Ryanair and easyJet continue growth, British Airways’ struggles continue in Aug-2009
Ryanair and easyJet reported another month of very positive traffic results in Aug-2009, with continued passenger growth and load factors at or above 90%. British Airways meanwhile continues to struggle, facing a nasty combination of big falls in premium demand, as passengers downgrade to LCCs.
Ryanair, easyJet and British Airways passenger number growth: Aug-2008 to Aug-2009
Source: Centre for Asia Pacific Aviation & company reports
Ryanair sets new monthly traffic record in Aug-2009
Ryanair, reported a new monthly traffic record in Aug-2009, handling 6.9 million passengers - a 19% year-on-year increase. Load factors remained unchanged at 90%.
Ryanair traffic highlights for Aug-2009
|
|
|
% change |
|---|---|---|
|
Traffic pax (mill) |
6.9 |
+19% |
|
Load factor (%) |
90% |
- |
Ryanair continues to stimulate passenger demand with its free/cheap seat offers, with the carrier releasing four separate seat sales each covering 1 million seats, for EUR0, EUR1, EUR5 and EUR8, over the past month.
Ryanair recently stated it expects to carry over 67 million passengers in 2009, more than a 16% increase from 2008 levels. Ryanair was the world’s leading international passenger carrier last year, carrying over 57.6 million passengers.
The carrier also continues to maintain that it is “confident” that the growth trend would continue and passenger numbers will remain strong, as competitors continue to reduce capacity.
easyJet’s sky high load factor
easyJet transported 4.8 million passengers in Aug-2009, a 4.7% year-on-year improvement, while load factor gained 0.5 ppts to an impressive 91.8%.
easyJet traffic highlights for Aug-2009
|
|
|
% change |
|---|---|---|
|
Traffic pax (mill) |
4.8 |
+4.7% |
|
Load factor (%) |
91.8% |
+0.5 ppts |
easyJet’s load factors have been above 85% for the past three months, and above 80% for seven consecutive months.
Ryanair, easyjet and British Airways PLF: Aug-2008 to Aug-2009
Source: Centre for Asia Pacific Aviation & company reports
easyJet caps medium term growth rate
However, the LCC has agreed to slow its capacity growth rate to 7.5% p/a in the medium term, compared to 15% growth targets in 2005 to 2008, in reaction to the current economic challenges and to concerns by founder and part owner, Sir Stelios Haji-Ioannou, that the carrier was growing too rapidly amid the global financial downturn.
In the 12 months to Aug-2009, easyJet transported 44.9 million passengers (+4.8%) at an average load factor of 85.4% (+1.4 ppts), while Ryanair has transported 62.4 million passengers at an average load factor of 82%.
British Airways’ double edged sword: weak premium traffic and pax trading down to LCCs
It has, however, been an entirely different story for British Airways. The drift away from premium to economy travel was again evident in Aug-2009, with British Airways seeing premium class declines of 11.0% year-on-year, for 12 consecutive months of premium traffic contractions. This prompted to the carrier to assert “market conditions remain unchanged with yields under pressure”. However, the carrier stated that economy demand gained 1.3%, the second month of positive developments in this segment.
British Airways premium and non-premium traffic growth (year-on-year): Jun-2008 to Aug-2009
Source: Centre for Asia Pacific Aviation & British Airways
British Airways' passenger numbers contractions, while still in negative territory in Aug-2009, are now less severe, down 1.7% to 3.2 million in the month as the carrier reduced capacity (ASKs) by 2.4% year-on-year. Traffic (RPKs) was down 0.7% year-on-year, resulting in a passenger load factor improvement of 1.5 ppts to 84.7% (overall load factor was 75.9%, a slight 0.8 ppt year-on-year improvement).
British Airways, which last month closed a GBP350 million issue of convertible bonds to strengthen its balance sheet, saw some recovery in demand for cargo services, with cargo traffic down 5.4%, compared to a year-to-date decline of 9.2%.
Passenger declines "appear to reach bottom, but too early to be sure": British Airways
British Airways CEO, Willie Walsh, last week stated while there is evidence that declines in passenger traffic have reached the bottom, it is too early to say there are signs of recovery.
According to Mr Walsh, “some people see the slight growth in overall travel as being a green shoot, but it is clearly not. The decline in premium traffic tells you the general business environment is still pretty weak, and that's going to remain the case for some time. There might be some evidence that we've reached the bottom. Traffic has stabilised and looks better in the peak Summer months, but it is far too early to say that there are signs of recovery. We have a bit to go before we see that, and quite a bit more to go before we see the recovery meaning something".
Mr Walsh added, "the airlines that go out of business are the ones that say, 'oh well, we'll wait for it to come back'. I've been in this business long enough to see repeated situations where people thought things would come back, but they don't”.