European low-cost carrier growth moderates in Mar-2011
None of Europe’s largest LCCs reported passenger growth in excess of 15% in Mar-2011, marking a slowing in growth in 2011 among Europe’s largest LCCs. A key trend has been that while these European LCCs are adding new routes and establishing new bases, there have also been a number of route and base reductions, as the region’s largest LCCs, including Ryanair and easyJet, increase focus on profitable growth.
Selected European carriers intra-Europe passenger numbers and passenger
numbers growth: Mar-2011
Vueling and germanwings report passenger declines in 1Q2011
During 1Q2011, both Vueling and germanwings reported year-on-year declines in traffic with declines in every month of the first quarter.
Vueling Airlines Passenger Numbers (2009 to 2011)
Germanwings Passenger Numbers (2009 to 2011)
Five consecutive months of single-digit growth for Ryanair
Meanwhile, Ryanair has now reported five consecutive months of growth of under 10%. Prior to this, the LCC had reported eight consecutive months of double-digit growth. Growth has however moderated over the years, with the 8% growth experienced between Mar-2010 and Mar-2011 marking the slowest pace of growth in the past decade with the exception of the 4.9% growth reported in the height of the recession, between Mar-2008 and Mar-2009.
Ryanair Passenger Numbers (2009 to 2011)
Double-digit growth for easyJet, Norwegian and Cimber Sterling
easyJet reported passenger growth in Mar-2011, for the 11th consecutive month of year-on-year growth, with 11.9% passenger growth in the month. Traffic has increased with double-digit growth in every month of 2011 but only in four months in 2010. The carrier, in its growth plans, is targeting European network carriers as it seeks to increase its share of the business travel market and boost revenues, marking a significant change in strategy for the LCC.
easyJet Passenger Numbers (2009 to 2011)
airberlin, meanwhile, has witnessed passenger growth for the past 11 months, with growth limited to single digits with the exception of the 14.1% passenger growth recorded in Jan-2011. Passenger numbers in Mar-2011 increased by 8%.
In 2010, airberlin handled a record 33.6 million passengers, making the so-called hybrid carrier the sixth largest carrier in Europe. The carrier stated that it witnessed strong growth in business passengers in 2010, particularly corporate customers. airberlin’s passenger numbers will grow by 4-5% in 2011, driven by international expansion, with increased frequencies to New York, San Francisco and Vancouver, the carrier said. airberlin had a “weak start” in the first quarter after tourists cancelled flights to Tunisia and Egypt due to political unrest there. Capacity to those countries will be reduced by 33% in the summer flight plan, Mr Hunold said. Domestically, the carrier expects the German aviation tax to increase pricing pressure.
airberlin Passenger Numbers (2009 to 2011)
Among the Nordic LCCs, by Norwegian Air Shuttle and Cimber Sterling have been expanding rapidly. Both carriers have reported double-digit passenger growth in every month since May-2010. Norwegian stated its increase in passenger traffic, production and passengers is related to the Group’s expansion in established markets and to the introduction of new routes from April 2010 to March 2011, as well as adjustments to production capacity.
Norwegian Air Shuttle Passenger Numbers (2009 to 2011)
Cimber Sterling Passenger Numbers (scheduled) (2009 to 2011)
Norwegian and Cimber Sterling yields remain below 2009 levels
However, Norwegian Air Shuttle has reported continued unit revenue weakness. In Mar-2011, the LCC’s unit revenue decreased by 10%. The RASK decrease was affected by last year’s early Easter holiday. Approximately 80 % is offset by an adjusted route portfolio with 7 % longer sector length and the introduction of 14 new B737-800 aircraft with higher capacity and lower unit cost since Mar-2010. Yield decreased by 5% in the month. RASK and yields have declined on a year-on-year basis in every months through 2009, 2010 and in the first quarter of 2011 for Norwegian.
Norwegian Air Shuttle Yield (2009 to 2011)
Norwegian Air Shuttle Revenue Per ASK (2009 to 2011)
Cimber Sterling reported a 26% increase in Feb-2011 yield, albeit to levels weaker than in 2009, and a 23% increase in RASK in Mar-2011.
Cimber Sterling Yield (2009 to 2011)
Cimber Sterling Revenue Per ASK (2009 to 2011)
Load factors weaken
Load factors among Europe’s LCCs were generally weaker or unchanged in Mar-2011.
Selected European airlines intra-Europe passenger load factor and passenger
load factor growth: Mar-2011
The exception was airberlin, which in Mar-2011 reported load factor growth of 1.8ppts. The carrier has reported load factor growth in every month since Sep-2010.
airberlin Passenger Load Factor (2009 to 2011)
Ryanair load factors were unchanged in Mar-2011, after reporting load factor improvements of 1ppt in Feb-2011 and Jan-2011. Prior to this, Ryanair reported unchanged or negative growth in every month between May-2010 and Dec-2010.
Ryanair Passenger Load Factor (2009 to 2011)
Meanwhile, easyJet, Germanwings, Vueling, Norwegian and Cimber Sterling all reported load factor contractions in Mar-2011.
easyJet and airberlin reported load factors of above 75% in the month with easyJet reporting the strongest load factors among the European LCCs in Mar-2011 at 86.9%, even as it reported a third consecutive month of year-on-year load factor declines.
easyJet Passenger Load Factor (2009 to 2011)
On the other end of the spectrum, Cimber Sterling had the weakest load factors in Mar-2011, at 63%, with a 5ppt year-on-year decline.
Cimber Sterling Passenger Load Factor (2009 to 2011)
Meanwhile, Germanwings has reported the longest period of load factor weakness, with load factors being weaker on a year-on-year basis through 2010 and the first quarter of 2011.
Germanwings Passenger Load Factor (2009 to 2011)
Norwegian Air Shuttle, meanwhile, reported its first load factor decline since Aug-2010 in Mar-2011, stating the weakness was primarily explained by last year’s early Easter holiday.
Norwegian Air Shuttle Passenger Load Factor (2009 to 2011)
Vueling reported its second consecutive month of load factor declines.
Vueling Airlines Passenger Load Factor (2009 to 2011)
165 million pax among Europe six largest LCCs in 2010
According to ELFAA, Europe’s six largest LCCs handled around 165 million passengers on a combined basis. Traffic growth in 2010 ranged from 8% for easyJet (to 49.7 million) and Germanwings (to 7.7 million) to 11% for Ryanair (to 72.7 million), 21% for Norwegian (to 13.0 million), 23% for Wizz Air (to 9.6 million), and 35% for Vueling (to 11.0 million), although Vueling’s high growth was largely attributed to its merger with clickair in 2009. ELFAA capacity increased in all but two months in 2010 on a year-on-year basis.
ELFAA traffic growth: 2008 to 2010
Selected European carriers intra-Europe passenger numbers and passenger
numbers growth: 2010
APPENDIX: Europe LCC traffic growth for Mar-2011
Ryanair traffic growth for Mar-2011
easyJet traffic growth for Mar-2011
Air Berlin traffic growth for Mar-2011
Germanwings traffic growth for Mar-2011
Vueling traffic growth for Mar-2011
Norwegian traffic growth for Mar-2011
Norwegian yield and unit revenue growth for Mar-2011
Cimber Sterling traffic growth for Mar-2011