UK-Spain aviation: LCCs dominate a difficult market

The aviation market between the UK and Spain is Europe's leading country pair by seat capacity, ahead of Germany-Spain and UK-Germany. UK-Spain has been the fastest-growing of these three leading country pairs over the past five years. However, it is contracting this year, mainly as a result of the demise of Monarch Airlines in Oct-2017.

Monarch's bankruptcy provided a glimpse into the turmoil beneath the surface glamour lent to the UK-Spain market by its size and growth. This is a market that finds itself far from a state of equilibrium. Demand is heavily skewed by the almost one-way flow of tourism from the UK to Spain, resulting in a highly seasonal, leisure focused market dominated by LCCs.

Ryanair and easyJet are the leading airlines by seats on UK-Spain routes, with fast growing Jet2.com in third place. Behind these LCCs in fourth place is the combined capacity of the four airlines of IAG, which include not only the two countries' flag carriers, but also Spain's leading LCC. This summer's capacity reduction is a needed response to unsustainable capacity surplus, but UK-Spain is still highly competitive.