Early summer capacity down by 4.8% in Europe; Norwegian in pole position for growth

Analysis of airline schedule data provided to OAG for the beginning of the imminent summer season (starting this Sunday 29 March) indicates that seat capacity at Europe’s over 600 airports is down around 4.8%. Given that passenger load factors of AEA member airlines have been down between one and one and a half percentage points in recent months, it is likely that passenger demand will be down around 6.5% across Europe’s airports. However, many airlines and airports will benefit (relatively) this April from the return of Easter which slipped into March last year.

Istanbul and Zurich reporting capacity growth

A more detailed look at Europe’s busiest airports shows that among the top 15 only Istanbul and Zurich are reporting capacity growth this summer. Istanbul’s on-going surge is driven by Turkish Airlines, SunExpress and Pegasus Airlines all of whom are reporting growth. The busiest airports show some of the smallest capacity declines as carriers are reluctant to give up valuable slots at these airports that may be grabbed by competitors. The EU’s decision to propose a relaxing of the ‘use-it-or-lose-it’ rules (at least during this summer) has been heavily criticised by LCCs who claim the move is anti-competitive.

Image: Top 15 European Airports
Source: OAG Max Online for w/c 30 March 2009 and w/c 31 March 2008

Just outside the top 15 both Athens and Milan Malpensa are showing double-digit growth. The growth of Aegean in Athens and the on-going process by the likes of easyJet and Lufthansa Italia to take up the slack at Malpensa after Alitalia’s downsizing, help explain these figures.

Also just outside the top 15, London Stansted has seen capacity drop by 20% since last summer as Ryanair carries out its plan to reduce the number of aircraft based there in response to rising airport charges.

No growth at Europe’s five major country markets

None of the five major country markets in Europe are reporting growth this summer. UK and Spanish airport capacities are down 9.6% and 8.2% respectively. Greece and Turkey are reporting growth driven by their major airports. Scandinavian countries are all suffering as SAS takes dramatic action to reduce capacity in its network. Norway is down 8.2%, Denmark 10.9% and Sweden 12.7%. Previously fast-growing Poland is down an alarming 18%.

Chart: Top 25 European Countries
Source: OAG Max Online for w/c 30 March 2009 and w/c 31 March 2008

Somewhat surprisingly Latvia is reporting the biggest growth of almost 30% thanks to rapid expansion by airBaltic. However, given the country’s financial crisis it remains to be seen whether capacity growth is enough to increase passenger numbers. Nearly half of all passengers at the airport are transfer passengers.

Romania’s growth is being driven by the expansion of low-cost operations in the country primarily Blue Air and Wizz Air. Outside the top 15 there are worrying signs for some Central European states as capacity is down 16.9% in Slovakia (local LCC SkyEurope is shrinking fast), down 21.5% in Estonia and down almost 40% in Lithuania, where the demise of flyLAL at the beginning of the year has certainly been a major factor.

Aegean, Norwegian and Wizz Air defying general trend

Only three of Europe’s top 10 airlines are reporting capacity growth at European airports at the start of the summer season. Ryanair and Turkish Airlines are joined, somewhat surprisingly by Iberia (up just 0.1%). Among smaller airlines Norwegian is reporting almost 50% growth which is slightly false as the airline now operates the former FlyNordic operations under its own brand name. Aegean Air and Wizz Air have both increased seat capacity by over 25% in the last year, while lower down the rankings airBaltic (+32.3%) and SunExpress of Turkey (+38.3%) are also defying the overall trend.

Chart: Top 40 European AIrlines
Source: OAG Max Online for w/c 30 March 2009 and w/c 31 March 2008

Even Ryanair is showing just 3% capacity growth at the start of the summer season. However, the number of routes on offer has increased by 16% resulting in a reduction in average frequency on each route from 6.3 to 5.6 weekly flights. Among the top 40 airlines seven are reporting capacity reductions of over 15%, led by Spanair with 28.2%. Alitalia, bmi, bmibaby, clickair, SAS and TUIfly.com have all cut their networks considerably for a variety of reasons. Just outside the top 40 SkyEurope’s capacity is down around 33%.

It is worth noting that of last summer’s top 40 airlines at European airports only one, Sterling, has ceased operating. Many of its assets and routes have since been picked up by Cimber Sterling, Norwegian and Transavia.com.


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