Europe aviation capacity outlook on a plateau as air fares strengthen

Airline seat capacity to/from/within Europe is set to be 101.7% of 2019 levels in 4Q2024, according to data from CAPA - Centre for Aviation/OAG. This will be the third successive quarter above 2019 levels, but the trend has been little more than flat since 2Q2024 when the 100% threshold was first breached.

Intercontinental markets to/from Europe are set to reach 105.6% in 4Q (up from 102.2% in 3Q), with intra-Europe at 100.3% (down from 101.3% in 3Q). Low cost airlines continue to grow their seat share in Europe, recovering more strongly from the COVID-19 pandemic.

The fairly static capacity picture is the result of ongoing supply chain constraints. Logic would suggest that this should be good news for yields. Indeed, air fare inflation was positive once more in both the EU and the UK in Aug-2024, after three months of falling prices. However, it is too early to extrapolate from one month of data.