OAG FACTS – May 2013

OAG’s latest airline capacity data reports that airlines worldwide will see an increase of 2%

to flights in May 2013 versus last year, and an increase of 4% to seats. This means

carriers worldwide will operate 14.7 million more seats, equivalent to 475,000 additional

seats every day compared to May 2012. Over half of this growth comes from the

Asia/Pacific region. The market Within the Asia/Pacific region continues to see strong

growth again this month with an increase of 7% to flights and 8% to seat capacity versus

last year.

It is the To/From Africa market however that will see the highest rate of growth in May

with flights due to increase by 9% and seat capacity by 11%, or 793,000 extra seats

compared to the same month last year.

Within markets are more mixed, continuing the recent trend, with Asia/Pacific and Central

& South American within markets showing the main growth this month.

The Shape and Size of LCC Traffic in Europe

In this edition of FACTS we focus on LCC frequency and capacity in Europe, looking

particularly at the evolution of LCC share by country market in a range of European

countries. We also take a brief look at some of Europe’s major LCC routes and the market

shares of Europe’s major LCCs.

Although there is nothing new about the pace of growth in the European LCC sector in the

last decade, it is interesting to remind ourselves that capacity offered by Legacy carriers

has seen only 1% average annual growth in that time, with the overall market volume

increasing by only 2.8 million seats, or less than 311,000 seats per year.

LCC capacity within Europe, by contrast, has grown at an average rate of 14% each year,

and the market has tripled from just below 10 million seats to just over 30 million. The

Top 5 country markets for LCC capacity in Europe are the UK, Spain, Italy, Germany and

France, all with over 3 million international LCC seats in May 2013.

United Kingdom

The UK has the largest LCC market in Europe, with 8.8 million International LCC seats in

May 2013, more than double seat capacity of 10 years ago in 2004. The UK’s international

LCC capacity saw growth of 15% versus last May – in large part due to significant growth

from Ryanair and easyJet who collectively added 779,000 seats compared to last May –

more than offsetting the loss of bmibaby’s international capacity of 202,000 last May.

Domestic UK LCC seats will fall by 2% compared to last May, reflecting the withdrawal of

bmibaby’s capacity from the market and the new capacity offered by Virgin Atlantic’s

Little Red service not being included in the LCC sector definition. UK capacity for Legacy

and LCCs will be down 4% in May 2013 as new growth does not match the loss of bmi.

Spain

Spain’s LCC market is also significant, with 7.4 million international seats this May

compared to just 1.9 million 10 years ago. Spain has the largest domestic LCC market in

Europe, with 1.7 million seats in May 2013. LCCs now dominate the scheduled air

transport market in Spain where they have 51% of domestic and 54% of international

capacity. Of the larger European countries, Spain is the only one where LCCs have over

50% of both international and domestic markets. The tables below highlight that in some

smaller countries, such as Latvia and Slovakia, LCCs really do dominate with over 80% of

seat capacity.

International Seats Market Share Domestic Seats Market Share

Spain’s International capacity growth has been strong and consistent so that the average

annual growth since May 2004 is 16%; with LCC capacity exceeding Legacy carrier capacity

in May 2010. LCCs didn’t really enter the Spanish domestic market with any significant

volumes until 2007 and in just 6 short years have eclipsed Legacy carriers in seat capacity

terms.

Even through domestic Spanish capacity was affected by the introduction of high speed

rail between Madrid and Barcelona in 2008, this route remains the busiest in Europe in

capacity and frequency terms. Madrid – Barcelona is served by both Legacy (Iberia) and

LCC carriers (Vueling).

There are 5 main carriers in Spain’s domestic market which account for 95% of seat

capacity. Iberia still is the largest with 32% of domestic seats, whilst Vueling and Ryanair

have a further 26% and 17% share of the domestic market respectively. On Spain’s

international market, Ryanair are the largest individual carrier, with 21% of seat capacity.

Italy

Italy has experienced a similar pattern of development in the LCC market, with domestic

LCC capacity accounting for 49% of all seats in May 2013 (slightly down on May 2012

which saw a 52% market share – due to the collapse of Windjet in 2012).

Alitalia are still the single biggest carrier in the Italian domestic market with a third of all

seats. Ryanair is next biggest with a quarter of all seats and easyJet third largest with 11%

of domestic seats. Italy’s international LCC market is the third largest in Europe and

accounts for 45% of Italy’s International capacity. Ryanair are the biggest single operator

with 20% of Italian international seat capacity in May 2013. Next biggest is Alitalia with

11% of international seats.

Germany

Germany has the 4th

largest international LCC market in Europe with 3.7 million seats in

May 2013. Looking at year on year comparisons for Germany are currently skewed as

they show LCC market share and capacity falling in both the domestic and international

markets. This is due to the reclassification of Air Berlin into the legacy sector whilst

previously they were included in the LCC sector.

France

France has one of the lowest LCC penetrations of the larger EU countries, particularly in

domestic capacity where just 18% of seats are operated by LCCs. This reflects the strength

and dominance of Air France who have 74% of domestic seats, amounting to over 2

million seats in May 2013. Domestic LCC seats reached just under 500,000 in May 2013,

recording growth of 28% on last May and continuing the trend of the last couple of years.

Much of this growth comes from Volotea who will operate 73,000 new seats compared to

last May.

LCCs have a bigger share of French international capacity, with 28% of seats. This is still

behind most of their European peers. LCCs are also driving international capacity growth

in France with easyJet, Ryanair, Vueling, Transavia.com France and Norwegian Air Shuttle

collectively adding 321,000 seats in May 2013 versus last year.

Carriers & Routes

Ryanair remain the dominant LCC carrier for Within Europe capacity. With 9.3 million

seats in May 2013, they represent nearly one third of all LCC seats.

The biggest LCC route by seat capacity is Barcelona-Madrid, operated by Vueling. Spain

features prominently in the Top 10 Routes with half of them originating there.