June shapes up as the start of the airline network rebuild

May 26, 2020

June is shaping up as the start of the airline network rebuild according to the world’s leading source of airline schedules OAG

In an update authored by John Grant, OAG says that the 1st and 15th June are dates in the rebuild phase for many carriers.

“Confusion around lockdowns, quarantine requirements and now bi-lateral disputes continue to frustrate airline network planners around the globe as they try and make sense of bridges, corridors and too many dead ends,” said Mr Grant.

“The industry remains in a state of confusion much of it created by others but will work through the consistent lack of clarity.”

The report says that “this week’s capacity is around 28 per cent of the levels offered in the same week last year and cumulatively since the 20th January over 800 million fewer seats have been operated.

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“Eight of ten largest regional markets report growth on the previous week with the Southwest Pacific and Lower South America showing the largest weekly growth rates. In the case of the Southwest Pacific, Air New Zealand have increased their weekly capacity by some 45 per cent having added back 34,000 seats while Virgin Australia has also added back a further 10,000 weekly seats.”

The report says China remains by far the largest country market accounting for over one-third (36 per cent) of all global capacity and of the 11 million seats offered in China, some 98 per cent are domestic seats. Similarly, in the US market, which is now less than half the size of its Chinese competitor, 96 per cent of capacity is across the domestic networks.

It adds that the top ten country markets continue to be noticeable for the absence of any European country markets when typically, the United Kingdom, Germany and Spain would feature in such a list. A sneak preview forward to the middle of June would see all three of those markets and Turkey return to the top ten.

“This week’s data has a sense of everyone waiting for June. Airlines have clearly started to add capacity back and are now waiting for signs of response in demand. That capacity rebuild though is only partial and despite that optimism, there is no way that capacity will rebuild exponentially in the coming weeks. Indeed, looking forward over the next six weeks airlines have in the last seven days removed some 38 million international and 25 million domestic seats as their planning horizon finally stretches out from days to a few weeks ahead,” said Mr Grant.

“The early capacity rebuild we are seening is an encouraging sign but nowhere near recovery. The airline industry continues to hang around in corridors of uncertainty awaiting bridges to be built and for the COVID-19 bubble to finally burst. If we could even reach 45 million seats a week by the end of August that would represent a near 50% increase from where we are at the end of May; that would be some achievement but still be less than half of the January capacity. It seems like we have a long and perhaps bumpy journey ahead of us.”