[h=1]Europe summer 2017 airline capacity outlook: fifth successive summer of above trend seat growth[/h]
capa - premium
Airline seat growth from Europe in summer 2017 is set to stay at almost 6% for the third successive summer, according to data from OAG. This rate had not previously been reached since 2010, although this will be the fifth straight summer of growth ahead of its 10 year average rate. The summer 2017 season started on 26-Mar-2017 and, although always subject to further change, the data give a fairly clear picture.
Seat capacity on routes from Europe to Africa will grow the fastest, as the region recovers from a terrorism related drop in demand in North Africa. There will also be above trend growth in almost every other region from Europe (including intra Europe). The only exception is Europe-Middle East, where the newly cautious Gulf airlines' growth is slowing this summer.
On the North Atlantic, always important for the profitability of Europe's leading legacy airlines, growth will be faster than its 10 year trend, but it will at least be a little slower than in the past summer. The loss of market share from the immunised North Atlantic JVs to newer and smaller competitors, including LCCs, is set to continue. As ever, the OAG capacity data provide a window into the changing structure of the airline markets from Europe.
[h=2]Europe to all regions: seat growth of 6% in summer 2017 for third successive summer, highest rates since 2010[/h]According to data on flight schedules extracted from OAG's Schedule Analyser on 29-Mar-2017, total seat numbers flown by airlines from Europe to all regions will grow by 5.9% in the summer 2017 schedule, compared with summer 2016.
This fractionally outpaces the 5.7% growth rate of summer 2016 and the 5.8% growth of summer 2015. These three straight summers of approximately 6% growth in seat capacity outpace the compound average growth rate of 3.7% pa from summer 2007 to summer 2017.
This summer's 5.9% increase is the highest growth rate in summer seat capacity since 2010, when it reached 6.4% following a contraction of 4.5% in 2009 (the only decrease in the past 10 summer seasons).
Summer 2017's seat growth will be slightly slower than the 6.5% increase recorded for winter 2016/2017, although that was the highest winter rate since 2007/2008 (when it was 7.9%).
(Note that all growth rates have been adjusted to remove any distortion resulting from unequal season lengths from one year to the next).
[h=2]Africa is fastest growing region from Europe in summer 2017[/h]By region, the fastest seat growth from Europe this summer will be to Africa, with an 11.4% increase, compared with a 10 year CAGR of 3.7% pa. This reflects a bounceback in Europe-North Africa, where seat numbers will grow by 14.1%, after capacity cuts last year in response to terrorist events.
The second fastest growing region for seats from Europe this summer will be the Middle East, although the 7.5% increase is significantly slower than the 11.1% CAGR to the region for the past 10 summers.
The Middle East had previously been the fastest growing region from Europe for every summer since 2012, but the three big Gulf airlines and Turkish Airlines are all scaling back their growth this year.
Growth in scheduled airline seats from Europe to region indicated summer 2017 versus summer 2016 and compound annual average: 2007 to 2017
Source: CAPA - Centre for Aviation, OAG Schedules Analyser.
Growth in seat capacity from Europe to all the other regions this summer will outpace its 10 year CAGR. Latin America seat capacity will be up by 7.3% (versus 10 year CAGR 4.3%); North America capacity growth will be 6.6% (CAGR 2.8%); Asia Pacific growth will be the slowest at 5.1% (CAGR 3.7%) and intra Europe seat numbers will increase by 5.7% (CAGR 3.6%).
Intra Europe growth and growth to Latin America will be broadly similar to their rates of the past summer. Growth to North America will be 1ppt slower than in summer 2016, and growth to Asia Pacific will be 3.4ppts faster than last summer.
Growth in scheduled airline seats from Europe to region indicated summer: 2007 to 2017
Source: CAPA - Centre for Aviation, OAG Schedules Analyser.
[h=2]Lufthansa Group is Europe's biggest by seats, thanks to Brussels acquisition[/h]The chart below shows the top 20 airline groups in Europe, ranked by their share of total seats from Europe to all regions this summer. These 20 groups will operate 78.2% of all seats to/from/in Europe this winter (compared with 79.0% in winter 2016/2017 and 78.4% in summer 2016).
Collectively, the top 20 will grow seat capacity by 5.7% year-on-year in winter 2016/2017, almost matching total market growth of 5.9% in seats from Europe to all regions.
Those outside the top 20 groups, controlling the remaining 21.8% of seats, will grow a little faster at 6.7% this summer. In aggregate, low cost airlines to/from/in Europe will maintain the 11%-12% seat growth of the past three seasons.
The top five airline groups by seats this summer continue to be Europe's three largest legacy airline groups and the two leading LCCs. Lufthansa Group's leadership over Ryanair (just) is due to its Jan-2017 acquisition of Brussels Airlines.
In order of seat capacity in summer 2017, the top five are the Lufthansa Group (11.7% of seats), Ryanair (10.2%), IAG (9.4%), Air France-KLM (7.5%) and easyJet (6.8%).
They are closely followed by sixth ranked Turkish Airlines (5.5% of seats), but there is then a gap to number seven Aeroflot Group (3.5% of seats) and equal eighth ranked SAS and Norwegian (both with 2.9% of seats).
The top 10 of European airline groups by seats in summer 2017 is completed by Air Berlin Group and Wizz Air (both with 2.3% of seats), thanks to the former's shrinkage and the latter's growth.
See related reports:
****Please insert link to Airberlin report if published****
Wizz Air: fastest growing top 20 European airline group keeps Ryanair at bay on E/C Europe-W Europe
Europe to all regions: Top 20 airline groups by share of scheduled seats summer 2017 and their seat growth versus summer 2016
Notes: growth rate for Lufthansa Group includes Brussels Airlines in prior year; Air Berlin Group includes airberlin, NIKI and Belair Airlines.
Source: CAPA - Centre for Aviation, OAG Schedules Analyser.
[h=2]Air Berlin Group, Alitalia, Aegean cutting capacity; Jet2.com is fastest growing[/h]Alongside Air Berlin Group's capacity cut, Alitalia and Aegean Airlines Group are also lowering their seat count this summer, while SAS is holding capacity at last summer's level. Turkish Airlines and Pegasus Airlines are limiting their seat growth to low single digit rates, reflecting muted demand in the Turkey market.
See related reports:
See related report: Jet2.com: seats at new Stansted base in summer 2017 exceed the entire network growth in summer 2016
In order of their growth rate, the others with double digit growth are Wizz Air (+21.4%), TAP Portugal (+15.8%), Aeroflot (+14.7%) and Norwegian (+11.2%).
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[h=2]Lufthansa Group is fastest growing among big three legacy groups[/h]Note that the Lufthansa Group's 8.1% increase is adjusted to include Brussels Airlines in the prior year data to give a like for like comparison, but this is still the fastest seat growth among Europe's big three legacy airline groups.
It is driven by rapid increases in seat numbers for its LCC Eurowings (+25.4%), which is the group's number two airline by seats this summer (combining OAG data for Eurowings and Germanwings, which both operate under the same brand). In addition, Austrian is growing by 12.2% and Brussels Airlines by 10.4%, while Lufthansa itself is growing by only 1.8% (SWISS' growth is 6.0%).
For Air France-KLM, growing by 4.9%, Air France is growing its seat numbers by only 1.6%, whereas KLM's growth is 11.0%. The LCC subsidiary Transavia is growing seat numbers by 5.5% this winter.
IAG's growth of 1.6% is the slowest among the big three legacy groups, with British Airways and LCC Vueling broadly flat year-on-year, Iberia growing at 5.5%, and Aer Lingus increasing seat numbers by 3.8% this summer.
[h=2]Intra Europe: 5.7% growth, led by LCCs[/h]Seats on routes within Europe represent 86.3% of the total number of seats operated from Europe in the summer 2017 schedule. Not surprisingly, therefore, the 5.7% growth rate on intra Europe is similar to that in the total market. It is also similar to the intra Europe growth rate of 5.9% in summer 2016 and a little slower than the 6.4% rate of winter 2016/2017.
Growth to Eastern/Central Europe, at 12.8%, will outpace that of routes to Western Europe, at 4.7%.
LCCs account for 40.6% of the scheduled seats recorded by OAG on intra Europe routes for summer 2017 – up from 38.4% in summer 2016. LCC seat growth will be 11.6% year-on-year, while growth will be just 2.0% for all other airlines in aggregate.
The top 20 groups by seats within Europe control 83.9% of capacity this summer, a higher share than the top 20 by seats from Europe to all regions.
The five fastest growing airline groups by seats within Europe closely mirror the five with the highest growth in all markets. They are Jet2.com (growth of 45.2%), Wizz Air (+21.1%), TAP Portugal (+15.6%), Aeroflot (+15.3%) and Norwegian (+9.6%).
Europe to Europe: Top 20 airline groups by share of scheduled seats summer 2017 and their seat growth versus summer 2016
Notes: growth rate for Lufthansa Group includes Brussels Airlines in prior year; Air Berlin Group includes airberlin, NIKI and Belair Airlines.
Source: CAPA - Centre for Aviation, OAG Schedules Analyser.
[h=2]North Atlantic: growth to stay above long term trend, stimulated by LCCs and smaller participants[/h]Europe to North America is the most important intercontinental market by seats from Europe, accounting for 4.1% of the total in the summer 2017 schedule, according to the data from OAG.
Growth in this market is set to ease back to 6.6% this summer from 7.6% in summer 2016, but this is slightly faster than the growth rate of 6.2% in winter 2016/2017, and ahead of its 10 year trend rate.
The top 20 airline groups in this market operate a combined share of 94.5% of seats, making it more concentrated than all the other regional markets from Europe, with the exception of the much smaller Europe-Latin America.
Five airline groups have a seat share of around 10% or more this summer, of which two are European and three are from the US (see chart below). IAG is the leading group, with 12.6% of seats, followed by Delta (11.3% of seats), Lufthansa Group (11.4%), United (9.7%) and American (9.6%).
However each of the top five is losing share, and collectively, the top five's share of seats is falling from 57.1% in summer 2016 to 54.6% in summer 2017. With this top five three more legacy groups can be included: namely Air France-KLM, Air Canada and Virgin Atlantic.
Among this top eight, mainly representing traditional business models, only two are growing seat numbers on the North Atlantic by more than 4% this summer. Air France-KLM will grow by 5.3% and Air Canada by 9.6%. In the past summer many of the leading groups grew more aggressively.
The three immunised JVs within the three global alliances continue to control a large majority of seats on the North Atlantic, but their combined share continues to be eroded. Collectively, the three will have 68.8% of seats between Europe and North America this summer, reduced from 71.7% in summer 2016, as they grow more slowly than the market.
Adding in Virgin Atlantic's capacity, which is in a separate JV with Delta, the total share of seats that is in immunised joint ventures is 73.2% in summer 2017, versus 76.5% in summer 2016. JV seat numbers will grow by only 1.9%.
The JV within the Star Alliance (Lufthansa Group excluding Eurowings, United, Air Canada) will increase seat numbers by 2.1%, but its share of seats will fall from 29.1% last summer to 27.9% this summer. The Oneworld JV (IAG excluding Aer Lingus, American, Finnair) will grow by 1.7%, but its seat share will drop from 21.2% to 20.2%. SkyTeam's immunised JV (Air France-KLM, Delta, Alitalia) will grow by 2.8% and its seat share will dip from 21.4% to 20.6%.
Growth on the North Atlantic from airlines outside the JVs will be 21.9% this summer. LCCs will grow by 68.8% and increase their seat share from 3.0% in summer 2016 to 4.8% in summer 2017.
Norwegian is to increase its seat numbers by 67.3%, taking it into the top 10 on the North Atlantic in summer 2017, from number 12 in summer 2016. WOW Air will more than double its capacity (up by 125.7%).
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However, it is not only LCCs that are growing strongly outside the JVs on the North Atlantic. Airberlin is to add an additional 56.7% of seats (+26%) as its restructuring focuses the airline on long haul growth.
TAP Portugal will grow by 40.3%, Thomas Cook Group by 28.2, LOT Polish by 23.7%, Aeroflot by 15.6% and Icelandair by 12.4%. IAG's Irish subsidiary Aer Lingus will grow by 21.0% as it pursues its goal of being the leading North Atlantic "value carrier".
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Note: growth rate for Lufthansa Group includes Brussels Airlines in prior year.
Source: CAPA - Centre for Aviation, OAG Schedules Analyser,
[h=2]Europe-Asia Pacific: growth accelerates to 5.1%[/h]Asia Pacific accounts for 2.7% of all seats from Europe in the summer 2017 schedule. The top 20 airline groups in the market from Europe to Asia Pacific control 80.2% of seats. This market is set to increase seat numbers by 5.1% in summer 2017, accelerating from 1.7% growth in the past summer and similarly to the 5.3% increase of winter 2016/2017.
European airline groups occupy the top four places in this market: Lufthansa Group (11.0% of seats), Air France-KLM (8.7%), Turkish Airlines (8.4%) and Aeroflot Group (6.7%). Fifth place will be taken this summer by Air China (5.0% of seats), thanks to its 10.7% seat growth to Europe. This pushes IAG (4.9%) into sixth place (it ranked number five in the past summer).
(Note that Aeroflot Group's domestic capacity in Russia's far east that is classified as being in North East Asia is excluded from this analysis).
With the exception of Aeroflot, which will increase seat numbers by 5.8%, the leading European groups are barely growing this summer on Europe-Asia (see chart below). Lufthansa Group's growth will be 1.3%, Air France-KLM will cut seats by 0.3%, Turkish Airlines will grow by 2.2% and IAG will cut by 2.8%
The leading Asian airline groups – Thai Air, Singapore Airlines, Air China, Cathay Pacific, Air India – are also growing fairly cautiously. Among these, only Cathay is growing faster than the 5% market growth on Europe-Asia (it is increasing seats by 7%).
The fastest growing airline group in the top 20 on Europe to Asia this winter is the Russian airline Ural Airlines, growing at 46.3%, but its capacity is dominated by former Soviet Republics in Central Asia. The next fastest is China Eastern's growth of 22.1%, followed by Pakistan International's 14.7%, Jet Airways' 13.1% and Finnair's 11.5%.
See related report: Finnair accelerates capacity growth, led by long haul; seeks cost efficiency through fleet & labour
Air China is the only other top 20 operator with double digit seat growth between Europe and Asia Pacific this summer, but Cathay Pacific, Thai Air and Korean Air are all growing at close to 9%.
Singapore Airlines is cutting Europe-Asia seat numbers this winter.
Europe to Asia Pacific: Top 20 airline groups by share of scheduled seats summer 2017 and their seat growth versus summer 2016
Note: growth rate for Lufthansa Group includes Brussels Airlines in prior year.
Source: CAPA - Centre for Aviation, OAG Schedules Analyser.
[h=2]Europe-Middle East: super connectors dominate, but growth is slowing[/h]The Middle East accounts for 3.4% of all seats from Europe in the summer 2017 schedule. The top 20 airline groups between Europe and the Middle East have a combined seat share of 85.5% this summer, led by Emirates with 23.4% of seats in this market. This is the highest seat share for any operator in any market from Europe.
Ranked second is Qatar Airways, with 11.9% of seats, followed by Turkish Airlines, with 9.6%, and Etihad, with 6.3%. These four global super connectors continue to be important in this market, but their collective growth rate will be only 4.8% in summer 2017, versus 19.1% in summer 2016. The combined Europe-Middle East seat share of the four will be 51.2% in summer 2017, lowered from 52.6% last summer.
Qatar Airways will be the fastest growing among these leading players, with an increase of 9.9% this summer, followed by Etihad, which will grow by 6.2% on routes to Europe, having previously been the most cautious of the four (it is taking over airberlin's Abu Dhabi-Duesseldorf route this summer).
El Al, ranked fifth in this market, will grow its seat numbers between Europe and the Middle East by 6.2% this summer (although it is essentially in a different market, mainly point-to-point, with Israel at the end of the line).
The biggest European group on Middle East routes, the Lufthansa Group, is ranked sixth and will grow seat numbers by 6.7%, led by Austrian Airlines' 24.9% increase and Eurowings' 56.7% growth. IAG, ranked eighth, and Air France-KLM, ninth, are growing at double digit rates this summer in this market.
A number of other top 20 groups in this market are also growing at double digit rates this summer: Saudi Arabian Airlines, flydubai, Oman Air Pegasus, Aeroflot Group, Mahan Air, Israir, Wizz Air and Ukraine International.
Europe to Middle East: Top 20 airline groups by share of scheduled seats summer 2017 and their seat growth versus summer 2016
Note: growth rate for Lufthansa Group includes Brussels Airlines in prior year.
Source: CAPA - Centre for Aviation, OAG Schedules Analyser.
[h=2]Europe-Africa: bounce back after capacity cuts[/h]Routes from Europe to Africa account for 2.3% of total seats to/from/in Europe in winter 2016/2017. Total Europe-Africa seat capacity is set to increase by 11.4% this summer, accelerating the return to growth that started with an increase of 4.6% in winter 2016/2017.
There had been an 8.9% cut in the past summer and a 3.1% cut the previous winter as European airlines withdrew from routes to North Africa, as a result of terrorist events, particularly in Egypt.
The planned growth on Europe-Africa this winter is the biggest rate of increase of the past decade, a period that has included many capacity cuts in both summer and winter seasons.
The top 20 groups in this market have a joint share of seats of 90.1% this summer. They are led by Air France-KLM, with 14.5% of seats, followed by Royal Air Maroc, with 9.2%. Third placed Air Algérie has 8.4%, ahead of Tunisair on 6.7% and Turkish Airlines on 6.6%. Lufthansa Group is sixth, with 6.0%, just ahead of TUI Group on 5.9% and IAG on 5.8%. Ryanair, with 5.0%, and Egyptair, with 3.6%, complete the top 10.
Among the top 20 there will be double digit seat capacity growth on Europe-Africa this summer by a number of airlines, including the North African airlines Air Cairo, Air Algérie, Tunisair and Air Arabia Maroc, in addition to Ethiopian Airlines and South African Airways.
Among the European airlines, there will also be double digit growth from Lufthansa Group, TUI Group, Thomas Cook Group and TAP Portugal. SunExpress Deutschland will grow by a factor of 11 times.
EasyJet is still planning capacity cuts to Africa, mainly reflecting holiday destinations in Egypt.
Europe to Africa: Top 20 airline groups by share of scheduled seats summer 2017 and their seat growth versus summer 2016
Note: growth rate for Lufthansa Group includes Brussels Airlines in prior year.
Source: CAPA - Centre for Aviation, OAG Schedules Analyser.
[h=2]Europe-LatAm: seat growth to remain above 7%[/h]Latin America accounts for 1.2% of all seats from Europe this summer. On routes from Europe to Latin America, the top 20 airline groups control 95.9% of scheduled seats in the summer season of 2017. This reflects a higher level of concentration than in any other regional market from Europe (although this is also the smallest market by number of seats).
Seat numbers will be up by 7.3% on Europe-Latin America in summer 2017, almost matching last summer's 7.5% rate of increase and significantly faster than the 3.7% growth rate of summer 2015. However, it represents a modest easing in growth relative to the winter 2016/2017 rate of 8.0%.
European groups dominate this market, led by Air France-KLM (20.6% of seats), IAG (16.9%), leisure operator TUI Group (7.4%), the Lufthansa Group (7.0%) and Air Europa (6.5%). The highest placed Latin American group is LATAM, which is sixth with 5.8% of seats – fractionally ahead of TAP Portugal (5.6%).
The Thomas Cook Group is ranked at eight, the second leisure group in the top 10 (uniquely among the regions from Europe). The Top 10 is completed by Avianca and Air Caraïbes.
According to data from OAG, 10 of the top 20 airline groups in this market are growing seat numbers at double digit rates this summer (see chart below). These 10 are evenly divided between European and Latin American groups.
However, seven of the eight biggest operators are growing at single digit rates and five of these at low single digit rates. Much of the growth is coming from middle ranking airline groups.
Europe to Latin America: Top 20 airline groups by share of scheduled seats summer 2017 and their seat growth versus summer 2016
Note: growth rate for Lufthansa Group includes Brussels Airlines in prior year.
Source: CAPA - Centre for Aviation, OAG Schedules Analyser.
[h=2]Europe's capacity growth is consistently above long term sustainable rates[/h]LCCs continue to drive growth and to take market share on intra European routes, but are also having an increasing impact on long haul routes, most notably on the North Atlantic.
In addition, renewed growth from smaller legacy airlines and the leisure airlines owned by tour operators is providing a further challenge to the traditional dominance of the bigger legacy groups in Europe. At least on Middle East routes, the reining in of growth by the super connectors gives some respite to Europe's majors.
As ever, the data and analysis presented in this report come with the caveat that OAG schedules data is subject to change; airlines continually adjust their capacity plans.
That said, the available data partly alleviate concerns that capacity growth may have been accelerating. Total seat growth this summer is broadly the same as in the previous two summers.
Nevertheless, at close to 6% for three successive summers, compared with a 10 year average rate of less than 4%, capacity growth is consistently running ahead of what might be considered sustainable rates. It is no surprise that European airlines have been experiencing unit revenue weakness, and this looks set to continue in summer 2017.
[h=1]Europe summer 2017 airline capacity outlook: fifth successive summer of above trend seat growth[/h]
capa - premium
Airline seat growth from Europe in summer 2017 is set to stay at almost 6% for the third successive summer, according to data from OAG. This rate had not previously been reached since 2010, although this will be the fifth straight summer of growth ahead of its 10 year average rate. The summer 2017 season started on 26-Mar-2017 and, although always subject to further change, the data give a fairly clear picture.
Seat capacity on routes from Europe to Africa will grow the fastest, as the region recovers from a terrorism related drop in demand in North Africa. There will also be above trend growth in almost every other region from Europe (including intra Europe). The only exception is Europe-Middle East, where the newly cautious Gulf airlines' growth is slowing this summer.
On the North Atlantic, always important for the profitability of Europe's leading legacy airlines, growth will be faster than its 10 year trend, but it will at least be a little slower than in the past summer. The loss of market share from the immunised North Atlantic JVs to newer and smaller competitors, including LCCs, is set to continue. As ever, the OAG capacity data provide a window into the changing structure of the airline markets from Europe.
[h=2]Europe to all regions: seat growth of 6% in summer 2017 for third successive summer, highest rates since 2010[/h]According to data on flight schedules extracted from OAG's Schedule Analyser on 29-Mar-2017, total seat numbers flown by airlines from Europe to all regions will grow by 5.9% in the summer 2017 schedule, compared with summer 2016.
This fractionally outpaces the 5.7% growth rate of summer 2016 and the 5.8% growth of summer 2015. These three straight summers of approximately 6% growth in seat capacity outpace the compound average growth rate of 3.7% pa from summer 2007 to summer 2017.
This summer's 5.9% increase is the highest growth rate in summer seat capacity since 2010, when it reached 6.4% following a contraction of 4.5% in 2009 (the only decrease in the past 10 summer seasons).
Summer 2017's seat growth will be slightly slower than the 6.5% increase recorded for winter 2016/2017, although that was the highest winter rate since 2007/2008 (when it was 7.9%).
(Note that all growth rates have been adjusted to remove any distortion resulting from unequal season lengths from one year to the next).
[h=2]Africa is fastest growing region from Europe in summer 2017[/h]By region, the fastest seat growth from Europe this summer will be to Africa, with an 11.4% increase, compared with a 10 year CAGR of 3.7% pa. This reflects a bounceback in Europe-North Africa, where seat numbers will grow by 14.1%, after capacity cuts last year in response to terrorist events.
The second fastest growing region for seats from Europe this summer will be the Middle East, although the 7.5% increase is significantly slower than the 11.1% CAGR to the region for the past 10 summers.
The Middle East had previously been the fastest growing region from Europe for every summer since 2012, but the three big Gulf airlines and Turkish Airlines are all scaling back their growth this year.
Growth in scheduled airline seats from Europe to region indicated summer 2017 versus summer 2016 and compound annual average: 2007 to 2017
Source: CAPA - Centre for Aviation, OAG Schedules Analyser.
Growth in seat capacity from Europe to all the other regions this summer will outpace its 10 year CAGR. Latin America seat capacity will be up by 7.3% (versus 10 year CAGR 4.3%); North America capacity growth will be 6.6% (CAGR 2.8%); Asia Pacific growth will be the slowest at 5.1% (CAGR 3.7%) and intra Europe seat numbers will increase by 5.7% (CAGR 3.6%).
Intra Europe growth and growth to Latin America will be broadly similar to their rates of the past summer. Growth to North America will be 1ppt slower than in summer 2016, and growth to Asia Pacific will be 3.4ppts faster than last summer.
Growth in scheduled airline seats from Europe to region indicated summer: 2007 to 2017
Source: CAPA - Centre for Aviation, OAG Schedules Analyser.
[h=2]Lufthansa Group is Europe's biggest by seats, thanks to Brussels acquisition[/h]The chart below shows the top 20 airline groups in Europe, ranked by their share of total seats from Europe to all regions this summer. These 20 groups will operate 78.2% of all seats to/from/in Europe this winter (compared with 79.0% in winter 2016/2017 and 78.4% in summer 2016).
Collectively, the top 20 will grow seat capacity by 5.7% year-on-year in winter 2016/2017, almost matching total market growth of 5.9% in seats from Europe to all regions.
Those outside the top 20 groups, controlling the remaining 21.8% of seats, will grow a little faster at 6.7% this summer. In aggregate, low cost airlines to/from/in Europe will maintain the 11%-12% seat growth of the past three seasons.
The top five airline groups by seats this summer continue to be Europe's three largest legacy airline groups and the two leading LCCs. Lufthansa Group's leadership over Ryanair (just) is due to its Jan-2017 acquisition of Brussels Airlines.
In order of seat capacity in summer 2017, the top five are the Lufthansa Group (11.7% of seats), Ryanair (10.2%), IAG (9.4%), Air France-KLM (7.5%) and easyJet (6.8%).
They are closely followed by sixth ranked Turkish Airlines (5.5% of seats), but there is then a gap to number seven Aeroflot Group (3.5% of seats) and equal eighth ranked SAS and Norwegian (both with 2.9% of seats).
The top 10 of European airline groups by seats in summer 2017 is completed by Air Berlin Group and Wizz Air (both with 2.3% of seats), thanks to the former's shrinkage and the latter's growth.
See related reports:
****Please insert link to Airberlin report if published****
Wizz Air: fastest growing top 20 European airline group keeps Ryanair at bay on E/C Europe-W Europe
Europe to all regions: Top 20 airline groups by share of scheduled seats summer 2017 and their seat growth versus summer 2016
Notes: growth rate for Lufthansa Group includes Brussels Airlines in prior year; Air Berlin Group includes airberlin, NIKI and Belair Airlines.
Source: CAPA - Centre for Aviation, OAG Schedules Analyser.
[h=2]Air Berlin Group, Alitalia, Aegean cutting capacity; Jet2.com is fastest growing[/h]Alongside Air Berlin Group's capacity cut, Alitalia and Aegean Airlines Group are also lowering their seat count this summer, while SAS is holding capacity at last summer's level. Turkish Airlines and Pegasus Airlines are limiting their seat growth to low single digit rates, reflecting muted demand in the Turkey market.
See related reports:
- Alitalia: defying gravity again - another loss, another turnaround plan, maybe another last chance
- Aegean Airlines cuts capacity for first time since Olympic Air acquisition; 2016 margin falls
- Turkish Airlines: unprecedented loss provokes slowdown in expansion and int'l transfer strategy
- Pegasus Airlines: still galloping (just), but no longer flying high, as Turkey events slow demand
See related report: Jet2.com: seats at new Stansted base in summer 2017 exceed the entire network growth in summer 2016
In order of their growth rate, the others with double digit growth are Wizz Air (+21.4%), TAP Portugal (+15.8%), Aeroflot (+14.7%) and Norwegian (+11.2%).
See related reports:
- TAP Portugal transforms under new owners to tap potential; at forefront of narrowbody long haul
- Aeroflot Group's transformation: driven by strategic refocus, guided by the hand of Russian State
- Norwegian Air: 10 new North Atlantic routes enabled by new narrowbody aircraft and price stimulation
- Norwegian Air: long haul-led capacity acceleration & rising fuel price may expose margin fragility
[h=2]Lufthansa Group is fastest growing among big three legacy groups[/h]Note that the Lufthansa Group's 8.1% increase is adjusted to include Brussels Airlines in the prior year data to give a like for like comparison, but this is still the fastest seat growth among Europe's big three legacy airline groups.
It is driven by rapid increases in seat numbers for its LCC Eurowings (+25.4%), which is the group's number two airline by seats this summer (combining OAG data for Eurowings and Germanwings, which both operate under the same brand). In addition, Austrian is growing by 12.2% and Brussels Airlines by 10.4%, while Lufthansa itself is growing by only 1.8% (SWISS' growth is 6.0%).
For Air France-KLM, growing by 4.9%, Air France is growing its seat numbers by only 1.6%, whereas KLM's growth is 11.0%. The LCC subsidiary Transavia is growing seat numbers by 5.5% this winter.
IAG's growth of 1.6% is the slowest among the big three legacy groups, with British Airways and LCC Vueling broadly flat year-on-year, Iberia growing at 5.5%, and Aer Lingus increasing seat numbers by 3.8% this summer.
[h=2]Intra Europe: 5.7% growth, led by LCCs[/h]Seats on routes within Europe represent 86.3% of the total number of seats operated from Europe in the summer 2017 schedule. Not surprisingly, therefore, the 5.7% growth rate on intra Europe is similar to that in the total market. It is also similar to the intra Europe growth rate of 5.9% in summer 2016 and a little slower than the 6.4% rate of winter 2016/2017.
Growth to Eastern/Central Europe, at 12.8%, will outpace that of routes to Western Europe, at 4.7%.
LCCs account for 40.6% of the scheduled seats recorded by OAG on intra Europe routes for summer 2017 – up from 38.4% in summer 2016. LCC seat growth will be 11.6% year-on-year, while growth will be just 2.0% for all other airlines in aggregate.
The top 20 groups by seats within Europe control 83.9% of capacity this summer, a higher share than the top 20 by seats from Europe to all regions.
The five fastest growing airline groups by seats within Europe closely mirror the five with the highest growth in all markets. They are Jet2.com (growth of 45.2%), Wizz Air (+21.1%), TAP Portugal (+15.6%), Aeroflot (+15.3%) and Norwegian (+9.6%).
Europe to Europe: Top 20 airline groups by share of scheduled seats summer 2017 and their seat growth versus summer 2016
Notes: growth rate for Lufthansa Group includes Brussels Airlines in prior year; Air Berlin Group includes airberlin, NIKI and Belair Airlines.
Source: CAPA - Centre for Aviation, OAG Schedules Analyser.
[h=2]North Atlantic: growth to stay above long term trend, stimulated by LCCs and smaller participants[/h]Europe to North America is the most important intercontinental market by seats from Europe, accounting for 4.1% of the total in the summer 2017 schedule, according to the data from OAG.
Growth in this market is set to ease back to 6.6% this summer from 7.6% in summer 2016, but this is slightly faster than the growth rate of 6.2% in winter 2016/2017, and ahead of its 10 year trend rate.
The top 20 airline groups in this market operate a combined share of 94.5% of seats, making it more concentrated than all the other regional markets from Europe, with the exception of the much smaller Europe-Latin America.
Five airline groups have a seat share of around 10% or more this summer, of which two are European and three are from the US (see chart below). IAG is the leading group, with 12.6% of seats, followed by Delta (11.3% of seats), Lufthansa Group (11.4%), United (9.7%) and American (9.6%).
However each of the top five is losing share, and collectively, the top five's share of seats is falling from 57.1% in summer 2016 to 54.6% in summer 2017. With this top five three more legacy groups can be included: namely Air France-KLM, Air Canada and Virgin Atlantic.
Among this top eight, mainly representing traditional business models, only two are growing seat numbers on the North Atlantic by more than 4% this summer. Air France-KLM will grow by 5.3% and Air Canada by 9.6%. In the past summer many of the leading groups grew more aggressively.
The three immunised JVs within the three global alliances continue to control a large majority of seats on the North Atlantic, but their combined share continues to be eroded. Collectively, the three will have 68.8% of seats between Europe and North America this summer, reduced from 71.7% in summer 2016, as they grow more slowly than the market.
Adding in Virgin Atlantic's capacity, which is in a separate JV with Delta, the total share of seats that is in immunised joint ventures is 73.2% in summer 2017, versus 76.5% in summer 2016. JV seat numbers will grow by only 1.9%.
The JV within the Star Alliance (Lufthansa Group excluding Eurowings, United, Air Canada) will increase seat numbers by 2.1%, but its share of seats will fall from 29.1% last summer to 27.9% this summer. The Oneworld JV (IAG excluding Aer Lingus, American, Finnair) will grow by 1.7%, but its seat share will drop from 21.2% to 20.2%. SkyTeam's immunised JV (Air France-KLM, Delta, Alitalia) will grow by 2.8% and its seat share will dip from 21.4% to 20.6%.
Growth on the North Atlantic from airlines outside the JVs will be 21.9% this summer. LCCs will grow by 68.8% and increase their seat share from 3.0% in summer 2016 to 4.8% in summer 2017.
Norwegian is to increase its seat numbers by 67.3%, taking it into the top 10 on the North Atlantic in summer 2017, from number 12 in summer 2016. WOW Air will more than double its capacity (up by 125.7%).
See related reports:
- Norwegian Air: 10 new North Atlantic routes enabled by new narrowbody aircraft and price stimulation
- Iceland’s WOW Air to expand rapidly in 2017, pushing up LCC penetration on the trans-Atlantic
However, it is not only LCCs that are growing strongly outside the JVs on the North Atlantic. Airberlin is to add an additional 56.7% of seats (+26%) as its restructuring focuses the airline on long haul growth.
TAP Portugal will grow by 40.3%, Thomas Cook Group by 28.2, LOT Polish by 23.7%, Aeroflot by 15.6% and Icelandair by 12.4%. IAG's Irish subsidiary Aer Lingus will grow by 21.0% as it pursues its goal of being the leading North Atlantic "value carrier".
See related reports:
- Aer Lingus part 1: N Atlantic has led growth. Taken over as IAG's star after first full year
- Aer Lingus part 2: vies with Icelandair, airberlin, Norwegian as leading Nth Atlantic value carrier
Note: growth rate for Lufthansa Group includes Brussels Airlines in prior year.
Source: CAPA - Centre for Aviation, OAG Schedules Analyser,
[h=2]Europe-Asia Pacific: growth accelerates to 5.1%[/h]Asia Pacific accounts for 2.7% of all seats from Europe in the summer 2017 schedule. The top 20 airline groups in the market from Europe to Asia Pacific control 80.2% of seats. This market is set to increase seat numbers by 5.1% in summer 2017, accelerating from 1.7% growth in the past summer and similarly to the 5.3% increase of winter 2016/2017.
European airline groups occupy the top four places in this market: Lufthansa Group (11.0% of seats), Air France-KLM (8.7%), Turkish Airlines (8.4%) and Aeroflot Group (6.7%). Fifth place will be taken this summer by Air China (5.0% of seats), thanks to its 10.7% seat growth to Europe. This pushes IAG (4.9%) into sixth place (it ranked number five in the past summer).
(Note that Aeroflot Group's domestic capacity in Russia's far east that is classified as being in North East Asia is excluded from this analysis).
With the exception of Aeroflot, which will increase seat numbers by 5.8%, the leading European groups are barely growing this summer on Europe-Asia (see chart below). Lufthansa Group's growth will be 1.3%, Air France-KLM will cut seats by 0.3%, Turkish Airlines will grow by 2.2% and IAG will cut by 2.8%
The leading Asian airline groups – Thai Air, Singapore Airlines, Air China, Cathay Pacific, Air India – are also growing fairly cautiously. Among these, only Cathay is growing faster than the 5% market growth on Europe-Asia (it is increasing seats by 7%).
The fastest growing airline group in the top 20 on Europe to Asia this winter is the Russian airline Ural Airlines, growing at 46.3%, but its capacity is dominated by former Soviet Republics in Central Asia. The next fastest is China Eastern's growth of 22.1%, followed by Pakistan International's 14.7%, Jet Airways' 13.1% and Finnair's 11.5%.
See related report: Finnair accelerates capacity growth, led by long haul; seeks cost efficiency through fleet & labour
Air China is the only other top 20 operator with double digit seat growth between Europe and Asia Pacific this summer, but Cathay Pacific, Thai Air and Korean Air are all growing at close to 9%.
Singapore Airlines is cutting Europe-Asia seat numbers this winter.
Europe to Asia Pacific: Top 20 airline groups by share of scheduled seats summer 2017 and their seat growth versus summer 2016
Note: growth rate for Lufthansa Group includes Brussels Airlines in prior year.
Source: CAPA - Centre for Aviation, OAG Schedules Analyser.
[h=2]Europe-Middle East: super connectors dominate, but growth is slowing[/h]The Middle East accounts for 3.4% of all seats from Europe in the summer 2017 schedule. The top 20 airline groups between Europe and the Middle East have a combined seat share of 85.5% this summer, led by Emirates with 23.4% of seats in this market. This is the highest seat share for any operator in any market from Europe.
Ranked second is Qatar Airways, with 11.9% of seats, followed by Turkish Airlines, with 9.6%, and Etihad, with 6.3%. These four global super connectors continue to be important in this market, but their collective growth rate will be only 4.8% in summer 2017, versus 19.1% in summer 2016. The combined Europe-Middle East seat share of the four will be 51.2% in summer 2017, lowered from 52.6% last summer.
Qatar Airways will be the fastest growing among these leading players, with an increase of 9.9% this summer, followed by Etihad, which will grow by 6.2% on routes to Europe, having previously been the most cautious of the four (it is taking over airberlin's Abu Dhabi-Duesseldorf route this summer).
El Al, ranked fifth in this market, will grow its seat numbers between Europe and the Middle East by 6.2% this summer (although it is essentially in a different market, mainly point-to-point, with Israel at the end of the line).
The biggest European group on Middle East routes, the Lufthansa Group, is ranked sixth and will grow seat numbers by 6.7%, led by Austrian Airlines' 24.9% increase and Eurowings' 56.7% growth. IAG, ranked eighth, and Air France-KLM, ninth, are growing at double digit rates this summer in this market.
A number of other top 20 groups in this market are also growing at double digit rates this summer: Saudi Arabian Airlines, flydubai, Oman Air Pegasus, Aeroflot Group, Mahan Air, Israir, Wizz Air and Ukraine International.
Europe to Middle East: Top 20 airline groups by share of scheduled seats summer 2017 and their seat growth versus summer 2016
Note: growth rate for Lufthansa Group includes Brussels Airlines in prior year.
Source: CAPA - Centre for Aviation, OAG Schedules Analyser.
[h=2]Europe-Africa: bounce back after capacity cuts[/h]Routes from Europe to Africa account for 2.3% of total seats to/from/in Europe in winter 2016/2017. Total Europe-Africa seat capacity is set to increase by 11.4% this summer, accelerating the return to growth that started with an increase of 4.6% in winter 2016/2017.
There had been an 8.9% cut in the past summer and a 3.1% cut the previous winter as European airlines withdrew from routes to North Africa, as a result of terrorist events, particularly in Egypt.
The planned growth on Europe-Africa this winter is the biggest rate of increase of the past decade, a period that has included many capacity cuts in both summer and winter seasons.
The top 20 groups in this market have a joint share of seats of 90.1% this summer. They are led by Air France-KLM, with 14.5% of seats, followed by Royal Air Maroc, with 9.2%. Third placed Air Algérie has 8.4%, ahead of Tunisair on 6.7% and Turkish Airlines on 6.6%. Lufthansa Group is sixth, with 6.0%, just ahead of TUI Group on 5.9% and IAG on 5.8%. Ryanair, with 5.0%, and Egyptair, with 3.6%, complete the top 10.
Among the top 20 there will be double digit seat capacity growth on Europe-Africa this summer by a number of airlines, including the North African airlines Air Cairo, Air Algérie, Tunisair and Air Arabia Maroc, in addition to Ethiopian Airlines and South African Airways.
Among the European airlines, there will also be double digit growth from Lufthansa Group, TUI Group, Thomas Cook Group and TAP Portugal. SunExpress Deutschland will grow by a factor of 11 times.
EasyJet is still planning capacity cuts to Africa, mainly reflecting holiday destinations in Egypt.
Europe to Africa: Top 20 airline groups by share of scheduled seats summer 2017 and their seat growth versus summer 2016
Note: growth rate for Lufthansa Group includes Brussels Airlines in prior year.
Source: CAPA - Centre for Aviation, OAG Schedules Analyser.
[h=2]Europe-LatAm: seat growth to remain above 7%[/h]Latin America accounts for 1.2% of all seats from Europe this summer. On routes from Europe to Latin America, the top 20 airline groups control 95.9% of scheduled seats in the summer season of 2017. This reflects a higher level of concentration than in any other regional market from Europe (although this is also the smallest market by number of seats).
Seat numbers will be up by 7.3% on Europe-Latin America in summer 2017, almost matching last summer's 7.5% rate of increase and significantly faster than the 3.7% growth rate of summer 2015. However, it represents a modest easing in growth relative to the winter 2016/2017 rate of 8.0%.
European groups dominate this market, led by Air France-KLM (20.6% of seats), IAG (16.9%), leisure operator TUI Group (7.4%), the Lufthansa Group (7.0%) and Air Europa (6.5%). The highest placed Latin American group is LATAM, which is sixth with 5.8% of seats – fractionally ahead of TAP Portugal (5.6%).
The Thomas Cook Group is ranked at eight, the second leisure group in the top 10 (uniquely among the regions from Europe). The Top 10 is completed by Avianca and Air Caraïbes.
According to data from OAG, 10 of the top 20 airline groups in this market are growing seat numbers at double digit rates this summer (see chart below). These 10 are evenly divided between European and Latin American groups.
However, seven of the eight biggest operators are growing at single digit rates and five of these at low single digit rates. Much of the growth is coming from middle ranking airline groups.
Europe to Latin America: Top 20 airline groups by share of scheduled seats summer 2017 and their seat growth versus summer 2016
Note: growth rate for Lufthansa Group includes Brussels Airlines in prior year.
Source: CAPA - Centre for Aviation, OAG Schedules Analyser.
[h=2]Europe's capacity growth is consistently above long term sustainable rates[/h]LCCs continue to drive growth and to take market share on intra European routes, but are also having an increasing impact on long haul routes, most notably on the North Atlantic.
In addition, renewed growth from smaller legacy airlines and the leisure airlines owned by tour operators is providing a further challenge to the traditional dominance of the bigger legacy groups in Europe. At least on Middle East routes, the reining in of growth by the super connectors gives some respite to Europe's majors.
As ever, the data and analysis presented in this report come with the caveat that OAG schedules data is subject to change; airlines continually adjust their capacity plans.
That said, the available data partly alleviate concerns that capacity growth may have been accelerating. Total seat growth this summer is broadly the same as in the previous two summers.
Nevertheless, at close to 6% for three successive summers, compared with a 10 year average rate of less than 4%, capacity growth is consistently running ahead of what might be considered sustainable rates. It is no surprise that European airlines have been experiencing unit revenue weakness, and this looks set to continue in summer 2017.
[h=1]Europe summer 2017 airline capacity outlook: fifth successive summer of above trend seat growth[/h]