European and North American airlines prepare for minimal winter growth as Asia’s airlines schedule for 8% more ASKs

Building on recent expansion: Turkish Airlines arrives in Baku Azerbaijan, on July 31; Spirit Airlines goes intra-state Texas with DFW-Houston on 20 September; while on September 12, Indonesia’s Lion Air announced an entirely new Malaysian airline. The AirAsia rival, Malindo Airways, starts flying next May.

With the start of the new (northern) winter scheduling season just days away, this week takes a look at how planned capacity of the biggest airlines in the three main air transport markets of Asia, Europe and North America compares this winter with last winter. With aviation fuel prices remaining high and the next few months representing ‘off-peak’ at least as far as Europe and North America are concerned, which airlines have cut capacity (compared with last winter) and which are still growing, and how quickly?

Ryanair grounding even more aircraft this winter?

With much of the European economy struggling for growth, it is maybe not surprising that six of the top 12 airlines (based on departing seats from European airports in August 2012), including all of the top four, have reduced seat capacity (as measured by ASKs – Available Seat Kilometres) this winter compared with last winter. Ryanair continues to grow during the peak summer months, but continues to reduce capacity in winter. After apparently grounding some 80 aircraft last winter, it seems likely that the Irish airline will be grounding close to 100 aircraft this winter.

European airlines Change in ASKs W12 v W11

Source: SRS Analyser for January 2012 and January 2013

Meanwhile, airberlin continues to try and shrink its way to profitability, while British Airways has grown thanks to its acquisition of former rival bmi British Midland. Turkish Airlines remains the most dynamic flag-carrier in Europe, growing by around 20% in winter as well as in summer. The other fast-growing carriers are Europe’s third and fourth biggest LCCs, Vueling (expanding hugely in Barcelona) and Norwegian (expanding across Scandinavia and benefiting from the relatively healthy Scandinavian economies).

Top 12 North American airlines combined plan for zero growth

In North America, the busiest carriers have shown little interest in growing significantly this winter. When combined, the top six airlines have reduced ASKs by 0.4%. Although Southwest has grown by 4%, its wholly-owned subsidiary AirTran has cut ASKs by 18%, resulting in the combined airlines reporting a 0.1% reduction in ASKs.

North American airlines Change in ASKs W12 v W11

Source: SRS Analyser for January 2012 and January 2013

While JetBlue and in particular Spirit Airlines are growing, another low-cost carrier, Frontier, has cut ASKs by 14% as it realigns its network. Just outside the top 12, previously fast-growing Virgin America is reporting year-on-year ASK growth of just 1%, which the airline presumably hopes will be a prelude to profitability.

Asia’s biggest airlines plan ASK growth of 8% this winter

Unlike Europe and North America, Asia’s 12 biggest airlines (as ranked by departing seats from Asian airports in November 2012) are currently scheduling 8% growth in ASKs this winter, with only one of the top 12 airlines (Hainan Airlines) not growing. Indonesia’s Lion Air and India’s IndiGo are both growing by around 30%, something that China’s Xiamen Airlines is also achieving.

Asian airlines Change in ASKs W12 v W11

Source: SRS Analyser for January 2012 and January 2013

Of China’s big three airlines, Air China and China Southern are both looking at ASK growth of around 8%, but China Eastern is being more aggressive and is currently targeting 12% ASK growth this winter.


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