Hong Kong fully removed its strict border restrictions on 13th December 2022, and its mask mandate on 1st March 2023 - one of the last territories in the world to do so. Throughout their prolonged lockdown, airlines faced stringent measures and strict penalties, leading to many simply canceling their routes altogether. At its worst, airline capacity in April 2020 dropped to -92% compared to 2019 levels, and recovered to a meager -75% in November 2022.
It appears that people are obsessed with measuring airlines. From the quality of service, the number of destinations served, on-time performance, passengers carried, load factors and just occasionally profitability, there are many interesting data points (many of which can be answered by OAG data). However, we rarely measure, or even note, one of the largest data points in the whole aviation industry - Available Seat Kilometres (ASKs). And even more rarely, ASKs by specific aircraft type; well until now!
Beijing-Shanghai (PEK-SHA) is the busiest domestic airline route in China this month, with a total of 755,061 scheduled seats between the two airports. This flight route sees a 24% increase month-on-month, and an 8% increase when compared to March 2019. The second largest domestic route is Guangzhou-Shanghai (CAN-SHA) with 649,607 scheduled seats, an increase of 30% compared to last month, and a 23% compared to pre-pandemic levels in March 2019.
There are some established indicators of how confident the airline industry is in the long-term future of aviation, some are obvious: aircraft orders, airport expansion and the seemingly daily job fairs being hosted by airports throughout Europe. Another indicator and one that occasionally grabs headlines is the availability and swapping of slots at London Heathrow, one of the world’s busiest and most lucrative airports for many airlines.
2022 has been another year of ups and downs for Chinese aviation, at least in terms of how much flying has been done. No other market, perhaps in history, has seen the same degree of volatility in the schedules being operated by airlines. According to the latest OAG data, in December 2022 there was 35% more capacity than in November (which saw capacity fall by 32% compared to October). Of course, not every month has seen such swings, but overall China has seen capacity deteriorate in 2022 compared to 2021, an unusual situation when aviation in most countries continues to be in recovery from the global pandemic.
China is back! Well at least for this week, which highlights how quickly airline capacity can change when travel restrictions are eased. In one week an additional 3 million seats have been added, a 30% increase across the Chinese domestic market. It’s clearly a great seasonal gift and hopefully a sign of things to come, although things change quickly in China and there has been minimal movement in international capacity. With this growth global capacity has smashed back through the 90 million weekly mark back up to 94.5 million with many airlines around the globe adding more capacity ahead of the seasonal holiday period.
Judging by the way that airlines are moving capacity up and down over the next few weeks it is already Christmas in most markets around the world. Over the next four weeks capacity fluctuates up and down by over 10% with some airlines adjusting capacity by up to 40% in the next two weeks. The current lull in capacity sees this week dip to 89.9 million seats as we see China once again lurch backward with another round of capacity cuts and with April 2023’s Formula One Grand Prix already cancelled it seems that nothing will be changing soon.
This week global scheduled airline capacity – that is, the number of seats being flown by airlines around the world – remains only 85% of where it was in the same week in 2019. Not only has there been no growth for three years, but the industry is still a significant way behind where it was. And this is an industry that had become accustomed to average annual capacity growth of 3.5% over more than 20 years.
In the United States, changes to how we fly, which airlines we choose, and how those airlines have responded to challenges are now evident. Latest analysis of which US hub airports have grown and which are operating with a smaller network than they were a few years ago reveal some interesting trends towards legacy and low-cost airlines. Starting with the Top 25 US Airports in 2019, at the top of the list was Atlanta Airport (ATL), a position it retains to this day.
Returning to work after a two-week holiday and it’s good to know that at least in the airline industry not much has happened! If only it were the same in other areas… The good news is that many of the major airlines around the world have been reporting their second quarter results in the last week and for many carriers they are certainly a lot better than this time last year and for many the third quarter outlook is better than expected.
Global airline capacity has bounced back as a combination of both lockdowns in China and the end of Golden Week has resulted in airline capacity moving back to 97.2 million. In a nutshell, all that increase is down to the growth in China, although quite how long before the next capacity cut is anyone’s guess.t. This week’s capacity data would be very quiet if it wasn’t for that one major change in China.
Three pieces of good news broke in Asia last week that, although not providing an immediate impact on global airline capacity, will in the coming weeks help several airlines and airports in the region rebuild capacity. Of course, pressure will be building for China to relax its travel restrictions as Japan removes visa requirements, Hong Kong ended mandatory Covid-19 hotel quarantine for international arrivals, and Chinese Taipei relaxes regulations. This has to be a good news week in Asia.
After the hiatus of the past couple of years, OAG Megahubs is back! In a marked change from 2019, Megahubs 2022 demonstrates that, at least for the moment, US airports are the most internationally connected airports in the world. Thirteen of the Top 20 most internationally connected airports are in the USA with Chicago’s O’Hare International Airport (ORD) topping the table. On the busiest day in 2022, there were 43,350 possible international connections at ORD within a six-hour window. The airport has airline services to 66 international destinations and, combined with the extensive domestic network available at the airport, makes for a winning hub operation.
Although global airline capacity remains above the 100 million seats a week mark, it is likely that this will be the last week that we manage to break that barrier for the rest of the year. Week-on-week some four million seats were dropped from this week’s operating programmes. Next week’s data is already hovering just above the 100 million seat mark, and allowing for the current rate of capacity drop each week, we will be back in the high nineties in seven days’ time.
Ryanair is now the fifth largest airline in the world (in terms of capacity) and returned to profitability in the second quarter of 2022, making it the most successful of the three largest European low-cost carriers. Drawing on OAG data for airline capacity and flight cancellations, as well as information published in airline financial statements for the period April to June 2022, we compare Ryanair with easyJet and Wizz Air on some key metrics to understand what is behind Ryanair’s success.
There are some interesting movements in the weekly capacity update from OAG, even though global airline capacity looks to be as stuck as the Manchester United back four! Weekly airline capacity is still at 102.4 million seats with 79,000 seats lost week-on-week, but dramatically Western Europe is now the largest regional market overtaking North America and holding first place in the global rankings. This is an “enjoy it while you can” moment for Western Europe as this is a function of the different school holiday seasons in each market and come September normal service will be resumed.
This week’s airline capacity numbers look pretty similar to last week's (which in turn were like the previous weeks) and it seemed that we had perhaps peaked at around 102 million seats a week. However, then China reported another lockdown, this time in Hainan, where most areas have been locked down today in response to a domestic COVID-19 outbreak. The impact of the latest lockdown is not reflected in this week’s numbers, but we should expect to see at least a million seats removed next week as the two major airports are impacted.
A modest half a million more seats week on week once again takes global capacity above 102 million as we enter the peak holiday month of the year. This means a remarkable 25% more seats than this time last year, and at 14% below 2019 levels, we edge ever closer to pre-pandemic levels. Looking forward, it looks like capacity is baked in at more than 100 million for the rest of the month, and feels like every flight operating is crammed with holiday makers and a few businessmen still working, who typically seem to be in either seat B or D!
Despite some airports capping airline capacity without consultation in the last week - and the sad, if inevitable, decision of one UK airport to begin the closing process - it has been another week of capacity reaching above 102 million seats, and we should probably enjoy that heat whilst we can. Unsurprisingly, it is only the larger airports that are capping airline capacity for the peak holiday season, this inevitably means we will see capacity fall in the coming weeks in some key locations.
This week saw several airlines making capacity cuts in the United Kingdom, airline COOs departing from two of Europe’s major carriers and Virgin Atlantic announcing a new route to Florida. SAS called their pilots' bluff, and were double bluffed themselves into an application for Chapter 11, and, reassuringly, despite everything global capacity increased slightly week-on-week to 102.1 million, leaving us just 14% below the 2019 mark.
