The reintroduction throughout the Uk of restrictions in Spain raises fears that restrictions will also occur elsewhere in Europe.
Meanwhile, Ryanair’s recent quarterly effects highlight two main discrepancies: between an airline’s schedule and its advertised capacity forecasts; and between the rate of capacity and demand recoil.
According to the schedules presented, Europe’s total capacity is 14.6 million seats for the week beginning july 27, 2020, starting in mid-March 2020. Annual relief of 60.3% is the lowest since mid-March.
Three regions have deeper cuts than Europe, while two recover faster. Latin America has the largest relief of 74.5%, followed by 71.5% relief in Africa and the minimum 68.6% in the Middle East. The number of seats was reduced by 56.1% in North America and by 42.0% in Asia-Pacific (it remains the only region with more than 50% of 2019 levels).
The capacity derived from the deposited times provides for the number of European places in 51% of the 2019 qualifications in August 2020 and 73% in September 2020. Even before the biggest barriers between the UK and Spain, not to mention the more widespread restrictions, these figures are ahead of capacity plans more likely and well above demand.
Summary
Total seats in Europe are expected to be 14.6 million in the week of July 27, 2020, according to OAG schedules combined with seating configurations in capa’s fleet database.
This is an increase of 3.5% per week, but 60.3% less than the 36.8 million seats in the same week a year ago in 2019.
This week’s total is divided by 5.4 million national seats, up from 7.8 million last year; 9.2 million foreign seats, at 28.9 million.
European domestic seats have fallen by 31.4% year-on-year (compared to -36.3% last week). This is now the fifth week in a row with a national level of more than 50% compared to last year.
International seats fell 68.1% (less than 71.3% per week).
The 60.3% annual relief in total seat numbers this week is the nineteenth week of giant double-digit descents (more than 50%) seats.
However, it is a decrease of 3.5 numbers that the decrease of 63.8% last week and the eighth consecutive week of discounts year after year to a decrease than last week.
Europe, once back, has the third narrowest cut among the regions of the world this week, for the fourth week in a row. This contrasts with the first few weeks of the crisis, when Europe suffered the high and severe cuts.
Seats have fallen by 74.5% in Latin America, making it the last region in the world with the most cuts. In recent weeks, Latin America has traded its position with Africa, whose number of seats has fallen by 71.5% this week.
The Middle East has fallen 68.6%, North America has fallen by 56.1% and Asia Pacific has fallen by 42.0%.
Asia-Pacific has now had 3 consecutive weeks at more than 50% of the year’s capacity.
Year-on-year relief rates in Asia-Pacific, Latin America and North America generally stabilized this week.
On the other hand, Europe, Africa and the Middle East are cutting their rate of relief and expansion year after year until last week.
The long-term trend of short-term programs cutting off during the week, shortly interrupted two weeks ago, continues this week.
At the end of July 2020, the capacity in question through the knowledge of schedules archived for the month was reduced by 68% year-on-year (compared to 65% projected last week).
As recently as late May 2020, capacity by July 2020 is expected to be reduced by only 9%, a representation of how network-building plans temporarily have very short-term.
Projected for August 2020 has shrunk by 7% since last week and is now expected to be 49% less than last year (compared to -45% projected last week).
The expected number of seats in September 2020 is 7% less than last week and is now expected to fall by 27% year-on-year (but this is still 73% of last year’s levels).
For the total of 3Q2020, the peak quarter of the year, the number of European seats derived from the schedules presented to the OAG is expected to be a decrease of 49% in the same quarter of 2019, or 51% from last year’s level.
Another representation of how the development of plans has in the very short term can be discovered in the corresponding capacity projections through the schedules for the first component of winter 2020/2021.
The capacity derived from the OAG’s November 2020 and December 2020 schedules is expected to decrease by only about 10% year-on-year. This has hardly changed from what was projected last week or any other week in the last two or three months.
In other words, European airlines have not even begun to adapt their schedules to the very small environment climb that is expected to last the winter season.
In some cases, schedules presented through airlines with the OAG even reflect their own commands on capacity plans.
Ryanair, Europe’s largest passenger airline, plans to increase last year’s capacity to 70% by September 2020, from 40% in July 2020 and 60% in August 2020.
However, the derivative of its deposited schedules lately projects 70% of last year’s degrees in August 2020 and 80% in September 2020 (and more than 90% in November 2020).
Ryanair does not expect to fill the capacity returned to the market. The load decreased through 35 emissions to 61% in the March-June 2020 quarter, when capacity was a small percentage at 2019 levels.
The July 2020 cargo has advanced to more than 70%, but is still well below 97% in July 2019.
Lately, Ryanair plans to bring in 60 million passengers in the year by March 2021, or 40% of its annual total a year earlier.
This extra highlights the gap between capacity recoil and demand retracement.
See similar report: the expansion of European airlines’ capacity is in sync with demand
Again, this underscores a recurring theme in CAPA’s research reports, namely that aviation recovery customers in Europe remain highly uncertain.
The perspective of adjustments to constraints, which have recently followed a trend of easing, is a fundamental and unpredictable variable.
After a build-up of COVID-19 cases reported in Spain, some European countries have once increased restrictions to/from Spain again.
As of 25 July 2020, the United Kingdom is requested to show that British citizens deserve to go not essentially to mainland Spain, just when the very short holiday season has gained momentum.
This recommendation was not first applied to the Spanish Canary Islands or Balearic Islands, where the incidence of coronavirus is lower than in the peninsula, but the United Kingdom included the islands 3 days later.
Travellers from all over Spain, adding islands, must complete 14 days of self-isolation upon returning to the UK.
The renewed restrictions were introduced less than a day in advance. The quarantine requirement applies to those who are already in Spain who will have to return after the change.
According to the knowledge of the Spanish Ministry of Industry, Energy and Tourism and the Institute of Statistics, the United Kingdom is the main source of tourists in the country.
In 2019, the UK had 18.1 million tourists in Spain, or 21.6% of the total. Germany is comfortably advancing, second, with 11.2 million visitors, 13.4% of the total, and France, thirdly, with 11.2 million visitors.
The UK-Spain is the largest pair of countries in Europe in terms of air seats, which means that the expansion of barriers to travel between the two countries can have a significant effect on overall European capacity.
See associated report: UK-Spain Aviation: LCC dominates a market
The re-importation of quarantine needs for travellers arriving in the Uk from Spain, and the opposite recommendation for non-essential travel to mainland Spain, are likely to have a negative effect on the request for air travel between the United Kingdom and Spain.
As a result, airlines’ capacity plans will also likely be reduced, those adjustments will be shortened.
Some travellers would likely be ready to meet the 14-day quarantine requirement when they return to the UK. As a result, airlines can keep schedules open for as long as possible, cancelling only short-term flights if the call is insufficient.
Hours are more likely to be reduced to mainland Spain, given the advice of the British government, if the restrictions remain in place for an extended period of time, but even this is not certain.
Airlines have been reluctant to cancel flights in which sales have been made, as they would then have to offer refunds to passengers.
They may also offer a new booking on other flights or coupons for long-term bookings, but passengers would be entitled to a refund, which would erode airline monetary positions.
TUI Group, Europe’s largest tour operator, has cancelled all public holidays for UK consumers to mainland Spain until 9 August 2020, but their island holidays will continue to work.
Ultra-LCC Ryanair, Europe’s largest airline by number of passengers, said its flights to/from Spain would continue as planned. British Airways and easyJet will also continue to operate their schedules for Spain.
LCC had Jet2.com stated first that it would continue its flights to Spain, but reversed this trend when the UK extended its recommendation not to do so to the whole country.
The fragmented and bilateral nature of restrictions on intra-European foreigners is also illustrated by France’s recent recommendation to its citizens who oppose the Spanish region of Catalonia and Norway’s resolve to impose 40 10 days on all arrivals from Spain.
Less than a month after intra-European outsiders have returned to something resembling normality, at least in terms of trimming restrictions (if not in terms of capacity or demand), uncertainty is rapidly expanding.
The scenario can be even more difficult. The number of coronavirus cases has recently taken an upward trajectory in several other European countries.
Among the major countries in Western Europe, the slippery seven-day numbers peak in Spain, but now they are also on a upward trend in France, Germany and the UK, while they are no longer falling in Italy.
This raises considerations that the UK can also potentially reintroduce quarantine needs for travellers from other parts of Europe besides Spain, and/or that other European countries would possibly seek to return to greater restrictions on a bilateral basis (whether they are members of the EU).
There have been reports of British consumers cancelling their holidays in European countries for fear of re-imposing quarantine restrictions.
On 17 July 2020, the first day since the reintroduction of restrictions on arrivals from Spain, the shares of European airlines fell from 5% to 10%.
This resurgent uncertainty will do nothing to rebuild consumer confidence in plans. This confidence remains important for the recovery of European aviation.
The reintroduction throughout the Uk of restrictions in Spain raises fears that restrictions will also occur elsewhere in Europe.
Meanwhile, Ryanair’s recent quarterly effects highlight two main discrepancies: between an airline’s schedule and its advertised capacity forecasts; and between the rate of capacity and demand recoil.
According to the schedules presented, Europe’s total capacity is 14.6 million seats for the week beginning july 27, 2020, starting in mid-March 2020. Annual relief of 60.3% is the lowest since mid-March.
Three regions have deeper cuts than Europe, while two recover faster. Latin America has the largest relief of 74.5%, followed by 71.5% relief in Africa and the minimum 68.6% in the Middle East. The number of seats was reduced by 56.1% in North America and by 42.0% in Asia-Pacific (it remains the only region with more than 50% of 2019 levels).
The capacity derived from the deposited times provides for the number of European places in 51% of the 2019 qualifications in August 2020 and 73% in September 2020. Even before the biggest barriers between the UK and Spain, not to mention the more widespread restrictions, these figures are ahead of capacity plans more likely and well above demand.
Summary
Total seats in Europe are expected to be 14.6 million in the week of July 27, 2020, according to OAG schedules combined with seating configurations in capa’s fleet database.
This is an increase of 3.5% per week, but 60.3% less than the 36.8 million seats in the same week a year ago in 2019.
This week’s total is divided by 5.4 million national seats, up from 7.8 million last year; 9.2 million foreign seats, at 28.9 million.
European domestic seats have fallen by 31.4% year-on-year (compared to -36.3% last week). This is now the fifth week in a row with a national level of more than 50% compared to last year.
International seats fell 68.1% (less than 71.3% per week).
The 60.3% annual relief in total seat numbers this week is the nineteenth week of giant double-digit descents (more than 50%) seats.
However, it is a decrease of 3.5 numbers that the decrease of 63.8% last week and the eighth consecutive week of discounts year after year to a decrease than last week.
Europe: year-over-year replacement in airline seating capacity, 1H – 2S2019 and weekly in 2020
Source: CAPA – Aviation Center, OAG.
Europe, once back, has the third narrowest cut among the regions of the world this week, for the fourth week in a row. This contrasts with the first few weeks of the crisis, when Europe suffered the high and severe cuts.
Seats have fallen by 74.5% in Latin America, making it the last region in the world with the most cuts. In recent weeks, Latin America has traded its position with Africa, whose number of seats has fallen by 71.5% this week.
The Middle East has fallen 68.6%, North America has fallen by 56.1% and Asia-Pacific has fallen by 42.0%.
Asia-Pacific has now had 3 consecutive weeks at more than 50% of the year’s capacity.
Percentage replacement in passenger seat across the region, week of July 27, 2020 compared to July 29, 2019
Source: CAPA – Aviation Center, OAG.
Year-on-year relief rates in Asia-Pacific, Latin America and North America generally stabilized this week.
On the other hand, Europe, Africa and the Middle East are cutting their rate of relief and expansion year after year until last week.
Year-over-year replacement percentage in passenger seats across the region, from the week of March 30, 2020 to the week of July 27, 2020
Source: CAPA – Aviation Center, OAG.
The trend of long-term schedules to be cut each passing week, shortly interrupted two weeks ago, continues this week.
At the end of July 2020, the capacity in question through knowledge of the archived timetable for the month was reduced by 68% year-on-year (up from the 65% projected last week).
As recently as it was in late May 2020, capacity by July 2020 is expected to shrink by just 9%, a representation of how network-building plans temporarily run very short-term.
Projected capacity for August 2020 is reduced by 7% last week and is now expected to be 49% less than last year (to -45% projected last week).
The number of seats expected in September 2020 is 7% less than last week and is now expected to fall by 27% year-on-year (but this is still 73% of last year’s levels).
For the total of 3Q2020, the peak quarter of the year, the number of European seats derived from the schedules presented to the OAG is expected to be a decrease of 49% in the same quarter of 2019, or 51% from last year’s level.
Another representation of how plans are very short-term can be discovered in the corresponding capacity projections through the timetables for early winter 2020/2021.
The capacity derived from the OAG’s November 2020 and December 2020 schedules is expected to decrease by only about 10% year-on-year. This has hardly changed from what was projected last week or any other week in the last two or three months.
In other words, European airlines have not even begun to adapt their schedules to the very small environment climb that is expected to last the winter season.
Europe: year-over-year replacement rate in airline seating capacity, with other dates
Note: Dotted lines involve long-term knowledge as expected on the implicit download date. Source: CAPA – Aviation Center, OAG.
In some cases, schedules presented through airlines with the OAG even reflect their own commands on capacity plans.
Ryanair, Europe’s largest passenger airline, plans to increase last year’s capacity to 70% by September 2020, from 40% in July 2020 and 60% in August 2020.
However, the derivative of its deposited schedules lately projects 70% of last year’s degrees in August 2020 and 80% in September 2020 (and more than 90% in November 2020).
Ryanair does not expect to fill the capacity returned to the market. The load decreased through 35 emissions to 61% in the March-June 2020 quarter, when capacity was a small percentage at 2019 levels.
The july-2020 cargo has advanced to more than 70%, but is still well below 97% in July-2019.
Lately, Ryanair plans to bring in 60 million passengers in the year by March 2021, or 40% of its annual total a year earlier.
This extra highlights the gap between capacity recoil and demand retracement.
View related report: European airlines’ capacity expansion is in sync with demand
Again, this underscores a recurring theme in CAPA’s research reports, namely that aviation recovery customers in Europe remain highly uncertain.
The perspective of adjustments to constraints, which have recently followed a trend of easing, is a fundamental and unpredictable variable.
After a build-up of COVID-19 cases reported in Spain, some European countries have once increased restrictions to/from Spain again.
Since 25 July 2020, the UK now advises non-essential citizens to travel to mainland Spain, just as the very short holiday season has gained momentum.
This recommendation was not first applied to the Spanish Canary Islands or Balearic Islands, where the incidence of coronavirus is lower than in the peninsula, but the United Kingdom included the islands 3 days later.
Travellers from all over Spain, adding islands, must complete 14 days of self-isolation upon returning to the UK.
The renewed restrictions were introduced less than a day in advance. The quarantine requirement applies to those who are already in Spain who will have to return after the change.
According to the knowledge of the Spanish Ministry of Industry, Energy and Tourism and the Institute of Statistics, the United Kingdom is the main source of tourists in the country.
In 2019, the UK had 18.1 million tourists in Spain, or 21.6% of the total. Germany is comfortably advancing, second, with 11.2 million visitors, 13.4% of the total, and France, thirdly, with 11.2 million visitors.
Spain: guest arrivals by country of origin, 2019
Source: CAPA – Aviation Center, Ministry of Industry, Energy and Tourism of Spain, Institute of Statistics
The UK-Spain is the largest pair of countries in Europe in terms of air seats, which means that the expansion of barriers to travel between the two countries can have a significant effect on overall European capacity.
See associated report: UK-Spain Aviation: LCC dominates a market
The re-importation of quarantine needs for travellers arriving in the UK from Spain, and the opposite recommendation for non-essential travel to mainland Spain, will likely have a negative effect on the need for air travel between the UK and Spain.
As a result, airlines’ capacity plans will also likely be reduced, those adjustments will be shortened.
Some travelers may be ready to meet the 14-day quarantine requirement when they return to the UK, so airlines can keep schedules open for as long as possible, canceling only short-term flights if the call is not enough.
Hours are more likely to be reduced to mainland Spain, given the advice of the British government, if the restrictions remain in place for an extended period of time, but even this is not certain.
Airlines have been reluctant to cancel flights in which sales have been made, as they would then have to offer refunds to passengers.
They may also offer a new booking on other flights or coupons for long-term bookings, but passengers would be entitled to a refund, which would erode airline monetary positions.
TUI Group, Europe’s largest tour operator, has cancelled the public holidays of all British customers in mainland Spain until 9 August 2020, but their island holidays will continue to work.
Ultra-LCC Ryanair, Europe’s largest airline by number of passengers, said its flights to/from Spain would continue as planned. British Airways and easyJet will also continue to operate their schedules for Spain.
LCC had Jet2.com stated first that it would continue its flights to Spain, but reversed this trend when the UK prolonged its decision not to travel the country.
The fragmented and bilateral nature of restrictions on intra-European foreigners is also illustrated by France’s recent recommendation to its citizens who oppose the Spanish region of Catalonia and Norway’s resolve to impose 40 10 days on all arrivals from Spain.
Less than a month after intra-European outsiders have returned to something resembling normality, at least in terms of trimming restrictions (if not in terms of capacity or demand), uncertainty is rapidly expanding.
The scenario can be even more difficult. The number of coronavirus cases has recently taken an upward trajectory in several other European countries.
Among the major countries in Western Europe, the slippery seven-day numbers peak in Spain, but are now also on a rising trend in France, Germany and the UK, while they are no longer falling in Italy.
This raises considerations that the UK can also potentially reintroduce quarantine needs for travellers from other parts of Europe besides Spain, and/or that other European countries would possibly seek to return to greater restrictions on a bilateral basis (whether they are members of the EU).
There have been reports of British consumers cancelling their holidays in European countries for fear of re-imposing quarantine restrictions.
On 17 July 2020, the first day since the reintroduction of restrictions on arrivals from Spain, the shares of European airlines fell from 5% to 10%.
This resurgent uncertainty will do nothing to rebuild consumer confidence in the plans. This confidence remains important for the recovery of European aviation.