North Atlantic aviation: immunised JVs dominate the recovery; LCCs growing but PLAY changes strategy
The market between Europe and North America continues to lead the long haul capacity recovery to/from Europe. North Atlantic seat numbers are scheduled to reach 106% of 2019 for 2024, compared with 102% for the overall Europe market.
There is only one European airline in the North Atlantic top five by seats in 2024 (British Airways, ranked behind United Airlines and Delta Air Lines, but above American Airlines and Air Canada).
European airlines still have more than half of seats in this route region, but their share has been eroded since 2019.
The antitrust immune joint ventures have lost some share in 2024 versus 2023, but have strengthened their position since 2019. Low cost share has diminished since 2019, with the withdrawal of Norwegian and the collapse of WOW air, but it has grown in each of the past three years.
The decision by Icelandic carrier PLAY to focus more on European leisure flying and reduce its North American operation in 2025 will influence the LCC share.
The resurgence of low cost airlines on the North Atlantic is still a sideshow compared to the dominance of the JVs, but is keeping disruptive innovation alive in the market.
- The North Atlantic is leading the long haul capacity recovery to/from Europe.
- United Airlines, Delta Air Lines, American Airlines and Air Canada are all in the top five airlines by seats.
- European airlines collectively have a higher share than US operators, but their share is lower than in 2019.
- Seat share of the three dominant North Atlantic immunised JVs is down slightly in 2024 vs 2023, whereas LCC and other airline share is up this year.
- However, JV share has grown since 2019, and will grow further with acquisitions.
The North Atlantic is leading the long haul capacity recovery to/from Europe
According to data from CAPA - Centre for Aviation and OAG, seat capacity on all routes between Europe and North America in the week of 14-Oct-2024 is at 107.0% of the capacity of the equivalent week of 2019.
This is the strongest capacity recovery of the three major long haul regions to/from Europe, ahead of Europe-Latin America, on 103.6%, and Europe-Asia Pacific, on 100.8%.
Among all regions to/from Europe, the North Atlantic is second only to Europe-Africa, which is on 132.5%.
Route regions from Europe: seats in the week of 14-Oct-2024, as a percentage of the equivalent week of 2019
Annual seat numbers on the North Atlantic are scheduled to grow by 4.5% year-on-year in 2024. This will take full year capacity to 105.5% of 2019 capacity this year.
The recovery in North Atlantic capacity is running ahead of capacity for all of Europe, which reached 102.8% in the week of 14-Oct-2024 and is projected to be 101.7% for the full year (as percentage of 2019).
United, Delta, American and Air Canada are all in the top five by seats
According to data from CAPA - Centre for Aviation and OAG, United Airlines is scheduled to be the biggest airline by seats between Europe and North America in 2024.
The airline has 12.2% of seats, a little ahead of Delta Air Lines on 11.8%.
British Airways, with 9.0%, is the only European airline in the top five, just ahead of American Airlines on 8.9%; Air Canada is fifth, with 6.7%.
Europe to North America: top 15 airlines ranked by seats, 2024*
|
Rank |
Airline |
Seat share |
|---|---|---|
|
1 |
12.2% |
|
|
2 |
11.8% |
|
|
3 |
9.0% |
|
|
4 |
8.9% |
|
|
5 |
6.7% |
|
|
6 |
6.5% |
|
|
7 |
6.0% |
|
|
8 |
4.4% |
|
|
9 |
4.3% |
|
|
10 |
3.1% |
|
|
11 |
3.1% |
|
|
12 |
2.2% |
|
|
13 |
2.2% |
|
|
14 |
2.0% |
|
|
15 |
1.9% |
|
|
All others |
15.9% |
|
|
N American |
43.7% |
|
|
European |
55.2% |
|
|
Other |
1.1% |
European airlines collectively have a higher seat share - but lower than in 2019
Although European airlines occupy only one of the top five places by seats on the North Atlantic, collectively they have a higher share.
In 2024 European airlines are scheduled to have 55.2% of seats, versus 43.7% for North American operators (with 1.1% held by airlines from other regions).
However, compared with 2019, European seat share is down by 3.5ppts (from 58.7%), whereas North American share is up by 3.8ppts (from 39.9%).
The North Atlantic has three dominant immunised JVs
The antitrust immune joint ventures on the North Atlantic continue to have a strong share of seats.
The JV within oneworld consists of American Airlines, British Airways, Iberia, Finnair (since 2013) and Aer Lingus (since 2021).
The JV within the Star Alliance comprises United Airlines, the Lufthansa Group mainline airlines and Air Canada.
The members of the third immunised JV are Delta Air Lines, Air France, KLM and Virgin Atlantic. Alitalia was part of this JV, mainly centred on SkyTeam, until the Italian operator went out of business in Oct-2021.
Virgin Atlantic was in a separate, fourth, JV with Delta from 2013 until 2020, when it joined the wider North Atlantic JV with Delta, Air France and KLM (although it has only joined the wider SkyTeam alliance in 2023).
North Atlantic*: annual seat capacity for immunised JVs**, LCCs and all others, 2012 to 2024***
JV seat share is down slightly in 2024 vs 2023…
The JV within Star is the largest, with a projected seat share of 28.4% in 2024, followed by the SkyTeam JV with 25.2%, and the oneworld JV with 23.6%.
The combined seat share of the three JVs is projected to be 77.2% in 2024, down by 1.4ppts from 2023.
This year-on-year drop in share by the JVs benefited LCCs and other non-immunised operators equally in 2024.
North Atlantic*: annual seat share for immunised JVs**, LCCs and all others, 2012 to 2024***
…while LCCs and other airlines have higher share this year…
Low cost airlines are projected to have 4.4% of seats in 2024, an increase of 0.7ppts from 2023.
The increase in LCC share reflects growth by five of the North Atlantic's six low cost operators.
Norse Atlantic is the largest LCC by North Atlantic seats in 2024, with a full year seat share of 1.3%, ahead of JetBlue, WestJet and French Bee, PLAY, and the new entrant HiSky (Romania).
Other non-immunised operators are scheduled to have 18.4% in 2024, up by 0.7ppts from 2023. Leading the growth in this category are Turkish Airlines, Icelandair, TAP Air Portugal and Condor.
…but JV share has grown since 2019
Although the JVs have lost some seat share in 2024, collectively they are scheduled to operate 110.6% of their 2019 seat capacity in 2024 (ahead of the total North Atlantic market at 105.5%).
As a result, their combined share is up by 4.8ppts from 2019, when they had 73.7%.
Low cost airlines' 2024 share is down by 2.8ppts, from 7.2%, in 2019, with LCC capacity set to be only 63.9% of its 2019 level in 2024. This mainly reflects the withdrawal of Norwegian at the start of the COVID-19 pandemic in 2020, and of WOW air in 2019.
Other non-immunised operators' 2024 share is down by 0.7ppts, from 19.1% in 2019.
JV dominance will endure, but competitive dynamics are still at work
The recovery of the North Atlantic from the COVID-19 pandemic is clear from this analysis. Europe's biggest and most profitable long haul market has bounced back more than its other long haul regions.
Within the North Atlantic market, the immunised joint ventures continue to dominate with a strong share of capacity. This is set to consolidate further if/when SAS joins the JV in SkyTeam, and ITA Airways joins the JV in the Star Alliance.
Based on capacity scheduled for 2024, SAS would add 1.6ppts to the SkyTeam JV's seat share and ITA Airways would add 1.3% to the Star JV's share. Total JV share would increase from 77.2% to 80.1%.
TAP Air Portugal is set to be privatised, and would add 1.7ppts of North Atlantic seat share to whichever JV it were to join if its acquirer brought it into the fold.
While JV dominance is clearly set to endure, LCCs have been steadily increasing their presence in this market.
PLAY changes direction and reduces North American activity in 2025
The greater competition in the North Atlantic has softened yields for some airlines and PLAY has revealed plans for "de-emphasising its business of connecting passengers between North America and Europe" and instead focus on on "the strong leisure markets out of Iceland".
The Icelandic airline's yields on its hub-and-spoke part of the business across the Atlantic is described as being "disappointing," particularly in 2024. "The North American market has changed substantially recently with general increase in supply with a negative effect on PLAY's financial results," it said.
In response, PLAY has decided to significantly cut back its capacity on its North Atlantic routes. This adjustment is already underway and will continue into 2025, it said.
The number of PLAY's destinations in North America and Northern Europe will decrease by mid-year 2025, with a bigger emphasis being placed on the airline's leisure markets in Southern Europe.
LCC North Atlantic seat share will not reach its pre-pandemic peak
It seems unlikely that low cost seat share will return to its pre-pandemic peak of more than 8%, but their scheduled capacity growth of 23.4% in 2024 is much faster than the JVs' 4.2% growth.
Three successive years of expanding LCC had indicated that competitive dynamics have not completely vanished from the North Atlantic, albeit PLAY's reduced flying may suggest otherwise.