COMMENT: John Grant of OAG – September airline capacity *

As a Senior Analyst for OAG and partner in MIDAS Aviation John Grant has been tracking the impact of Covid-19 across the industry with regular updates published on a Monday morning on the OAG media channels. A regular commentator on aviation issues across global media, Grant has worked across both the airline and airport sectors and brings a wealth of knowledge to his insights.

The ups and downs of aviation’s recovery has continued this week with capacity increasing back up to 78.9 million  seats a week, a modest increase of 0.7%, over half a million seats added. Is that growth cause for optimism?

Well, at the beginning of July airlines were planning to operate some 93.3 million seats reducing operational capacity by some 15% in the space of seven weeks before travel, as they matched capacity to available demand. Key markets remain locked with no sign of anyone wishing to reopen their borders.

As we head into September and the summer season slowly sets, airlines will be wondering where the good news really is and what their future will be for this winter; even the US domestic market seems to be stalling as the Delta variant continues to spread across the country. IATA’s expected industry losses for this year are likely to be larger than they expected unless something significant happens soon.

This week’s latest schedule changes, through to the end of October, saw another 18 million seats removed by airlines around the world from their networks. Every day around 252,000 seats are being eliminated, and as airline network planners return to work from well-deserved vacations this week we can expect that number to increase.

Scheduled capacity in Western Europe remains stuck at around two-thirds of the 2019 levels although the UK remains at below half of its normal capacity levels. At the same time capacity across the North Atlantic to Western Europe is currently at only 38% of its normal level and to the UK less than one in four seats operated two years ago are operating. Airlines are already assuming President Biden will continue to sleep on the issue and are now cutting any plans for the rest of the year; so much for special relationships!

Sadly, capacity cuts continue in the Southwest Pacific region with domestic capacity in Australia cut by another 22%. In 2019 there were some 1.5 million weekly seats in the Australian domestic market, this week there will be around 480,000 and if that looks bad then international capacity is at less than 15% of its normal levels. New Zealand is equally as grim with just 12% of normal pre-Covid-19 international capacity.

South East Asia is another market heading in the wrong direction with most major markets reporting declines in weekly capacity. On a more positive note, Singapore, the pioneers of travel bubbles, has now come up with Vaccinated Travel Lanes (VTL) to replace bubbles with Germany and Brunei, the first countries to achieve such designation, let’s hope they are more successful than the bubbles.

It seems incredible, although equally a reflection on the global impact of the pandemic, that 18 of the top 20 countries in August 2019 are still in the top 20; the pain has been equally shared across all markets! Only Australia and Thailand have dropped out of the rankings to be replaced by Greece and Colombia, both country markets that have perhaps taken a more relaxed approach to travel restrictions.

Aside from the Chinese 'Big Three' adding back capacity this week, there is little movement amongst the top 20 global airlines with less than a 2% swing either up or down across the remaining carriers. Maybe that is a sign of market stability or perhaps a reflection that no one has a clue about where to add back or remove capacity any longer. Despite a round of CEO optimism in the early part of the summer it seems that the flames of a recovery are fading as quickly as Arsenal’s supporters’ chances of having to buy a Ryanair flight to Europe next year.

The next few weeks will determine just how good or perhaps more likely how bad 2021 will be for the world’s airlines. A reopening of the US market for Europeans in the next week or so would undoubtedly lead to the normal rush of demand that we have seen in other regions; if it remains closed then for many carriers the forthcoming winter season will be as bad as last year.

Even with a pair of rose-tinted glasses, September is not looking good.

Stay safe everyone.

www.oag.com

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Joe Bygraves, Kingsbury, London

A thoughtful piece. It seems that the so called “Task Force” and the presumed talk between the PM & President were a waste of time. Why is Biden keeping UK citizens out of America but allowing his own citizens to come over here and not be tested when re-entering the USA?