This is a rough time for the world, and there are far more pressing humanitarian matters to be concerned about this week than aviation. We know that the airline industry will do everything possible at every level, from providing free tickets to transporting aid when it is safe and feasible. I’m sure OAG joins the rest of the aviation industry in praying for the thousands of individuals who have been impacted and for a quick resolution to this tragic situation.
This week’s blog presents a high-level look of global airline capacity adjustments; more insights will be provided as we learn more about the impact of sanctions on the industry.
This week, global capacity remained above 82 million seats, marking the fourth week in a row that the sector has supplied more than 80 million, indicating a strong foundation for future airline capacity expansion during the summer season. In the same week of 2019, 106 million seats were on sale, indicating that capacity remains 23% below what was once considered the normal level of airline capacity; however, things are improving, and more country markets are opening as travel restrictions in destinations such as Singapore, Malaysia, and the United Arab Emirates are eased.
For the next three months, airlines are continuing to expand capacity in numerous areas, indicating that the second quarter of the year will be quite robust. This is one of the most promising weeks for forward capacity increase in a long time, with an additional 7.1 million seats added in April and 9.1 million added in May. Of course, demand remains the most important metric for airlines around the world, and while rising oil prices may dampen demand in the coming months, we can only hope that pent-up demand will be unaffected by any fare hikes.
While worldwide airline capacity remains almost unchanged from last week, there is some fluctuation in regional numbers, however even here we are seeing greater stability. Lower South America has seen a 7% increase in week-on-week growth as the Brazilian market recovers from previous dips and the Southwest Pacific continues to recover, with New Zealand allowing more international flights, leaving only China and Japan as markets with major travel restrictions. North East Asia (-4.5%) and Eastern/Central Europe (-4.5%) are the two regional markets with weekly capacity reductions (-2.6 percent ).
In comparison to March 2019 weekly capacity, every regional market in the world now has at least 50% of capacity back online, with the exception of South East Asia and the Southwest Pacific, which are both continuing to ease restrictions and will improve their relative performance in the coming weeks.
Global top twenty country markets remain unchanged as they have done for a few weeks now, but as always there is some movement within the chart. Brazil for instance jumps above the United Kingdom on the back of an 11% increase in weekly seats.
This week’s top 20 airline rankings show no noteworthy changes. Four of the top five airlines are based in the United States, followed by Ryanair, which is now offering almost 11% more seats than in 2019, making them an unusual operator as the recovery continues. Indigo, the Indian low-cost carrier, is the other airline in the top 20 that is already running greater capacity than in 2019, and it is likely no accident that both airlines are market leaders in their respective geographic low-cost sectors. With operating costs rising and more low-cost capacity on the market, reclaiming capacity share in short-haul point-to-point markets will be extremely difficult for legacy airlines this summer.
