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European aviation's recovery climbs to a new high at winter's onset

Analysis

Europe's capacity recovery has regained momentum in the first week of the winter season.

After 12 weeks at 33% to 35% below 2019 levels, total seat numbers in the week of 25-Oct-2021 are down by 24.6% versus the equivalent week of 2019. This is the highest percentage of 2019 capacity since pre-COVID.

Moreover, Europe is now up from fourth to third in the regional capacity recovery ranking. Below Europe are Asia Pacific, where seat capacity is down by 39.4%, the Middle East, down by 36.9%, and Africa, down by 27.4%. Latin America, down by 22.8%; and North America, down by 14.3%, are ahead of Europe in the capacity recovery.

The most recent ACI Europe preliminary airport passenger data indicate that traffic was 35% below 2019 levels in the week of 17-Oct-2021, when capacity was down 33%. This was before this week's upward step in the capacity trend, and followed several weeks when passenger traffic was approximately 39% below 2019.

The 2ppt gap is the narrowest since pre-pandemic and a positive indicator for airline load factors (but likely at the expense of yield).

Summary

  • Europe has 22.5 million seats this week, down 25%, vs 29.8 million in the same week of 2019. Europe is now third behind N. America and LatAm.
  • Europe's 4Q2021 capacity projection has more or less stabilised at 73% of 2019 levels, up from 64% in 3Q2021.
  • Passenger traffic narrowed the gap to the capacity trend to just 2ppts in the week commencing 17-Oct-2021.
  • The north-south divide in Europe's traffic recovery remains, with Southern Europe stronger, while non-EU Eastern Europe is the strongest region.

Europe has 22.5 million seats vs 29.8 million in 2019, down 25%

In the week commencing 25-Oct-2021 total European seat capacity is scheduled to be 22.5 million, according to OAG schedules and CAPA seat configurations.

This is 24.6% below the 29.8 million seats of the equivalent week of 2019. This is 8.8ppts better than last week's -33.3% and the closest to 2019 capacity levels since before the COVID-19 crisis.

This finally lifts the trend out of the range of -34.7% to -32.7%, where it had been stuck for 12 consecutive weeks.

The week of 25-Oct-2021 marks the start of the winter 2021/2022 season. Typically capacity falls week-on-week in absolute terms (it fell by 9% week-on-week in the equivalent week of 2019). However, this year, it has increased by 2%.

This week's total seat capacity for Europe is split between 6.5 million domestic seats, versus 7.3 million in the equivalent week of 2019; and 15.9 million international seats, versus 22.5 million.

Europe's domestic seats are down by 10.4% versus 2019, compared with last week's -15.1%. Domestic capacity as a percentage of 2019 levels is not yet back to its early Aug-2021 peak of -6.3%

International seat capacity is down by 29.2% versus 2019. This compares with last week's -38.8% and is the highest percentage of 2019 levels that international capacity has reached since before the crisis.

Europe: percentage change in weekly airline seat capacity vs equivalent week of 2019, 06-Jan-2020 to 25-Oct-2021

Europe jumps up to third among world regions by capacity as percentage of 2019 capacity

Europe has jumped from fourth to third place in the ranking of regions measured by seats as a percentage of 2019 levels.

Asia Pacific remains at the bottom as the worst-performing region, with capacity down by 39.4% versus 2019 this week. Next worst is the Middle East, where seat count is down by 36.9%

Africa's seat count is down by 27.4%, Latin America's by 22.8%, and North America's by 14.3%. North America is the closest any region has been to 2019 levels of capacity since before the crisis.

Europe, North America and Africa have taken upward steps in the trend this week, whereas Asia Pacific and Latin America have taken downward steps. Middle East is broadly flat on last week.

Percentage change in passenger seat capacity vs 2019 by region, week of 30-Mar-2020 to week of 25-Oct-2021

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Europe's 4Q2021 capacity projection is almost unchanged, at 73% of 2019 levels…

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

Schedules filed for 4Q2021 project a further upward step to 73% of 4Q2019 levels. Rounded to the nearest whole number, this has been at 73% for four weeks now (it was 73.3% four weeks ago and is 72.5% now).

By contrast, during the first four weeks of 3Q2021 capacity projections for that quarter slipped from 72% to 69% (and the final outcome was 64%).

Annual 2021 seat capacity for Europe is projected to be 51% of 2019 levels – only 9ppts better than the outturn of 42% of 2019 seats for 2020.

Passenger traffic has narrowed the gap to the capacity trend

Europe's passenger numbers have been at lower percentages of 2019 levels than capacity has throughout the pandemic, but the gap has narrowed considerably.

According to preliminary data from ACI Europe covering 86% of European passenger traffic, passenger numbers were down by 35% versus 2019 in the week commencing 17-Oct-2021. This is the most recent week for which the passenger data are available, so just before the start of the winter season.

This was 1ppt better than in the previous week and only 2ppts below the seat trend in the week of 17-Oct-2021.

This is the closest that the passenger trend has been to the capacity trend in any week since before the coronavirus pandemic.

The average gap between the two curves was 7ppts in 1Q2021, widening to 9ppts in 2Q2021. However, the average gap narrowed to 6ppts in 3Q2021 and only 4ppts in the most recent four weeks.

Europe: percentage change in weekly seat capacity and passenger numbers vs 2019 levels, weeks commencing 01-Mar-2020 to 24-Oct-2021 

Europe's north-south divide remains…

The broad split between northern and southern Europe in the rate of recovery of passenger traffic remains, with traffic in the south of the continent recovering to higher percentages of 2019 levels.

Almost all major nations and regions took upward steps in the passenger trend in the week of 17-Oct-2021 compared with four weeks earlier (week of 19-Sep-2021).

UK airport passenger traffic was down by 49% in the week of 17-Oct-2021 compared with the equivalent week of 2019. This was the worst of any major market in Europe, but a strong step up from -59% in the week of 19-Sep-2021.

In Eastern EU member states traffic was 45% below 2019, compared with -46% four weeks earlier.

In Germany passenger traffic was down by 43%, compared with -50% four weeks earlier, and in France it was 41% below 2019, slightly worse than -40% four weeks earlier.

The Nordic and Baltic region was down 38%, which was a good improvement from -46% two weeks earlier. In the EU/EEA/Switzerland/UK combined region there was an improvement to -37% from -43% four weeks earlier.

Italy passenger traffic was down by 37% versus 2019's – the best rate among Western Europe's large nations and slightly up from -38% four weeks earlier.

In Benelux it improved to -35% in the week of 17-Oct-2021, in line with the average for all of Europe and a step up from -41% in the week of 19-Sep-2021.

The Southern Europe region was enjoying a stronger traffic recovery, with passenger numbers 28% below 2019 levels in the week of 17-Oct-2021. This compared with -32% two weeks earlier.

…and is still strongest in non-EU Eastern Europe

Again, the recovery in airport passenger numbers as a percentage of pre-pandemic levels is strongest outside the EU/EEA/Switzerland/UK, i.e. in the nations of Eastern Europe, where those numbers were only 23% below 2019's in the week of 17-Oct-2021.

This was a small step up from -25% in the week of 19-Sep-2021.

European airport passenger traffic: percentage change from 2019, week of 19-Sep-2021 and week of 17-Oct-2021

European aviation's recovery is at the highest point so far

Europe's airlines are now displaying more confidence in their schedules than at any time since before the pandemic.

In the first week of the winter schedule seat numbers are now 75% of their level in the equivalent week of 2019 – the highest percentage so far in the recovery.

Moreover, the firmness of the 4Q2021 schedule contrasts with the almost continuous slides at the equivalent stage of previous quarters during the pandemic.

The upward step last week (week of 18-Oct-2021) in passenger numbers to 65% as a percentage of 2019 levels when capacity was at 67%, even before the start of the winter schedule, is also cheering for European aviation as the weather starts to chill.

This may reflect price stimulation in the market – LCCs continue to lead the recovery – but it is important to encourage passengers back in the air.

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