✈ European aviation during and after COVID-19 crisis !

European aviation is feeling the burden of the COVID-19 crisis even more heavily than other world regions. Its year-to-date cumulative seat capacity is down by 55% – worse than in any other region.

Moreover, according to IATA, its airlines generated negative free cash flow at -83% of revenue in 2Q2020, versus an average of -52% for all regions. Preliminary 3Q2020 results from the leading European airline groups, Lufthansa, IAG and easyJet, indicate that they have continued to burn through cash at a rapid rate.

Europe's year-on-year cut in seat capacity narrowed slightly to -62.1% in the week commencing 26-Oct-2020, the first week of the winter 2020/2021 season, compared with -63.4% in the previous week. This was the first improvement in the trend in 10 weeks, but Europe still has the equal biggest reduction in capacity, tied with Middle East on -62.1%. Africa is -58.4%, Latin America -57.4%, North America -51.5%, and Asia Pacific is -38.4%.

Globally, airlines are expected to continue to burn cash until at least the end of next year, but Europe's airlines may struggle for cash break-even for longer than that.It is a sure sign that things are desperate when Europe's airlines, pilot unions and airports all agree. Jonathan Hinkles, CEO of the UK regional airline Loganair argues that without testing at airports, UK aviation is "whirling around like a leaf in an autumn storm".

EUROCONTROL member states 

✈EasyJet CEO Johan Lundgren says "Aviation continues to face the most severe threat in its history".

✈Virgin Atlantic CEO Shai Weiss warns that "without mass testing", the UK's economic recovery "will not take off".

✈British Airways Airline Pilots' Association general secretary Brian Strutton believes "UK aviation is in a death spiral".

✈Augustin de Romanet, chairman/CEO of Groupe ADP, owner of the two main Paris airports, fears the "entire airline sector is slowly dying".

After reaching peak recovery in Aug-2020, Europe is now eight weeks into deepening year-on-year capacity cuts. Seat numbers are down -62.2% in the week commencing 12-Oct-2020. Only Middle East has a deeper cut, with -63.2%; Africa is -59.1%, Latin America -56.7%, North America -51.6%, and Asia Pacific is -39.0%.

✈Five-Year Forecast 2020-2024

The European aviation industry urgently needs standardized, consistent COVID-19 testing to replace the web of quarantine restrictions that are choking it. After nine successive weeks of progressively worse year-on-year declines, Europe now has the deepest capacity cut of all the world regions.

Seat numbers have been cut by -63.4% in the week commencing 19-Oct-2020. Middle East, previously occupying last place, now moves above Europe with a -62.8% cut, while Africa is -59.1%, Latin America -57.8%, North America -52.1% and Asia Pacific is -39.2%.

Ryanair, Europe's biggest airline, has cut its winter capacity plan from 60% to 40% of 2019 levels. EUROCONTROL DG Eamonn Brennan told CAPA Live October that he expected air traffic movements in Europe at 40% of last year's this winter, which suggests a lower figure for seat capacity (since long haul flights, with more seats, have been cut more heavily than short haul).

The EU's 'traffic light' approach to travel restrictions does not seem likely to alleviate the outlook to any meaningful degree. With Europe's aircraft perhaps only half full on average, passenger numbers could fall short of 25% of prior year traffic, pushing revenue even lower.

From pandemic towards recovery – tracking the evolution of European aviation during the pandemic.

We can expect European airline bankruptcies by the end of this winter.

Source: Flying Bosnian/ EUROCONTROL/ IATA