Analysis Reports

Relative to Europe's other largest commercial aviation markets, Germany stood out for the wrong reasons in 2025, and there seems little prospect for a change in its fortunes.

Germany's aviation market, long regarded as a cornerstone of European connectivity, has emerged from the COVID pandemic not as a leader of recovery, but as its most conspicuous laggard among major markets.

While Europe's top aviation countries collectively surpassed pre-COVID capacity in 2025, Germany remained more than 11% below its 2019 levels, revealing a structural divergence rather than a cyclical pause.

This analysis explores how high taxes, rising airport charges, labour constraints, environmental policy priorities and airline strategy have converged to constrain growth, reshaping Germany into a more premium, yield-focused market with limited volume ambition.

Low cost carriers have redeployed capacity to lower-cost jurisdictions, Lufthansa Group has prioritised profitability over expansion, and policy-makers have elevated sustainability objectives above network rebuilding. The result is a recalibrated aviation ecosystem that is financially healthier, yet strategically diminished.

As Southern and Eastern European markets accelerate, Germany's relative decline is altering hub competitiveness, traffic flows and the balance of power within Europe's aviation system.

The question is no longer whether Germany will recover, but whether it has consciously chosen a different path - one that trades scale for selectivity.

In an increasingly competitive European landscape, this choice carries profound implications for connectivity, economic vitality and geopolitical relevance.

Germany's grounded recovery may yet become a defining case study in post-pandemic aviation realignment.

Global airport seat capacity has become an increasingly important reference point for understanding how the aviation industry is evolving, particularly in periods of uneven demand and structural change.

Unlike passenger statistics, capacity reflects forward-looking decisions by airlines and airports, shaped by expectations around growth, competition, infrastructure limits and operating economics.

The world's largest airports continue to be dominated by a relatively small group of mega hubs, yet the similarities largely end there.

Differences in domestic versus international reliance, hub-and-spoke intensity, airline concentration and low-cost penetration result in widely varied outcomes from superficially comparable levels of capacity.

Infrastructure design also plays a decisive role, with runway availability, operating hours and aircraft mix often proving more influential than terminal size alone.

Recent years have underscored how capacity can expand or contract independently of underlying demand, influenced by fleet availability, regulatory constraints and geopolitical factors. As a result, headline capacity rankings provide only partial insight into performance or resilience.

Understanding how and where capacity is being deployed therefore offers a useful framework for assessing strategic intent across the industry.

However, it also highlights the limits of capacity as a standalone metric, reinforcing the need to interpret it alongside utilisation, yield and long-term sustainability when assessing the true health of global aviation.

OAG's annual review of seat capacity by airport, in this case for 2025, reveals the usual suspects heading the Top 10 list - the 'Mega hubs', that handle a hefty percentage of the world's air travellers, and especially those in transit. This report is based on the original OAG report together with CAPA - Centre for Aviation's observations on it.

Aer Lingus announced in late Jan-2026 that its four-year-old trans Atlantic base at Manchester Airport would close by the start of the summer 2026 schedule. According to the Irish subsidiary of IAG, the base is profitable, but its margins are below those generated on the rest of its long haul network.

Since late 2021 Aer Lingus has operated from Manchester to New York JFK and Orlando International in the US, and to Bridgetown in Barbados. Its final flight on the New York service is scheduled for 23-Feb-2026, and the Orlando and Bridgetown routes will cease by 31-Mar-2026.

The underperformance of the base likely reflects less than stellar load factors on these routes, and challenging labour relations.

Ultimately, Aer Lingus' decision to close its Manchester long haul base is the result of the financial discipline imposed by its parent, IAG.

Sustainability has shifted from a long-term aspiration to an immediate strategic stress test for the global aviation industry. With a collective commitment to net zero carbon emissions by 2050, airlines now face growing evidence that interim targets - particularly around sustainable aviation fuel (SAF) uptake, fleet renewal and operational efficiency - are slipping out of reach.

A recent session at the CAPA Airline Leader Summit World in Lisbon confronted a critical question for senior decision-makers: is aviation approaching a genuine tipping point, or is it time to recalibrate expectations, timelines and cost-sharing mechanisms?

The discussion is framed against a backdrop of real-world constraints. SAF production continues to lag demand despite policy mandates in Europe and parts of Asia Pacific, aircraft delivery delays are stretching fleet plans well into the 2030s, and airspace modernisation remains fragmented by national interests.

These pressures have prompted several major airlines to publicly revise or defer previously announced sustainability milestones, signalling a growing disconnect between ambition and delivery.

The session explored whether current regulatory approaches - such as SAF blending mandates, emissions trading schemes, and restrictions on short-haul flying - are accelerating progress or unintentionally distorting investment and network decisions. It also examined the limits of cost pass-through in a price-sensitive market, and how much of a sustainability premium passengers, corporates and governments can realistically absorb.

Crucially, the session reframed sustainability not solely as a compliance challenge, but as a systemic efficiency opportunity - one that demands closer coordination across airlines, manufacturers, energy producers, airports and regulators.

For industry leaders, the conversation offered a timely and pragmatic assessment of how aviation can move from rhetoric to resilience in its sustainability journey.

Indonesia's system capacity growth has flattened off in recent years, although there is certainly much more potential for expansion in this market.

This update provides a snapshot of the Indonesian market - which contains the largest population in the Southeast Asian subregion.

Indonesian airlines have more than 500 aircraft on order, mainly due to the Lion Air Group, which is a major player in Southeast Asia.

As with some other Asia Pacific markets, such as India, Malaysia and the Philippines, Indonesia's largest airline (in terms of system seats) is an LCC.

However, despite the dominance of Lion Group, there is still plenty of competition in Indonesia's international market, thanks to Garuda Indonesia, AirAsia, and numerous other overseas airlines.

Tourism growth has rebuilt to 2019 levels, and has potential to soar further, despite the slow return of the key Chinese visitor market.

The sheer size of Indonesia's population makes internal tourism an important factor as well.

Norwegian Group has emerged from its post-pandemic restructuring in a much stronger position.

Norwegian Air Shuttle's overreach brought it close to bankruptcy, even before the COVID-19 crisis.

Strategic and financial restructuring have boosted its finances and focused it on its Nordic-led European network.

The low cost airline even made a successful acquisition of the regional airline Widerøe, creating Norway's largest airline group (ahead of SAS).

This report considers Norwegian Group's strengths, weaknesses, opportunities and threats.

Outside the US, third runways usually (not always) come along when airport passenger traffic exceeds 50mppa, although the planning for them needs to start a decade or so in advance, as there are always likely to be entrenched objections. Some airports handle much more than that on two runways - usually because they have to, for one reason or another.

In 2025 Ankara's Esenboğa Airport handled just less than 14 million passengers. Ankara is Türkiye's capital, but the busiest airport by far (and second busiest in Europe) is Istanbul, owing to its economy, trade links, tourist appeal and transfer status.

The count of 14 million mppa is only a third of what London Gatwick airport handles on one runway.

Nevertheless, for many different reasons the owner, the state agent DHMI, and the operator, TAV Airports, decided to construct a third runway, and it is now up and running; a giant of a thing.

This report looks into those reasons and offers a little insight into why passenger traffic and cargo volume forecasting can be one of the most demanding tasks in the air transport business.

In this case, EUR300 million of loaned money rests on its accuracy.

Amid all the uncertainty that has become a mainstay in the airline industry during the last year, one constant remains - premium US airlines still have significant advantages over airlines scrambling to cater to shifting passenger preferences.

That certainty is hardly surprising, given the outperformance of premium products for the past couple of years, and that momentum continues to create a stark reality for the ultra-low cost airlines attempting to find their footing in what appears to be a permanently changed market.

And even when results improve within the main cabin, larger airlines are likely to be the beneficiaries of that upswing as cost convergence continues to remain a line in the sand for the industry 'have' and 'have nots'.

Europe's airlines have installed WiFi internet connectivity for passengers on 21% of their short/medium haul jets and 24% of their narrowbodies, according to the CAPA Fleet Database.

Among Europe's top 30 European narrowbody operators, WiFi is available on 29% of aircraft. Turkish Airlines has the biggest European fleet of WiFi-enabled narrowbodies.

However, the low cost airlines Ryanair, Pegasus Airlines and easyJet - all major narrowbody operators - have no onboard internet connectivity.

Where internet access is available on European flights, the most common approach is for airlines to charge for it, while many also offer free messaging.

Free access for all passengers is rare on European flights. However, KLM is now rolling out free WiFi to loyalty scheme members (and facilitating onboard scheme registration).

The high speed, high bandwidth, Starlink WiFi service owned by Elon Musk is currently available on only 48 European short/medium haul aircraft. Ryanair's decision not to install Starlink recently led to a public spat between group CEO Michael O'Leary and the world's richest man.

Nevertheless, Starlink is growing among existing customers and has won recent orders from British Airways and Lufthansa Group.

As aviation emerges from a turbulent first half of the decade, regulation has become one of the industry's most powerful shaping forces.

Environmental mandates, consumer protection rules, infrastructure constraints and geopolitics are increasingly set at global or supra-national levels, yet their real-world impacts are felt most acutely by airlines operating in distinct regional contexts.

This session from the CAPA Airline Leader Summit - World (Dec-2025) brings together senior leaders from three major regional airline associations to examine how regulation is evolving and how industry bodies are responding.

The discussion explores the unique role airline associations play as intermediaries between governments, multilateral institutions and commercial operators.

Far from being passive commentators, associations are deeply involved in shaping policy outcomes - from sustainability frameworks such as CORSIA and regional SAF mandates, to market access, ownership rules and passenger rights regimes.

The session highlights how associations increasingly act as coordinators, aligning diverse member interests into coherent advocacy positions while also supporting implementation once regulations are enacted.

With examples drawn from Asia-Pacific, Europe and Latin America, the session underscores that "one-size-fits-all" regulation rarely delivers optimal outcomes in aviation.

Differences in market maturity, infrastructure, airline business models and access to capital mean that identical rules can produce very different results.

This discussion provides timely insight into how regional airline associations are adapting their strategies, building cross-regional cooperation and engaging regulators to ensure that aviation regulation supports safety, sustainability and long-term industry viability rather than undermining it.