Ascend analysts Henk Ombelet and Peter Morris examine the reshaping brought about by the low-cost carriers and route economics
Airline route networks in Europe changed significantly between 2008 and 2013. While the overall number of seats in the market increased by about 2.6%, the number of flights dropped by 8%. There have also been profound changes in who flies, where they fly to and which aircraft types they are using.
The changes have largely been driven by the realities of route economics, the growth of low-cost carriers and a retrenchment of the regional airline model. Major European network carriers, meanwhile, have been struggling to stand still.
Smaller aircraft with poor load factors and operating economics savaged by fuel price increases have been hit the hardest. As a result, there has been a marked shift in the size of aircraft used for intra-European operations. Airlines have been trading up from turboprops to regional jets and from small regional jets to larger regional jets, or even single-aisle aircraft. Smaller single-aisle aircraft have either been replaced by larger versions, or had more seats installed.
The total number of intra-European flights dropped by 8% between 2008 and 2013, as a result of significant reductions in the number of flights operated by aircraft with less than 150 seats.
Older and smaller aircraft types, such as the BAE Systems BAe 146, Fokkers and Avros are being retired in favour of newer and more fuel-efficient types, such as the larger regional jets manufactured by Bombardier and Embraer.
The number of intra-European flights operated by aircraft with fewer than 50 seats dropped by almost 40% between 2008 and 2013, as small regional jets and turboprops were replaced by aircraft in the 50-100 seat category. Meanwhile, the 100-150 seat narrowbody market dropped by about 35%, as larger versions were drafted in.
While the total number of flights dropped to 6 million in 2013 from 6.5 million in 2008, the total number of seats offered increased slightly to 824 million, from 803 million. This was caused by a combination of smaller aircraft types being replaced by larger types, and an increase in the average number of seats on specific aircraft types. For instance, seat numbers on the Airbus A320 – the most-used aircraft type, accounting for almost 40% of intra-European flights – rose to 165 in 2013, from an average of 158 in 2008.
The average distance flown has also increased, resulting in a 10% rise in ASKs over the five years to 2013. This was driven by the growth of flights to eastern Europe and Turkey, the expansion of low-cost carriers and the higher number of seats per departure.
The number of city pairs served also rose over the period to 7,450 last year, from 6,750 in 2008. There were 1,900 route closures and 2,600 route openings, resulting in a net increase of 700 routes. Shorter routes accounted for the bulk of the closures, and new routes tended to be longer than existing routes. This was partly due to the relative unprofitability of operating short routes, but was also affected by the growth of point-to-point connections offered by low-cost carriers.
High-speed rail has been another influencing factor, as evidenced by the inauguration of the high-speed rail link between Madrid and Barcelona in 2008. In that year the Madrid-Barcelona city pair was the busiest in Europe, with an average of around 123,000 seats a week. By 2013 this had almost halved.
The busiest intra-European city pair is now Istanbul-Izmir, although it features substantially fewer seats than Barcelona-Madrid at its peak. Istanbul-Izmir was not even in the top 10 in 2008, when it ranked only 19th, but a 75% growth propelled it to the top. It is now one of three domestic Turkish city pairs to make an appearance in the top 10.
All the top 10 city pairs are domestic – the largest international pair is London Heathrow-Dublin.
Turkey has seen the strongest growth overall, more than doubling the number of seats. This was dominated by domestic capacity, and has seen Turkey overtake countries such as Spain and Italy to become the largest domestic market in Europe. Most domestic markets contracted between 2008 and 2013, with only Norway and Sweden showing small increases.
In terms of international capacity, the UK is still the largest market. Most countries saw international capacity rise, following a dip in 2009 due to the economic downturn, but again Turkey has shown the strongest growth. However, Turkey forms the southeastern edge of Europe, and increasing capacity to the country automatically means longer flight distances.
The last five years can be summed up as larger aircraft, more seats per aircraft and longer distances travelled, as the regional airline industry has rebalanced to cope with changes in cost structure and the relative aircraft economics.