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Europe's aviation recovery absorbs Omicron and war

Analysis

European aviation is demonstrating its resilience. The continent's capacity recovery has more or less absorbed both the Omicron variant of the coronavirus and the war in Ukraine. Although passenger traffic recovery has lagged capacity recovery, there is also evidence of resilience in booking trends.

Europe's seat capacity is down by 20.3% versus 2019 in the week of 11-Apr-2022. This is 0.5ppts worse than last week and 3.0ppts worse than two weeks ago, but almost back to its level before the Omicron wave and the Russian invasion of Ukraine.

Europe is fourth in the regional ranking, above Asia Pacific, where capacity is down by 36.0%, and Middle East, where capacity is down by 21.0%. Africa capacity is down by 14.8%, North America by 11.3%, and Latin America by 8.3%.

Summary

  • Europe has 25.2 million seats this week – down 20% vs 31.6 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, and 2Q2022 is projected at 87%.
  • Europe's capacity recovery has more or less absorbed Omicron and war, although passenger traffic recovery has lagged capacity recovery.

Europe has 25.2 million seats vs 31.6 million this week in 2019 – down 20%

In the week commencing 11-Apr-2022, total European seat capacity is scheduled to be 25.2 million, according to OAG schedules and CAPA seat configurations.

This is 20.3% below the 31.6 million seats of the equivalent week of 2019. This is 0.5ppts below last week and 3.0ppts below two weeks ago, when capacity was down by 17.2% compared with the equivalent week of 2019. That had been its highest level since before the COVID-19 pandemic.

In spite of two weeks of modest declines, Europe is still close to its pre-Omicron level (it reached -18.7% in the final week of Dec-2022).

This week's total seat capacity for Europe is split between 6.1 million domestic seats, versus 7.5 million in the equivalent week of 2019; and 19.1 million international seats, versus 24.1 million.

The modest decline in total capacity as a percentage of 2019 levels this week has been driven by domestic markets. Europe's domestic seats are down by 18.3% versus 2019, which is a deterioration from last week's -15.6%.

International seat capacity is down by 20.9% versus 2019, which is a small improvement on last week's -21.1%.

Europe: percentage change in weekly airline seat capacity vs equivalent week of 2019, weeks of 06-Jan-2020 to 11-Apr-2022

 

Europe is fourth in the regional ranking by capacity as percentage of 2019's

Europe is fourth in the ranking of regions measured by seats as a percentage of 2019 levels this week, above Asia Pacific and Middle East.

With capacity down by 20.3%, Europe is 15.7ppts better than Asia Pacific, where capacity is down by 36.0%, but only 0.7ppts ahead of the Middle East, where seat count is down by 21.0%. Capacity is down by 14.8% in Africa, by 11.3% in North America, and by 8.3% in Latin America.

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

The 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 11-Apr-2022

 

Europe's 2Q2022 capacity is projected at 87% of 2019 levels, up from 74% in 1Q2022

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, 20% in 2Q2021, 64% in 3Q2021 and 71% in 4Q2021. Capacity for 1Q2022 was 74% of 1Q2019 levels.

Capacity for 2Q2022 is currently projected at 87.0% of 1Q2019 levels, which is only a modest downward revision from 87.7% a week ago. Even if there are further cuts as the quarter progresses, 2Q should represent another upward step in Europe's capacity recovery.

Europe's capacity recovery has more or less absorbed Omicron and war

As noted earlier in this report, Europe's seat capacity as a percentage of 2019 levels is almost back to its pre-Omicron levels.

In the final week of Dec-2021 capacity reached 81% of the equivalent week of 2019, before the Omicron wave pushed it down to 59% in the final week of Jan-2022. It then recovered to 82% in the final week of Feb-2022, when the Russian invasion of Ukraine interrupted the rising trend.

Nevertheless, the curve did not drop, but more or less flattened before jumping to 83% in the final week of Mar-2022.

This jump coincided with the start of the summer season and was probably a little overoptimistic, particularly in view of the labour shortages suffered by airlines whose staff reported positive COVID tests as capacity grew.

The subsequent easing back of capacity as a percentage of 2019 levels to 80% this week probably represents some fine tuning rather than a significant interruption in the capacity recovery trend in Europe – as demonstrated by the projected 87% for 2Q2022.

Passenger traffic recovery has lagged capacity recovery

Of course, capacity data are not the same as demand data.

Throughout the coronavirus pandemic the trend in passenger numbers has consistently fallen short of seat numbers when expressed as a percentage of the equivalent period of 2019.

Weekly passenger data for Europe's airports were reported by ACI Europe from early in the pandemic until late Oct-2021. Since then, only monthly passenger numbers are available – the most recent being for Feb-2022.

Passenger numbers were 61% of Feb-2019 in Feb-2022, back to Dec-2021 levels and a recovery from 54% in Jan-2022. Feb-2022 passenger numbers were at 61%, compared with average weekly seat capacity at 67%.

Europe: percentage change in weekly seat capacity and passenger numbers vs 2019 level, weeks of 01-Mar-2020 to 10-Apr-2022

 

The subsequent increase in seats to an average of 74% in Mar-2022 suggests that passenger numbers should also have resumed their recovery in Mar-2022, although the Russian invasion of Ukraine may have widened the gap between the two curves – even if only on a short term basis.

Data from IATA on global ticket sales to 29-Mar-2022 indicate that international bookings for future travel at any point in time fell as a percentage of 2019 levels in early Mar-2019, but soon recovered and modestly exceeded their late Feb-2022 levels in the second half of Mar-2022.

Passenger ticket sales: percentage change from 2019, seven day moving average, ticket sale Jan-2021 to Mar-2022

 

European aviation is showing its resilience

European aviation's recovery from the COVID-19 pandemic was certainly buffeted by the Omicron wave and the effect on demand of the Russian invasion of Ukraine.

The future remains, as ever, unpredictable. There will be new challenges, including those that are not foreseen.

Nevertheless, the resumption of the recovery trend demonstrates aviation's resilience.

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