Europe Slows for Summer

Too much capacity too quickly. A common complaint from airlines when demand softens, yields fall and the price of oil creeps up. This year has already been impacted by the loss of carriers such as Wow Air, Bmi Regional, Primera, Small Planet, Cobalt and of course more recently Jet Airways, although as we head towards the peak summer months, at least for most airlines fear of failure will have been averted until at least the winter season.

As most airlines finalise their Summer 2019 schedules, we look at where and how capacity has been added in Europe. Of course, factors such as the B737-Max and Brexit are certainly influencing both business and consumer confidence but the underlying trends in terms of both frequency and capacity suggest that perhaps Summer 2019 may not be too bad for either the airlines or their investors.

Across Europe scheduled capacity for this summer is down compared to last year, only marginally at around 1,400 fewer seats a day with 118,000 fewer scheduled flights departing, suggestive perhaps of fewer regional aircraft operating than in previous years. At a summary level, frequency has fallen by 2.1% whilst capacity is less than a percentage point lower than Summer 2018.

Italy Battles with Low-Cost Airlines

Europe’s top ten largest markets account for nearly three-quarters of all scheduled capacity, seven markets are reporting reductions in frequency with two of the larger markets; Germany (-4.2%) and France (-3.3%) quite significant although in the case of Air France, perhaps no Joon flying may be a factor! The fastest growth market in the top ten from a frequency perspective is Italy where a major low-cost airline battle continues between Ryanair, Easyjet and Vueling but even here capacity is slightly below previous year levels.

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