Europe's airline capacity slides back towards lowest since Apr-2020
Expressed as a percentage of 2019 levels, Europe's airline seat capacity is sliding back towards its lowest levels since the first lockdown in Apr-2020.
In the week of 19-Apr-2021, seat capacity in Europe is 73.6% below the equivalent week of 2019 and not far from the -75% region it occupied for much of Feb-2021 and Mar-2021, before staging a very modest recovery.
For more than six months Europe has been far below other regions on this measure. Africa capacity is down by 54.5% versus 2019, Middle East by 52.3%, Latin America by 48.3%, North America by 38.0%, and Asia Pacific by 31.0%.
Data from the CAPA Fleet Database show that Europe also lags the rest of the world on the share of its aircraft that are in service. As at 19-Apr-2021, 61% of European operators' passenger jets are in service, versus a global average of 72%.
Europe's LCCs and legacy airlines currently have a similar percentage in service, but LCCs have varied this percentage more throughout the crisis. The leading European LCCs have better liquidity and lower costs and are generally more adaptable to demand fluctuations.
Summary
- Europe has 8.5 million seats vs 32.3 million in the same week of 2019, down 74%. Europe continues to underperform against other regions.
- Europe's active passenger jet fleet has increased during 2021 so far, but is still below the world average as a percentage of total fleet.
- Europe's LCCs have a similar percentage of jets in service to legacy airlines, but have varied this more throughout the crisis.
Europe has 8.5 million seats vs 32.3 million in 2019 - down 74%
In the week commencing 19-Apr-2021, total European seat capacity is scheduled to be 8.5 million, according to OAG schedules and CAPA seat configurations.
This is 73.6% below the 32.3 million seats of the equivalent week of 2019, 1.9ppts worse than the 71.7% fall a week ago in the week of 12-Apr-2021, and 3.0ppts down on the week of 5-Apr-2021. It is the 57th week of very heavy double digit percentage (more than 50%) declines in seats versus 2019.
Apart from the period from late Jan-2021 to late Mar-2021, when capacity was down by approximately 75%, current capacity is at the lowest percentage of 2019 levels since the first lockdowns in Apr-2020.
This week's total seat capacity for Europe is split between 3.8 million domestic seats, versus 7.6 million in the equivalent week of 2019; and 4.7 million international seats, versus 24.8 million.
Europe's domestic seats are down by 49.5% versus 2019, compared with last week's -45.5%.
International seat capacity is down by 81.0% versus 2019, compared with last week's -79.4%.
Europe: percentage change in weekly airline seat capacity vs equivalent week of 2019
Europe continues to underperform against other regions
Europe's 73.6% cut in seat numbers is 19.1ppts adrift of the next deepest, Africa, which is down by 54.5% from 2019 seat capacity this week.
The Middle East's seat count is down by 52.3%, Latin America's by 48.3%, North America's by 38.0%, and Asia Pacific's by 31.0%.
All regions have taken downward steps in the trend of seats versus 2019 levels this week.
Asia Pacific was the first region to rise above the -30% threshold two weeks ago, but has slipped below it again this week.
Percentage change in passenger seat capacity vs 2019 by region, week of 30-Mar-2020 to week of 19-Apr-2021
Summer 2021 schedules: cuts to May-2021 and Jun-2021 schedules have accelerated
Based on airline schedules filed with OAG and CAPA seat configuration data, capacity in Europe for 2Q2021 is now projected to be down by 55% from 2019 levels. This is a further drop from the 52% decline projected a week ago, but still less than the 1Q2021 fall of 73%.
Apr-2021 capacity has been cut by 2% since the week of 12-Apr-2021 and is now projected at 28% of 2019 capacity.
Cuts to May-2021 and Jun-2021 schedules have accelerated.
May-2021 is down by 13% since the week of 12-Apr-2021 and is projected at 42% of 2019 capacity. Jun-2021 is down by 5% since the week of 12-Apr-2021 and is projected at 66% of 2019 capacity.
Jul-2021 and Aug-2021 schedules remain very high, in spite of modest cuts
After two weeks of increases in projected capacity for Jul-2021 and Aug-2021, both months have been cut modestly this week. Nevertheless, Jul-2021 is still projected at 78% of 2019 seat numbers and Aug-2021 is at 79%.
Europe: percentage change in weekly airline seat capacity vs equivalent week of 2019, with outlook at different dates*
Europe's active passenger jet fleet has increased during 2021 so far…
According to the CAPA Fleet Database, the number of passenger jets in service with Europe's airlines at 19-Apr-2021 was 3,778.
This was an increase of 8.8% compared with the end of Jan-2021, but still 9.1% below the number at the end of Aug-2020, when the total had reached 4,155.
The Apr-2021 figure is 34.4% below the pre-pandemic number of 5,758 in service at the end of Jan-2020.
…but is still below the world average as a percentage of total fleet
As a percentage of the total number of passenger jets, the number in service in Europe continues to underperform against the world average, as it has throughout the crisis.
Passenger jets in service in Europe fell to 19% at the end of Apr-2020, compared with a global average of 38%. As at 19-Apr-2021, 61% are in service in Europe, while 72% of the worldwide fleet of passenger jets are in service.
Europe's figure has recovered from 56% at the end of Jan-2021, but is still below its end Aug-2020 peak of 67%. The world average is 55pts above its Aug-2020 level of 67%.
Percentage of passenger jets* in service at month end, Jan-2020 to Apr-2021**
Europe's LCCs have a similar percentage of jets in service to legacy airlines…
There is not much difference in Apr-2021 in the percentage of jets in service between Europe's LCCs and their legacy counterparts.
At 19-Apr-2021, 62% of LCC passenger jets are in service, versus 61% for legacy airlines, according to data from the CAPA Fleet Database.
…but have varied this percentage more throughout the crisis
LCCs cut back more heavily in the first lockdown at the end of Apr-2020, to just 10% (versus 23% for legacy airlines), but they recovered to 76% (63% for legacy airlines) at the end of Aug-2020.
Since then, the difference has not been great, but LCCs have increased and decreased the percentage of aircraft in service slightly more than legacy operators have.
Europe: percentage of passenger jets* in service at month end, Jan-2020 to Apr-2021**
LCCs are generally more adaptable to changes in demand
LCCs have generally been more ready to adapt to changes in demand conditions. However, even the LCCs have been continually frustrated by lack of progress towards the easing of travel restrictions.
Among the leading European LCCs, easyJet has consistently been the most cautious over capacity. In calendar 1Q2021 easyJet operated only 9% of 2019 seat capacity, after 18% in 4Q2020.
Wizz Air operated 27% of 2019 capacity in calendar 1Q2021, after 33% in 4Q2020. Ryanair operated 11% of 2019 capacity in calendar 1Q2021, after 31% in 4Q2020.
EasyJet said on 14-Apr-2021 that it was expecting to operate up to 20% of 2019 capacity in calendar 2Q2021, with an expectation that capacity levels would start to increase from late May onwards.
The other two have not said what their near term capacity plans are, but both ultra LCCs have sounded cautious recently. Ryanair has referred to a delayed traffic recovery into the peak summer 2021 season and Wizz Air has said that it expects only a gradual traffic recovery into late summer.
Essentially, nobody yet knows what the traffic recovery will look like, since European governments have yet to clarify their plans for the easing of restrictions on international travel.
Nevertheless, Wizz Air, Ryanair and easyJet have advantages over legacy airlines in the current environment.
First, they have strong balance sheets with significant levels of liquidity. This will help them to withstand ongoing uncertainty and delays to the recovery.
Second, they have low unit costs (particularly the ultra LCCs Wizz Air and Ryanair). This will help them to recover with greater capacity growth when the recovery materialises, since it is likely to be a recovery led by price sensitive market segments rather than by high yield business traffic.