Our scheduled capacity review this week includes data for the first week of June. You will see, there is a huge jump in scheduled capacity for the period June 1-7 in most graphs. Do airlines believe the traffic will recover on June 1?
The answer is most likely “no.” We see a lot of uncertainty in future schedules. There are many airlines around the world that are grounded as of now, but they still have their pre-COVID-19 schedule on sale from Day X. The Day X varies airline by airline – in some cases this date is government imposed, in other cases this date is set by the airline. It is unbelievable that traffic will come back immediately in any market, so, most likely, we will see gradual increases in demand in upcoming months. June is the new month, so there are many airlines that have Day X set to June 1 (in most of the cases, this date, selected as the first day of the month, is merely symbolic).
We see that post-June schedules are not adjusted and in many cases these have not been updated since January or February, when COVID-19 began to spread. We believe the airline planning departments are able to adjust their schedules for the next weeks only and that the future is still too uncertain.
Nevertheless, the industry is not going down anymore and the current’s week capacity remains and similar level as few previous weeks.
We continue to monitor the data from the ch-aviation capacities module.
The size of the capacity for the current week (May 11-17) is 31.4 million seats.
We should remain optimistic from the fact that capacity for the current week is slightly higher than the last week (30.9 million). Over the last five weeks capacity varied from 30.9 million minimum to 32.9 million seats maximum. The weeks when airlines removed millions of seats every week from the schedules are now gone.
Asia, the largest region in terms of market size, sees a slight capacity growth for the second week in a row. We saw 18.9 million seats scheduled two weeks ago and the last week had 19.5 millinon seats and now the current week has 20 million seats scheduled. Still, this is less than half of the seats scheduled in the middle of March. We don’t believe the sharp capacity jump will stay for the first of June, but we should remain optimistic with the slow recovery in the region.
The airlines in North America are still searching for the bottom level of required capacity. The current week’s capacity went below 6 million seats. With the latest update we see airlines vanished 9 million seats from their capacity in the first week of June – we expect similar actions in other parts in the world too.
Similar to Asia, we see very slow recovery happening in Europe. The current week has the capacity of 3.8 million seats, while we saw 2.5 million seats scheduled three weeks ago. Yet this is only 13% of the market size we considered to be “normal” before COVID-19 hit the continent. Airlines have been busy working with the short-term schedule, so we also expect the capacity curve will be flattened toward June.
The capacity in South America went further down. Now the current’s week capacity is just 5.7% of the size what we considered to be “normal” a few months ago. Airlines started to reduce schedules for June and we also see a huge decrease for the first week of June, similar to North America.
Reductions of the capacity continues in Africa too. But what is usually a less busy continent compared to South America now is more than twice of the size in terms of air connectivity. We believe airlines still haven’t made June schedules right at the current point and we will see further reductions going forward.
In Oceania we see the capacity for May stayed almost flat. Still, the schedules seems not adjusted for the month of June, which shows capacity quickly jumping up. We believe there should be some rebound in the schedules looking to the other parts of the world, but the current schedules look too optimistic.
We will continue to monitor the situation on capacities and will post on our blog. Follow us here and follow our #chaviationcovid19updates on Linkedin.