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Ukraine invasion hits Europe airline bookings more than global average

Analysis

Russia's invasion of Ukraine continues to stall the capacity recovery for European aviation, but the impact on airline schedules remains understated. Europe's seat capacity is down by 28.8% versus 2019 in the week of 14-Mar-2022. This is just 0.5ppts worse than last week, but it is the second week of sliding after five previous weeks of improvement.

Europe remains fifth in the regional ranking, above Asia Pacific, where capacity is down by 31.2%. Middle East capacity is down by 23.1%, Africa by 17.0%, North America by 14.0%, and Latin America by 9.6%.

Data from IATA indicate that Russia's invasion of Ukraine prompted an immediate 8% week-on-week drop in global airline bookings, and bookings in Europe fell by 14%. There are signs that future schedules filed by European airlines are now contracting a little more than previously.

If bookings continue to suffer into the northern summer, European airline schedules must surely be trimmed further.

Summary

  • Europe has 20.2 million seats this week, down 29% vs 28.4 million in the same week of 2019.
  • Europe is still fifth in the regional ranking on this measure.
  • Europe's 1Q2022 capacity is projected at 74% of 2019 levels, and 2Q2022's projection is 89%.
  • Schedules still do not reflect Russia's invasion of Ukraine.
  • IATA: global airline bookings fell 8% week-on-week when Russia invaded Ukraine, and bookings in Europe fell by 14%.

Europe has 20.2 million seats vs 28.4 million in this week in 2019 – down 29%

In the week commencing 14-Mar-2022 total European seat capacity is scheduled to be 20.2 million, according to OAG schedules and CAPA seat configurations. This is 28.8% below the 28.4 million seats of the equivalent week of 2019.

This is only 0.5ppts worse than last week, but this is now the second successive 0.5ppt decline after a 12.7ppt improvement over the previous five weeks.

This week's total seat capacity for Europe is split between 5.8 million domestic seats, versus 7.4 million in the equivalent week of 2019; and 14.4 million international seats, versus 21.0 million in 2019.

Europe's domestic seats are down by 22.3% versus 2019, compared with -20.8% last week.

International seat capacity is down by 31.1% versus 2019, versus last week's -31.0%.

Europe: percentage change in weekly airline seat capacity vs equivalent week of 2019, weeks of 06-Jan-2020 to 14-Mar-2022

 

Europe is still fifth in the regional ranking by capacity as percentage of 2019

Europe remains fifth in the ranking of regions measured by seats as a percentage of 2019 levels this week.

With capacity down by 28.8%, Europe is 2.4ppts better than Asia Pacific, where capacity is down by 31.2%. Middle East seat count is down by 23.1%; capacity is down by 17.0% in Africa, by 14.0% in North America, and by 9.6% in Latin America.

The Middle East has taken an upward step in the trend in the week of 14-Mar-2022, whereas Latin America has taken a downward step.

Europe, North America, Asia Pacific and Africa are broadly flat on last week, the week of 07-Mar-2022 (less than 0.5ppt change).

Percentage change in passenger seat capacity vs 2019 by region, week of 30-Mar-2020 to week of 14-Mar-2022

 

Europe's 1Q2022 capacity is projected at 74% of 2019 levels; 2Q2022 at 89%

According to data from OAG and CAPA, Europe's capacity as a percentage of 2019 levels improved with each successive quarter of 2021.

It was 27% in 1Q2021, 29% in 2Q2021, 64% in 3Q2021, and 71% in 4Q2021.

Schedules for 1Q2022 currently project seats at 74.4% of 1Q2019 levels. This is down only slightly from the 74.7% projected a week ago, 07-Mar-2022 (Mar-2022 capacity projections are down by 1.2ppts since last week, to 71.7%).

Schedules for 2Q2022 currently project seats at 89.1% of 1Q2019 levels, which is a downward revision from 90.5% a week ago (Apr-2022 has been revised down to 83.1% from 86.4% week ago, while May-2022 and Jun-2022 are down by only modest amounts).

Schedules still do not reflect Russia's invasion of Ukraine

Schedules filed with OAG by Europe's airlines still do not appear to be reflecting the effects of the Russian invasion of Ukraine – a point that has been noted by CAPA Analysis more than once since the invasion.

See related CAPA reports:

Ukraine seat capacity derived from schedules filed with OAG and CAPA seat configurations for the week of 14-Mar-2022 has fallen to 16% of the equivalent week of 2019, from 19% last week.

This is a big change from 88% in the week of 21-Feb-2022, the last week before the invasion of Ukraine, but EUROCONTROL data record flight numbers at 0% in the seven days to 13-Mar-2022.

Weekly seat capacity for Russia derived from schedules is at 65% this week, down from 78% last week and 83% in the week of 21-Feb-2022. The Russian Federation is not part of EUROCONTROL, so up to date data on flight numbers are not available.

Nevertheless, this does not look low enough, given that almost all international flights to/from Russia are suspended and yet schedules data still indicate international seat capacity at 32% of 2019 levels.

IATA: global bookings fell 8% week-on-week when Russia invaded Ukraine

The negative impact of the invasion on European aviation is felt not only in reduced activity in Russia and Ukraine.

More broadly, sentiment towards air travel typically suffers in times of conflict and uncertainty. This can be compounded by economic challenges, such as may result from sanctions on Russia (which also have an impact on the nations imposing them).

Data from IATA Economics, using DDS ticketing data at 03-Mar-2022, indicate that global airline bookings have suffered as a result of the Russian invasion of Ukraine.

In mid-Feb-2022, before the invasion, international bookings were above 50% of 2019 levels and domestic bookings were close to 90% as the industry recovered from the Omicron wave of COVID-19.

This changed in the week of 24-Feb-2022, when Russia invaded Ukraine.

Global bookings fell by 8% from the previous week, with domestic bookings down by 8% and international bookings down by 9%. Some of the domestic reduction was seasonal, driven by China and the end of the New Year holiday.

…while bookings in Europe fell by 14%

However, in Europe overall, bookings fell by 14% week-on-week in the week of 24-Feb-2022, according to IATA.

Not surprisingly, travel to/from Eastern Europe suffered the biggest declines in demand as Ukraine and Moldova closed airspace entirely and experienced more refunds than new ticket sales in that week.

In Russia, bookings dropped by 52% week-on-week.

Passenger ticket sales, seven-day moving average as percentage change from equivalent period of 2019, Jan-2021 to Mar-2022

 

European airline schedules seem likely to be trimmed further

IATA said that there were some increases in demand for air travel from countries neighbouring Ukraine: for outbound flights to Western Europe and to countries with sizeable expat communities in Ukraine (e.g. India, Nigeria, Georgia and Morocco).

However, this demand from people leaving Ukraine did not offset the negative demand impacts.

Moreover, it is likely to be transient, whereas the negative impacts will last as long as the conflict – possibly a lot longer.

European airline schedules seem likely to be trimmed further, even if the underlying recovery from COVID-related international travel restrictions remains broadly on course.

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