A318 to A380; Europe’s legacy carriers take different approaches to long-haul development

This week’s inaugural flight by British Airways from London City airport to New York JFK using an Airbus A318 configured with just 32 seats represents a bold departure for the airline from its traditional long-haul business model. In contrast Air France will shortly be taking delivery of its first A380 which will enter service, also on the New York route, at the end of November and will be equipped with over 500 seats.

Transatlantic traffic is critical for British Airways as their latest traffic figures for August confirm that 45% of the airline’s capacity, as measured by ASKs (available seat-kilometres), is dedicated to serving the Americas. This compares with 36% for Lufthansa and just over 32% for Air France / KLM. For all three carriers the transatlantic routes represent their single biggest geographical market.

Chart: Europe’s big 3 global carriers - ASK share for current financial year by geographic region
Source: AirFrance KLM, British Airways, Lufthansa
* AirFrance KLM also operates a further 9.9% of its ASKs on routes to the Caribbean and Indian Oceans.

Similarly British Airways (BA) is also more dependent on its Africa and Middle East network which represent 20% of the airline’s total ASKs compared with 14% for Air France / KLM and under 9% for Lufthansa. In comparison, BA allocates just 14% of its capacity on Asia / Pacific routes, compared with 21% for Air France / KLM and 25% for Lufthansa. Despite this BA has cut its Asia / Pacific capacity by almost 13% this financial year.

All three carriers increasing Africa & Middle East capacity

Analysis of how much the airlines have shifted or cut capacity (in their current financial year) by geographic region reveals that while all three have cut capacity by no more than 5% overall, capacity has been added by all three carriers to destinations in Africa and the Middle East. Lufthansa leads the way with a massive 18% increase in capacity which has generated a 10% increase in passengers resulting in load factors in this sector falling by almost five percentage points to 72.1%.

Chart: Europe’s big 3 global carriers - Change in ASKs by geographic region
Source: AirFrance KLM, British Airways, Lufthansa

Comparing European capacity cuts with total capacity cuts reveals that all three airlines have reduced capacity more on short-haul (European) services than on long-haul (inter-continental) services. All three carriers have indicated that capacity cuts are likely to continue into the winter season.


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