Spring Capacity Points to a Full Travel Recovery

It’s finally over. The IATA Winter Season has just a few more days to run and while the Southern Hemisphere may be seeing shorter days, for many markets the first signs of Spring are here and the first quarter of the year has passed by with little damage. 

There have been a few airline failures (skilled labour that will surely be picked up by other airlines) but generally, the last Winter Season has been one of the mildest for airline losses, and weather disruption. We can all now start to look forward to the next quarter... so how is it shaping up?

Global AIRLINE Capacity Exceeds Pre-Pandemic Levels 

It’s a bold statement and finally supported by fact (as the table below illustrates) with the second quarter of the year reaching 1.5 billion seats, 4% more than in 2019 and nearly 8% up on last year.

A strong 11% year-on-year growth in North East Asia allows the region to claim the top spot, ahead of North America, a move that is likely to be permanent as we settle back into the longer-term growth rates expected before the pandemic. And even in Western Europe, where there has been nothing less than a melt-down in the German market in recent years, total capacity this coming quarter will be ahead of the 2019 level and close to the global average growth mark year-on-year. Capacity across South America is once again on an upward trajectory with 16% more seats on sale across the upper half of the continent and close to 25% ahead of the Q2 2019 levels. 

Central Asia is perhaps proving that even the strongest growth markets need to pause for breath. The region is currently 36% larger than in Q2 2019 but only reports 3% capacity growth against last year. Such rapid growth rates are ultimately unsustainable and when one of the major carriers in the region - Air Astana - announces that 32 engine removals have been scheduled this year (due to the Pratt & Whitney engine issue) then it makes any growth even harder.

And sadly of course, airline capacity in Eastern Europe remains affected by the issues in Ukraine. While in Southern Africa - although there will be capacity growth in the coming quarter versus last year - replacing the likes of the old South African Airways network is a tough ask for any country. Both markets will in time come back strongly and in the case of Ukraine, we can only hope for sooner rather than later.

If President Biden is looking for positivity then he may want to jump on the US aviation market remaining the largest in the world with 310 million scheduled seats set for Q2, 6% up on last year and the 2019 level. For airlines that 6% growth may test the elasticity of demand with airfares higher than they have been for many years, is this finally the moment when capacity discipline begins to slip, and bargains can be had amongst some of the smaller low-cost carriers? It may just be that moment, especially to points such as Florida where capacity has increased by 19% compared to 2019 suggesting the mouse remains as popular as ever!

Across the top ten country markets, Germany and Japan stand out as the two markets continuing to lag 2019 levels. In Germany, changes in travel patterns, dramatic reductions in domestic capacity (-48% V’s 2019) and one of the slowest long-haul market recoveries post-pandemic explain the slip from 7th to 8th in the table. Meanwhile Japan with its reliance on capacity to and from China will be around 3.4 million seats lighter than in Q2 2019, operational challenges with Russian overflights for some airlines certainly are not helping Japan recover to historic levels as well. 

Despite remaining in the top ten airlines when measured by capacity, Delta Air Lines and easyJet have yet to exceed their Q2 2019 production levels; issues such as aircraft deliveries, additional maintenance, and engine checks are affecting airlines - and these two carriers are no exception to that rule. Reassuringly both did increase capacity compared to last year. American Airlines remains at the top of the table and strengthened their position compared to second-placed Delta Air Lines and a near 10% capacity increase this quarter over last year will see the airline adding more routes and frequency to Europe. 

Ryanair’s tried and trusted formula of never missing an opportunity to grow in moments of crisis has seen them steal a huge advantage on almost every European airline operating. The airline is now nearly 40% larger in capacity terms than in Q2 2019 with 16 million more seats on sale across the continent and shows no signs of a slowdown with 11% growth year-on-year. There may be some doubt and frustration in Ryanair at the pace of deliveries from Boeing but there are probably several other airline CEOs grateful for that slowdown, at least in the short-term.


And finally for those legacy airlines living with the final moment of denial about increasing low-cost airline growth then ignore the last table below! While legacy airline capacity still accounts for 65% of seat production that’s a fall from the 60% of Q2 2019 and legacy airline capacity remains below 2019 levels. For the low-cost airlines, inspired perhaps by Ryanair and a realisation that the patterns of travel are changing, some 16% capacity growth on Q2 2019 and 8% on last year, then factor in aircraft orders for these carriers and when they finally arrive their share of the market will get ever close to 40%.

Finally, we can probably stop making references back to 2019 and look forward to the new market opportunities, airlines and routes that will launch in the next year and beyond. Aviation survived the pandemic, it may have been a bit hairy at times, many are still recovering, and the loss of skilled workforces and experience will take years to be replaced. But, in nearly every corner of the world things are looking much better than for a very long time...unless you are waiting for a domestic flight in Germany of course!

  • Join our next Live Webinar on 15th May 2024| Register Now