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Europe’s Economic Malaise Reflected In October Airline Capacity, Says OAG

Aviation - 8th October 2012

Asia Pacific’s Economic Confidence Sees Intra-Regional Air Traffic
Power Ahead

Luton, October 8, 2012: The continued weakness of European economic recovery is evident in a further decline in regional and long-haul flights and seat capacity in October, according to the latest statistics from OAG, the market leader in flight schedule data.

The OAG FACTS (Frequency and Capacity Trend Statistics) report for October 2012 reveals that flight operations and seats within Europe are expected to drop by 3% and 1% respectively versus October 2011, resulting in 18,000 fewer flights and 1m fewer seats. The picture is similarly depressed in long-haul air travel between Europe and other regions, which is expected to show 1% reductions in flights (1,500 fewer) and seats (138,000 fewer) compared to the previous year. Capacity within the European Union will show the greatest reductions in Europe, with 21,000 fewer flights and 1.9m fewer seats.

Low-cost carriers (LCCs) within Europe will show an 8% reduction in flights and seats, driven mainly by reductions in domestic and international capacity in Germany and Italy and significant reductions in Spanish international seat capacity.

Rob Shaw, director of analytics at OAG, says: “As Europe’s political and business leaders await the impact of Spain’s austerity programme and potential economic bailout request, air travel statistics show the region is holding its breath. Flight operations and seat capacity within Europe remain locked in gradual decline compared to a year before, with a similar picture apparent for long-haul travel between Europe and other regions. October’s figures reflect sharp reductions in Spanish international seat capacity, but all domestic markets in the EU’s largest countries, excepting France, will show capacity reductions.

“The picture in North America is similarly weak, providing an uncertain backdrop for the forthcoming US presidential elections. Although seat capacity within North America should show a modest 1% increase in October versus the year before, the number of flight operations will in fact be down 1%, meaning 5,900 fewer flights. Seat capacity growth therefore appears to reflect changes in carriers’ fleet composition rather than signs of returning economic confidence.”

Asia Pacific growth continues

In contrast to the mature economies of Europe and North America, air travel within the Asia Pacific region continues to grow strongly. In October 2012, OAG forecasts a 5% increase in flights (an extra 30,000) and a 6% increase in seat capacity (an additional 6.2m). Within the region, LCCs will continue to expand aggressively, adding 25,000 more flights and 5m more seats compared to a year before, rises of 19% and 26% respectively.

Shaw says: “The rapid growth of air travel within Asia Pacific clearly reflects the region’s confidence and buoyant economic activity. Long-haul travel to and from the region is also growing but far more gradually, with a 1% increase in flight operations and seat capacity. The heat of Asia’s economic engine is clearly to be felt mainly within the region.

“Low-cost carriers continue to expand within Asia Pacific at an exponential rate. Singapore Airlines’ 2012 launch of low-cost subsidiary Scoot is seen as a defensive measure against the encroachment of low-cost competitors and, for example, the record-breaking Boeing 737 fleet order by Indonesia’s Lion Air shows LCCs see plenty of further growth opportunities. There is no sign of this rate of growth declining.”

Global highlights

Scheduled airline flights are expected to increase globally by 0.3% in October 2012 versus October 2011 (8,000 more), with seat capacity 2% higher (6.4m more). The total number of scheduled flights operating in October will be 2.7m, with 343.6m seats offered.

Seat capacity performance at the top 10 global hubs will be mixed in October, with most recording increases in frequency, except Heathrow (LHR), Paris (CDG) and Los Angeles (LAX). These three will see a 1% reduction in seats and a 2-4% decrease in frequency. Dubai (DXB) will be the seventh largest hub by seat capacity, up from 11th in October 2011.

For the year to date (January-October 2012), scheduled flights are expected to show growth of 1% versus the same period last year, an increase of 333,000 flights. Seat capacity is expected to grow by 3%, creating 99 million additional seats in the period.

An executive summary of OAG FACTS October report is available here.