Europe aviation: 2020 hindsight and 2021 vision
According to OAG/CAPA, airline seat capacity in Europe fell by 57.7% in 2020. This was the biggest drop among all regions, pushing Europe from second to third place by total seat numbers (behind Asia Pacific and North America).
Early suggestions of a V-shaped recovery gave way to hopes of a U and then a W shape. In reality, there is no letter of the alphabet to describe the curve that is inscribing itself. The crisis has lasted longer than expected at the outset and will remain for months to come. The new strain of coronavirus spreading in the UK is a reminder that COVID-19 will continue to pose fresh challenges.
Nevertheless, 2021 offers hope. The UK, normally Europe’s biggest aviation market, was the first country in the world to approve and administer a COVID-19 vaccine. Many other European countries are now also beginning vaccination programmes.
As in 2020, a recovery led by domestic and other short haul markets and by VFR and leisure travel favours LCCs. They also (mostly) have better balance sheets and a more nimble approach to market entry and exit when demand fluctuates, as surely it will through 2021.
Summary:
- Europe’s airline capacity suffered more in 2020 than in any other region. Europe fell from second to third largest region by seats.
- In the first full week of 2021, Europe’s capacity is down 63% vs 2019. This is more than in any other world region. Traffic has underperformed vs capacity.
- Jan-2021 schedule projections suggest a capacity stabilisation in Europe, but further cuts are likely over the rest of winter 2020/2021.
- Vaccines give some grounds for cautious optimism; LCCs are best placed.