Global scheduled airline capacity is expected to increase by 5% in August, according to the latest data from OAG. The number of flights is also set to rise this month, although at a more moderate rate of 3%.
Although the increase is encouraging and indicates a trend towards increasing consumer confidence on a global scale, the average level of growth masks some significant variations in regional performance, reflecting the faster rate of economic recovery that is being achieved in some markets and the geo-political instability that continues to characterise others.
From a regional perspective, Intra-African capacity commands the highest level of growth in terms of both frequency and capacity. Compared with August last year, capacity utilised on routes within Africa has increased by 9% with the level of frequency also increasing by 11%. The increase in Intra-African activity is countered however by a decline in capacity to/from Africa with the level of frequency and capacity both experiencing a decline of -4% and -2% respectively.
Asia Pacific is the region which commands the second highest level of growth in terms of frequency with an increase of 10% to/from the region. Capacity to/from the region will also increase by 7%, equalling the level of growth in capacity within the region.
In comparison, Europe and North America record positive if not more moderate rates of growth. Taking into account capacity to/from and within Europe, capacity increases this month by 5% as opposed to growth of 3% in frequency. On a similar basis North American growth is more conservative, with capacity increasing by 2% whereas the number of frequencies remains flat.
Growth in low-cost scheduled capacity worldwide continues with a 9% increase in both frequency and capacity for the month of August. This is in line with the total level of growth achieved for the year to date. Low-cost capacity now accounts for 25% of all seats worldwide for the month. This is the first time that low-cost capacity has reached this level of market penetration for the month of August.
Low-cost growth continues in all but two regional markets. Low-cost capacity to/from Africa declines by 8% whereas capacity to/from Europe declines by 13%. The number of frequencies operated in these markets also declines, by 8% and 11% respectively.
A review of the top 10 key hub airports worldwide highlights the comparative performance of the world’s regional markets. Four North American airports feature in the top 10 hub airports for August. Atlanta, maintaining its position as the world’s largest airport, sees available seat capacity at the airport increase by 2% to offer a total of 9.7m seats during the month. The growth in seat capacity is contrasted by a decline in frequency however suggesting that operators are increasing capacity through increased aircraft size rather than additional frequency. This trend is replicated at Dallas Fort Worth with available seat capacity increasing by 3% and frequency increasing by just 1%. Los Angeles Airport however appears to be bucking the trend with a 6% increase in seat capacity and an increase in frequency of 8%. These increases are being driven by the introduction of additional services at the airport including an increase in frequency by Turkish Airlines which is scheduled to commence towards the end of the month.
The performance of the key hubs in the Asia Pacific region points to the the high level of growth being experienced across the region. Jakarta Airport sees available seat capacity increase by 18% with frequency also increasing by 15%. Bangkok and Hong Kong also record high levels of growth in both capacity and frequency.
From a European perspective however, the performance at key hubs is more muted. As we enter the key summer period, there is no change in the number of services operated at London Heathrow however there is a slight decline in capacity when compared with the previous period. A review of performance at Paris CDG also indicates limited growth with capacity and frequency both increasing by just 1%.
The total available seat capacity for Africa (combining capacity within and to/from the continent) is set to increase by 2.8% for August whereas the number of frequencies will increase by 5%. Of note however, is the strong performance Intra-Africa. Total available seat capacity is anticipated to increase by 9% in August with the number of frequencies also increasing by 11%. Low-cost development continues to be a key driver of growth within the region. Compared with August last year, the number of low-cost flights within Africa has increased by 44% with the sector now accounting for 12% of all services operated.
The effects of the events that took place earlier this year and the impact upon air transport capacity in the region continue to be evident. International low-cost services to Egypt decline by 12% in terms of both capacity and frequency as a result of the withdrawal of services from Egyptian leisure destinations. In contrast however, Cairo Airport reports an increase in both capacity (8%) and frequency (4%) suggesting increasing demand for access to the Egyptian capital. Total available seat capacity at Tripoli Airport is significantly lower than during the same period last year as the continuing instability affects demand. This month there are 141,000 fewer seats than last year, equating to a decline in total capacity of 29%.
Total available capacity on international routes from the US increases by 2% this month with the total number of international flights also increasing, but by a conservative 1%. Growth in US domestic capacity will be equally modest with 1% additional capacity available this month. The conservative approach to capacity growth during the peak holiday season suggests that overall, carriers remain cautious at a time when the economic outlook appears increasingly uncertain.
Despite the uncertainty however, low-cost travel in the US continues to grow. Domestic low-cost capacity increases by 6% this month which is in line with the average rate of domestic low-cost growth for the year to date. In terms of international low-cost development, an additional 22% of capacity will be operated on international routes by low cost carriers during August. This level of growth exceeds the average for the year by seven percentage points.
Low-cost growth within Europe continues with total seat capacity increasing by 8% for the month. Low-cost traffic to/from Europe will decline this month however by 13% as the effects of the withdrawal of capacity from North African markets continue to be felt. Overall however, low-cost traffic to/from and within Europe sees an increase in capacity of 7% and an increase in frequency of 6%.
Low-cost development in Europe continues in the ascendancy within Western Europe. Low-cost capacity within Western Europe increases by 8% this month. In contrast, capacity on low-cost services within Eastern Europe has declined by almost half. This month, 77,000 fewer seats will be available on low cost services within Eastern Europe, equivalent to a decline of 49%.
Of note is the decline in capacity between Western Europe and key markets in Africa. Fewer seats will be available from Johannesburg, Cairo and Addis Ababa this month when compared with August 2010. Cairo records the highest level of decline with 13% fewer seats available, equivalent to 55,000 fewer seats. In contrast capacity to Cape Town and Nairobi will increase by 8% and 5% respectively.
Capacity between the key Middle East hubs and Western Europe however, continues to grow. Total available seat capacity between Western Europe and Dubai, Doha and Abu Dhabi will increase this month by 11.6%. Capacity between Doha and Western Europe increases by 26% this month, equivalent to an additional 88,000 seats. European airports benefiting from additional capacity to the Middle East include Amsterdam where Middle East capacity increases by 20% this month and Milan Malpensa where Middle East capacity also increases by 19%.
There is little change in total available capacity to/from Central and South America this month. Although almost an additional 119,000 seats are available in August, this equates to only a 1% increase in capacity. The number of frequencies remains relatively unchanged. Within the region however there has been an 8% increase in total seat capacity available, equivalent to an additional 1.9m seats for the month. The number of frequencies operated within the region is also in the ascendancy although the overall level of increase is more moderate at 2%.
A notable development in the Central and South American region is the high level of growth at many of the region’s key airports. The airports of Sao Paulo (GRU), Buenos Aires, Lima, Montevideo and Santiago de Chile all record double digit growth in the number of frequencies operated for the month. Lima Airport’s performance is particularly strong. In addition to a 19% increase in frequency, Lima Airport’s total available seat capacity is set to increase by 24% during August. Increases in capacity from North America and Canada provide the impetus for the addition of capacity to some key South American markets. Capacity from the USA and Canada to Santiago de Chile increases by 5% as opposed to a 7% increase in frequency. In contrast, capacity from USA and Canada to Buenos Aires has declined by 11%.