The analysis, titled ‘Europe summer 2018 airline capacity growth still above 10y average’, notes that while seat number growth is down on previous years at 5.2% for summer 2018, versus 6.2% in summer 2017 and will be the slowest summer growth rate since 2014, it remains above the ten year average of 3.9% for the fifth consecutive year.
The dark clouds from the collapse of major carriers airberlin and Monarch Airlines last year are clearing as other airlines have backfilled what they foresee as the profitable capacity, and while further consolidation is on the cards – either through bankruptcy or mergers - the industry is currently in a positive state of mind. But numerous storms are brewing, none more so than Brexit, which continues to provide an air of uncertainty and cast a shadow over development plans across the Continent.
The CAPA report highlights that the developing Central and Eastern markets will grow faster than the more mature western European market; Europe to Africa will be the fastest growing geographical market, but growth will also be above trend to every other region from Europe (including intra-Europe), with Europe-Middle East the only exception (but still delivering a healthy rate of growth).
Europe’s major airlines are also growing in strength, claims the report, thanks in part to many picking up pieces of the collapsed airberlin and Monarch Airlines networks. The top 20 airline groups ranked by their share of total seats from Europe to all regions this summer will have a 78.3% of all seats to/from/in Europe this summer (up from 76.3% in summer 2017) and will grow seat capacity by 8.0% year-on-year – faster than the market growth of 5.2%.
LCCs Jet2.com and Wizz Air are the fastest-growing European airline groups, while Air Europa, Finnair, TAP Air Portugal, easyJet, Aeroflot Group and Lufthansa Group are also growing at double-digit rates. Interestingly, the report highlights that Wizz Air has now broken into the top ten European airlines for the first time in a summer season and Norwegian has overtaken its Scandinavian legacy rival SAS in terms of capacity offering for the first time (it was already ‘larger’ than its rival by traffic due to its higher passenger load factor).
The detailed analysis highlights many developing trends impacting Europe, but clearly shows that growth is LCC-led in most markets, and should therefore “be more sustainable than if it were not so”. Nevertheless, it warns “Europe's airlines must remain vigilant to the risks of overcapacity, as competition intensifies”.
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