlook at different dates*
The process of cutting schedules for this winter still has some way to go.
But Air France-KLM is at the upper end of the capacity range (as a percentage of 2019 capacity) when compared with its main competitors.
Some of Europe's leading airline groups are planning 4Q2020 seat capacity at a lower percentage of 2019 levels than the 39% that was in the market in 3Q2020.
EasyJet operated 38% of its planned capacity during calendar 3Q2020, with services peaking in Aug-2020 and tapering significantly in Sep-2020. However, it now expects to operate at 25% of planned capacity in 4Q2020.
Lufthansa Group CEO Carsten Spohr has said he will be "happy if we can reach 20%" of 2019 capacity levels in winter 2020/2021 (Reuters, 06-Oct-2020).
Traffic is doing worse than capacity
As CAPA analysis reports have often noted, passenger numbers have been falling more rapidly than airline seat capacity.
Data from ACI Europe indicate that passenger numbers at Europe's airports fell by 72% year-on-year in the week commencing 27-Sep-2020, which compares with a 60% drop in seat numbers from OAG/CAPA data for the same week.
As with capacity, year-on-year growth in passenger numbers has deteriorated since mid Aug-2020.
Europe: year-on-year percentage change in weekly airline seat capacity and passenger numbers
Even Europe's two leading ultra-LCCs, which led the return of capacity after the near total shutdown of aviation in Apr/May/Jun-2020 and whose passenger growth rates are ahead of the market, are suffering from a reversal in momentum.
Ryanair's year-on-year fall in passenger numbers recovered to -69% in Jul-2020 and then -51% in Aug-2020, but fell back to -62% in Sep-2020.
For Wizz Air, passenger numbers were -53% in Jul-2020 and -41% in Aug-2020, but -59% in Sep-2020.
Rising COVID-19 cases and quarantines are reversing Europe's aviation recovery
The reversal in Europe's aviation capacity recovery since Aug-2020 is the result of rising COVID-19 case numbers across the continent, from 134,000 per week in early Jul-2020 to 694,000 in the week of 5-Oct-2020 (source: WHO), and an unpredictable, fragmented and inconsistent quarantine regime.
The aviation industry across Europe (as elsewhere) has been calling increasingly frequently – and with growing volume – for a COVID-19 testing regime to replace quarantine requirements, which act as a significant restraint on demand for air travel.
ICAO, IATA, ACI and many individual airlines have repeatedly called for government cooperation to remove quarantine restrictions and restart air travel, and take a systematic approach to COVID-19 testing.
This also requires an internationally agreed and recognised approach to testing passengers.
The World Economic Forum, with The Commons Project Foundation, has started a trial of a traveller-verified COVID-19 status, known as CommonPass. This aims to standardise methods for lab results and vaccination records to be certified, thereby enabling governments to set and verify their own health criteria for travellers.
Travellers test for COVID-19 prior to departure, upload the result to their phones, and demonstrate compliance with entry requirements at departure and destination airports.
Cathay Pacific and United Airlines are trialling the system in Oct-2020, with selected volunteers on flights between London, New York, Hong Kong and Singapore, with government authorities observing. United will start the trial on London Heathrow-New York Newark, while Cathay Pacific will start with Hong Kong-Singapore.
Other routes and airlines are expected to be added.
A consistent COVID-19 testing system is crucial for European aviation
The summer peak months failed to maintain the hoped-for recovery in aviation demand across Europe – a severe blow, given the usual importance of this period to the profitability of the continent's airlines.
The winter season is always more difficult, with a bright spot usually arriving around the Christmas holiday period.
However, as Ryanair Group CEO Michael O'Leary has said, "effective test and tracing" is vital to allow consumers to book with confidence for Christmas 2020, "otherwise that would be a write off as well".
A clear and consistent COVID-19 testing system for European aviation is a crucial pre-requisite if consumer confidence in air travel is to have any chance of recovery.