ANALYSIS: November 2017 – European capacity insights for the month ahead

In the continuation of a regular new series, The Blue Swan Daily offers a capacity snapshot in time and looks at the month ahead to highlight some of the key network trends across Europe, the Middle East, Africa and from this month the South Pacific.

In the case of Europe, overall network capacity at the start of the month is up +6.0% in Nov-2017 versus the same month last year, the slowest monthly growth rate in 2017 with the exception of February, which was influenced by last year’s leap year. This is the second successive month with declining capacity growth versus 2016, but still sees overall departure capacity within and from Europe growing by 5.4 million seats to over 96 million. To put it into context that is an average of 180,000+ additional seats a day to a total of over 3.2 million per day.

CHART – Overall network capacity from Europe is up +6.0% for Nov-2017 versus the same month last year maintaining a positive performance trend for the year but perhaps highlighting the start of a declining rate trendSource: The Blue Swan Daily and OAG

This is the first month of the new winter schedules in Europe, which a start of season snapshot from CAPA – Centre for Aviation (see ‘A welcome winter? European capacity set to rise at highest rate this decade‘) shows will grow at the fastest rate this decade, up 7.2% in winter 2017/2018, versus the 5.7% rate recorded last winter.

The recent collapse of Monarch Airlines, airberlin, Belair, Vim Airlines will certainly impact capacity across the winter, but most observers believe that much of this will be backfilled by airlines over the coming months to some degree balancing any loss. Despite these failures, all in all 2017 has been a relatively stable year for capacity growth across Europe with monthly rates fluctuating between +6.4% and +7.9% (you can read 6.8% for Feb-2017 in real terms when accounting for last year’s leap year).

This month we look more closely at aircraft size in the European market and can clearly see that alongside increasing capacity we are also seeing a general upgauge in seats per departure. Across the first ten months of 2017 an average of 3.5 seats has been added to every European flight departure with this growth ranging from 2.4 seats in Oct-2017 up to 5.3 seats in Apr-2017.

The average aircraft size per departure during this period was 154.8 seats, up 2.3% from 151.3 seats in the same period in 2016.  Looking back to the start of the decade we see the clear development of this trend with average aircraft size up by more than a sixth.

CHART – The size of aircraft on flights within and from Europe has grown by a sixth since the start of the decade from 132 seats in 2010 to over 150 seats from 2016Source: The Blue Swan Daily and OAG

The arrival of larger capacity aircraft has obviously been part of this trend and the largest of them all – the A380 – is being used on an increasing number of flights from Europe both in the networks of domiciled operators such as Air France, British Airways and Lufthansa, but also airlines from outside the region, especially Emirates Airline.  However, the A380 accounts for less than one per cent of European departure capacity – in fact it is only 0.01%, according to OAG schedules.

There is also a general growth of long haul operations with widebodied aircraft such as the A330 (up 77.0% in European departure capacity between 2010 and 2017) and 777 (up 59.0%) plus new generation arrivals like the A350 and 787 driving this development. But, they still together only account for 8.1% of European departure capacity.

The main driver of this trend is actually the general growth of the industry , its maturity and the movement to larger aircraft on developing short haul routes, most noticeably from the likes of LCCs easyJet, Vueling and Wizz Air, but also among the legacy operators.

For example, A320 Family capacity in the European market has grown by a third from 386 million departing seats in 2010 to almost 585 million this year, boosting its share of capacity from 39.2% in 2010 to 44.4% this year. Likewise, 737 capacity has risen by a similar amount (37.0%) increasing to over 390 million departure seats, but maintaining around a 29% share.

When you look within the aircraft families you see the upgauge trend, particularly when you study the European type. Where individual aircraft variants can be identified from OAG schedules there has been a reduction since the middle of the decade in A318 and A319 departures with growth in both A320 and A321 operations; the latter growing at a much faster rate since 2015.

CHART – The larger versions of the A320 Family are accounting for an increasing share of flight departures from Europe than the two smallest variantsSource: The Blue Swan Daily and OAG

But, which countries in Europe have the largest and smallest average aircraft size per departure and which have seen the largest increase in average aircraft departure size? Well, Turkey leads the way (184.3 seats), ahead of Malta (176.9) and Cyprus (175.4) driven by leisure flows. Hungary (169.6) and the Netherlands (167.9) make up the rest of the ‘Top 5’ largest aircraft sizes. At the opposite end of the scale, Estonia (87.6), Slovenia (96.9), Luxembourg (107.6), Latvia (112.0) and Norway (116.4) have the smallest average aircraft size per departure.

The largest growth in average seat size per departure between 2010 and 2017 has been seen at the Faroe Islands (+56.9 seats) as local carrier Atlantic Airways has transitioned from an Avro RJ100 fleet to A320 Family variants. Elsewhere, Bosnia and Herzegovina (+54.0), the Former Yugoslav Republic of Macedonia (+52.6), Georgia (+50.6) and Hungary (+50.0) have all seen rises of more than 50 seats over the period.