European market analysis

Ralph Anker

Editor of The ANKER Report, Ralph Anker, looks back on 2019, a turbulent year for the European aviation industry, while considering what could lie ahead for country markets and airlines in 2020.

According to ACI Europe figures, passenger numbers across Europe’s airports were up around 3.5% in the first nine months of 2019. While international traffic has seen growth of almost 5%, domestic traffic is down almost 1%, with Turkish government statistics showing a 13% decline in domestic traffic in 2019.

Following growth of 9% in 2017 and more than 6% in 2018, this clearly shows a trend that will concern many in the aviation industry. However, it is worth remembering that air travel in Europe is still growing considerably faster than the economy. The European Commission’s forecast for GDP growth in the EU in 2019 is about 1.5%, which is also the figure estimated by the IMF. Commercial air travel in Europe is still growing at twice the rate of overall economic growth, despite the difficulties the industry has faced in 2019.

Airline failures and aircraft groundings

There is no such thing as a dull year in aviation and 2019 was no exception. There have been several high-profile airline failures ranging from well-established carriers such as Adria Airways (Slovenia), Aigle Azur (France), Germania (Germany) and Thomas Cook Airlines (UK) to younger, but significant airlines such as flybmi (UK) and WOW air (Iceland). Combined with the grounding of all Boeing 737 MAX aircraft since early March, it meant a reduction in capacity that had not been envisaged at the start of the year.

According to ANKER Report analysis of Cirium Data and Analytics schedule data captured back in February, the European airlines that had been planning to offer the most seats on the MAX this summer were Norwegian, Turkish Airlines, LOT Polish Airlines, TUI Airways and Air Italy.

Across Europe, growth rates for air travel in the first nine months of 2019 show some significant variations. Among the region’s six biggest country markets there is not much of a spread of performance, with France and Spain reporting growth of about 5%, Italy 4%, Germany 3%, the UK 2%, while Turkey’s overall traffic is down 2% thanks to strong growth in international demand (up 11%) almost offsetting the dramatic slump in domestic passenger numbers.

However, among smaller country markets there are some more extreme results. The rapid growth of (U)LCCs in the Ukraine market has seen demand there grow by 20% compared with last year, while the battle for low-cost supremacy in Vienna has seen Austrian traffic surge by over 16%. There has also been double-digit growth in North Macedonia and Albania, admittedly starting from a fairly low base. However, taxation issues in Sweden brought a 4% drop in demand in 2019, with the Danish market basically stagnant and Norway growing by less than 1%. The biggest drop has come in Iceland, where the collapse of WOW air and Icelandair’s MAX issues has seen traffic decline by 25% at the country’s dominant airport at Reykjavik.

300 fewer new routes in 2019

In 2018 The ANKER Report identified more than 2,100 new routes launched by airlines involving European airports. The equivalent figure for 2019 is slightly more than1,800, with Ryanair as usual leading the way (with more than 300 new routes) and other low-cost carriers such as easyJet (almost 100), Lauda (50- plus and now owned by Ryanair) and Wizz Air (120-plus) also keeping airport fire services busy, as they celebrate the new routes with the traditional water arch salute.

Other airlines exploring the viability of a significant number of new routes (at least 30) included Eurowings,, Norwegian, Pobeda, newcomer SkyUp Airlines in Ukraine, TUI Airlines, Turkish Airlines, Volotea and Vueling. Almost 190 different airlines launched at least one new route involving a European airport in 2019.

Winter capacity up just 1%

At the time of writing (early December 2019), seat capacity for the current winter season (November 2019 to March 2020) across all European airports was set to grow by only 1.1%, with the number of flights scheduled to increase by just 0.1%. Among Europe’s four biggest airlines, Ryanair’s capacity was expected to be up about 4%, easyJet’s was virtually unchanged, Lufthansa’s seats were down 2% and Turkish Airlines’s capacity was up by just 1%. Among the top 10 airlines, by far the fastest-growing was expected to be Wizz Air, which planned to increase its capacity by some 23% this winter.

France growing, Germany shrinking

Looking at country markets for the first quarter of 2020 (versus Q1 in 2019) shows the UK market stable, Germany down 3%, Spain down 1%, France up 4%, Turkey up 2% and Italy up 2%. Countries expecting well above average double-digit growth include Albania (+23%), Bulgaria (+18%), Hungary (+17%), Malta (+16%) and Serbia (+15%). At the other end of performance is Slovenia (down 39% after the collapse of Adria Airways) and Iceland (down 21%).

In terms of volume growth, France leads the way, with an additional 890,000 departing seats followed by European Russia (+745,000 seats), Poland (+630,000), Austria (+510,000) and Italy (+410,000). Germany (down 990,000 seats) sees by far the biggest drop in early 2020 capacity, followed by Spain (down 380,000), Sweden (down 245,000) and Iceland (down 225,000).

Uncertainties abound for 2020. By the time you read this, Brexit may have happened (or possibly been delayed yet again), Boeing’s MAX aircraft may gradually be getting back in the air once more and who knows what fuel prices may be doing? Alitalia may have a new ownership structure and world trade may have been impacted by escalating trade wars. Hopefully, no more airlines will have ceased operating since the start of the winter season. One thing is for sure. This year will, yet again, not be dull as far as the European aviation sector is concerned.

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5-7 Jun 2024