15-Jun-2022 4:15 PM

Europe's airline capacity recovery takes a breather; load factor to benefit

Analysis

Europe's capacity recovery is taking another pause for breath.

After reaching a pandemic-era high of 87.5% of 2019 levels two weeks ago at the beginning of Jun-2022, Europe's seat capacity has slipped back to 85.7% in the week commencing 13-Jun-2022, or a shortfall of -14.3% against the equivalent week 2019.

Europe remains fourth in the regional ranking, above Asia Pacific, where capacity is down by -26.7%, and the Middle East, where capacity is down by -20.6%. Africa capacity is down by -13.2%, North America is down by -9.4%, and Latin America by -8.6%.

Monthly passenger load factors reported by IATA as at Apr-2022 were closer to levels achieved in the equivalent month of 2019 levels than at any time since before the pandemic.

Flight cancellations, albeit at lower rates than headlines imply, are likely to keep capacity from making a further jump as a percentage of 2019 levels for now, but may give further impetus to load factors.

Summary

Europe's seat capacity has slipped back to 85.7% of 2019 levels, a shortfall of -14.3%.
Europe remains fourth in the regional ranking, with capacity higher than Asia Pacific, the Middle East, Africa, North America, and Latin America.
Europe's capacity projections for 2Q2022 and 3Q2022 are at 84% and 90% of 2019 levels, respectively.
Passenger load factors are closing in on 2019 levels, with April 2022 load factors being the closest to pre-pandemic levels.
Flight cancellations, although at lower rates, may further boost load factors.
Staffing problems are likely to keep capacity from making significant jumps, but load factors are expected to increase.

Summary

Europe has 30.8 million seats this week, which is down -14% vs 36.0 million in the same week of 2019.
Europe is fourth in the regional ranking on this measure.
Europe's 1Q2022 capacity was at 74% of 2019 levels; 2Q2022 is projected at 84% and 3Q2022 at 90%.
Passenger load factors are closing in on 2019 levels and should receive a further modest boost from flight cancellations.

Europe has 30.8 million seats vs 36.0 million this week in 2019, down 14%

In the week commencing 13-Jun-2022, total European seat capacity is scheduled to be 30.8 million, according to OAG schedules and CAPA seat configurations.

This is -14.3% below the 36.0 million seats of the equivalent week of 2019, an improvement of just 0.1ppts from last week's -14.4%, but 1.8 ppts below the previous week's -12.5%, which had been Europe's strongest week on this measure since before the COVID-19 pandemic.

This week's total seat capacity for Europe is split between 7.7 million domestic seats, versus 8.3 million in the equivalent week of 2019; and 23.1 million international seats, versus 27.6 million.

Europe's domestic seats are down -7.7% versus 2019, compared with last week's -7.9%.

International seat capacity is down -16.2% versus 2019, compared with last week's -16.3%.

Europe: percentage change in weekly airline seat capacity vs equivalent week of 2019, weeks of 06-Jan-20 to 06-Jun-2022

Europe remains fourth in the regional ranking by capacity as percentage of 2019

Europe remains in fourth place in the ranking of regions measured by seats as a percentage of 2019 levels this week.

With capacity down -14.3%, Europe is 12.4ppts better than sixth placed Asia Pacific, where capacity is down -26.7%, and 6.4ppts above the Middle East, where seat count is down -20.6%.

Capacity is down -13.2% in Africa, -9.4% in North America, and -8.6% in Latin America.

Asia Pacific and the Middle East have taken upward steps in the trend this week, whereas Latin America and North America have taken downward steps.

Europe and Africa are broadly flat on last week.

Percentage change in passenger seat capacity vs 2019 by region, week of 30-Mar-2020 to week of 13-Jun-2022

Europe's 2Q2022 capacity is projected at 84% of 2019 levels and 3Q2022 at 90%

According to data from OAG and CAPA, Europe's capacity as a percentage of 2019 levels improved with each successive quarter of 2021.

It was 27% in 1Q2021, 34% in 2Q2021, 64% in 3Q2021 and 71% in 4Q2021.

Capacity for 1Q2022 was 74% of 1Q2019 levels. Capacity for 2Q2022 is currently projected at 84.4% of 2Q2019 levels, a very modest trim of 0.1ppts from last week's projection, with only one full week left in the quarter.

Projections for 3Q2022 are at 89.9% of 3Q2019 seat numbers, down by 0.4ppts from last week. This projection has been fairly stable over the past few weeks, although it continues to be trimmed.

Passenger load factors are closing in on 2019 levels

Previous CAPA analysis comparing seat capacity data with airport passenger numbers across Europe from ACI Europe has shown that traffic continues to recover towards 2019 levels at a slower rate than seat numbers.

Nevertheless, the gap has been closing, implying that load factors must be improving.

Recent IATA analysis confirms that global passenger load factors in Apr-2022 - the most recent month for which data are available - were closer to their 2019 levels than in any month since before the coronavirus pandemic.

The global load factor of 77.8% in Apr-2019 was 94% of the level of Apr-2019, or a shortfall of 5.3ppts. The domestic load factor of 80.1% was only 3.7ppts below its Apr-2019 level, but the gap between domestic load factor and international load factor as percentages of their 2019 levels has closed over recent months.

Europe's load factor of 79.5% in Apr-2022 was the third highest among world regions, behind North America's 85.8% and Latin America's 80.9%.

Europe was 5.7ppts below its Apr-2019 load factor (compared with a gap of 10.0ppts in Mar-2022 versus Mar-2019), while North America was 1.0ppts above and Latin American was only 1.2ppts behind its Apr-2019 level.

Flight cancellations will further boost load factor

Since the Apr-2022 traffic figures from IATA, a number of European countries have experienced an increase in the number of flight cancellations, particularly in late May-2022 and into early Jun-2022. However, only a relatively small proportion of flights have been cancelled.

According to OAG, cancellations peaked at 4% of flights in the UK on 4-Jun-2022, at 1.2% in Spain on 5-Jun-2022 and a much more significant 11% in the Netherlands on 4-Jun-2022. These peaks compare with rates across the whole of May-2022 of 1.1% in the UK, 0.2% in Spain, 0.6% in France and under 2% in the Netherlands.

Cancellations were concentrated on regional and short haul flights, rather than long haul services. This means that the percentage of passengers affected has been lower than the percentage of flights.

As noted previously by CAPA, headlines in the UK have exaggerated the scale of flight cancellations. Airline schedules have recovered towards 2019 levels more quickly than airlines' ability to staff and operate those schedules, but only slightly.

One consequence of cancellations is that passengers are rebooked onto alternative flights.

European aviation's capacity recovery seems likely to continue to level off until staffing problems are solved, but that should lead to further increases in reported load factor.