Spain aviation and LCCs: 2016 traffic above pre-crisis levels, but capacity surplus unsustainable

After suffering a protracted recession in 2009 to 2013, Spain's air travel market at last looks set to exceed its pre-crisis passenger numbers in 2016, albeit with something of an airline capacity glut. During the recession traffic was actually remarkably robust, thanks to buoyant inbound tourism and the growth of LCCs.

Europe's third largest aviation market by seats is dominated by short haul, with long haul strongly skewed towards trans-Atlantic routes (North and South) - principally operated by a resurgent Iberia and Air Europa. For long haul connections elsewhere Spain relies on other European hubs, although Iberia has re-entered Asia Pacific with Madrid-Shanghai, and plans a Tokyo service. The superconnectors have yet to make a big impression in Spain, but this may change.

Ryanair has been the largest airline by seats in Spain since 2013, the result of its own growth and also of second ranked Iberia's restructuring. IAG's other Spanish airline - the fast-growing Vueling - has been the country's number three ranked airline since 2010, pushing Air Europa into fourth. Madrid has remained Spain's largest airport, but Barcelona's growth has outpaced Madrid's. Spain's airport operator AENA is benefiting from double-digit growth this year, but airlines are suffering yield declines.