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Europe's aviation recovery continues to be LCC-led

Premium Analysis

Total seat numbers for Europe in the week of 1-Nov-2021 are down by 26.2% versus 2019 levels. This is a little below last week's -24.6%, but only two weeks ago (week commencing 18-Oct-2021) capacity was in its 12th week of being down by 33% to 35%.

Europe has slipped back to fourth in the regional capacity recovery ranking.

Below Europe are Asia Pacific, where capacity is down by 39.9%, the Middle East, down by 34.6%. Ahead of Europe are Africa, down by 24.0%; Latin America, down by 18.0%; and North America, down by 15.3%.

Capacity projections for 4Q2021 in Europe derived from schedules filed with OAG point to 72% of 4Q2019 seat numbers. This has come down by only 1ppt over the past month, indicating growing confidence among Europe's airlines.

Early 3Q2021 results show LCCs are still leading the recovery. Air-France KLM's network airlines only broke even, whereas its LCC Transavia made a 20% operating margin. Ryanair's margin was 14%, as it achieved strong load factor at the expense of weak yields to stimulate demand and grow share. On intra-Europe routes LCC capacity is back to 87% of 2019 levels, versus 79% for all operators.

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