Intra-European system capacity set to rise +4.5% in summer 2018 – its slowest rate of growth since 2014

Ahead of the launch of the summer 2018 flight schedules later this month, The Blue Swan Daily analysis shows that intra-European capacity is expected to rise +4.5% versus summer 2017. This rate, based on preliminary flight schedules published by OAG, would represent a second successive summer with a slowing in the year-over-year growth rate; in fact it would represent the slowest rate of summer growth since 2014.

Since last summer we have seen a number of airline casualties, most noticeably the collapse of airberlin and Monarch Airlines and this will have influenced the numbers slightly, albeit much of their inventory has now been backfilled by other operators. It may show a natural consolidation within Europe as the market continues its maturity.

CHART – The intra-European market will grow to in excess of 750 million seats this coming summer, but the rate of growth forecast this year is less than half that recorded in 2016Source: The Blue Swan Daily and OAG

Despite the high profile airline failures in the second half of 2017, intra-European capacity still grew +6.8% year-over-year, down from the +9.4% growth recorded in 2016, but still the third fastest rate of growth this decade. Schedule data shows the market has remained resilient, and while the rates of growth may have declined they have remained above the +4% rate. In fact monthly year-over-year growth only fell below that level in Feb-2017 (+2.7%), but that is purely due to the leap year extra day in the month the previous year.

CHART – While growth may be slowing, the intra-European market appears to remain resilient despite airline failuresSource: The Blue Swan Daily and OAG

A closer look at the summer 2018 schedules highlights LCCs as the key driver of the additional intra-European system seats available this summer. Eurowings alone will be introducing an additional 11 million seats as Lufthansa Group continues to realign its activities following the collapse of airberlin. easyJet is adding an extra seven million seats, while Ryanair is introducing more than five million seats.

CHART – The ten largest intra-European operators together are expected to introduce an additional 39 million seats during summer 2018 with 19 airlines adding more than one million seats versus last summerSource: The Blue Swan Daily and OAG (data: as at 16-Mar-2018)

Among the Continent’s major airports it is Frankfurt in Germany that will see the largest increase in intra-European seat inventory in summer 2018, buoyed by its growing LCC sector. Its departure capacity is expected to be up +12.2% over the full summer 2018 schedule versus last year, a rate only exceeded by Moscow Sheremetyevo Airport (+19.4%) among the Top 20 airports in this market.

Double-digit rises are also expected at İzmir Adnan Menderes (+18.4%), Moscow Vnukovo (+16.8%),  Athens International (+16.2%), Helsinki (+14.3%), Ankara Esenboğa (+13.1%), Milan Malpensa (+12.6%), Antalya (+11.6%) when you look further down into the Top 50 airports.

Small declines are on the cards at Amsterdam Schiphol and London Heathrow where medium- and long-haul operations hold more value due to capacity constraints, but it is London Gatwick among the ten largest intra-European airports that currently will see the largest fall this summer as a legacy of the Monarch Airlines failure.

CHART – Strong leisure flows within Europe mean a number of smaller airports appear higher in the ranking of largest intra-European airports, but the hubs still dominate due to their important short-haul feedSource: The Blue Swan Daily and OAG

In terms of country markets Gibraltar will see the largest reduction in summer 2018 capacity (-30.4%), again a direct result of the Monarch Airlines failure, but otherwise almost all of Europe will see an uplift in intra-European capacity. Among the major markets, Russia (+9.6%) and Turkey (+8.9%) will continue to rebound after recent economic and political issues, while other stand out nations include Georgia (+34.7%), Armenia (+28.4%), Lithuania (+17.2%), Slovenia (+16.1%), Latvia (+15.9%), Malta (+13.9%), Finland (+13.5%) and Greece (+12.1%).