Global Analysis

Scheduled airline seat capacity continues to grow in May with an increase of 6% year on year based on the latest data from OAG. This growth is ahead of the 5% average monthly capacity increase for 2011. The number of flights also increased, by 4.2%, marginally ahead of the average monthly increase in 2011 of 3.9%. The larger increase in seats against frequency for May reflects the average number of seats per aircraft, now at 126.  This is an  increase of 1.4% year on year and maintains the trend of larger aircraft across the global markets.

Looking at the main regional markets, as with April, the only region to not record growth, was the to/from Central & South America market. Frequencies are down 3% for May year on year and available seat capacity is down 1%. These figures match the trend for the year to date for the region; however, reduction in seat capacity is in contrast to a 1% increase in April.  There are increases for specific country markets which will be covered later in this report.

The fastest growing market is to/from the Middle East which again recorded an 11% increase in available seats.  Routes to/from Asia Pacific also retained its number 1 position in terms of the greatest increase in frequencies (ahead of to/from the Middle East), with 10% growth.

In terms of total volume growth, the intra Asia/Pacific region remains the clear leader with an increase of almost 6.7 million seats in May 2011 against 2010. Interestingly, the intra Europe region is number 2 for the month with an increase of over 4.3 million seats (+6%) year on year which is a significant increase over the growth for April (+2%).

Source: OAG, includes international capacity to/from the regions

Low Cost

Worldwide low cost scheduled capacity again increased year on year, this time by 10% compared to 8% in April and is marginally ahead of the average for the year to date of 9%. The highest regional growth by a clear distance is within Africa both in terms of frequencies (+37%) and available seats (+17%). The to/from Central & South America market again shows good growth (12% in seats and 13% in frequencies) which is in stark contrast to the full picture for the region – low cost carriers are starting to eat up capacity and now represent over 13% of the total market to/from Central & South America. In 2006, this was only 5%.

Source: OAG, includes international capacity to/from the regions

Main Hub Airports

Looking at the main hub airports by scheduled capacity, Atlanta remains the clear number one, with almost 9.6 million seats available in May 2011 representing an increase of 4% year on year – remarkably, Atlanta is 15% ahead of the second largest hub, Beijing. Yet again, Heathrow swaps places with Tokyo Haneda and regains the number 3 position – the gap between the two is now 185,859 seats for the month. Undoubtedly, this is impacted to some extent by the very recent events in Japan and carriers are being very flexible in managing capacity on a short term basis.

Of the top 30 airports in terms of available seats, only Madrid (11^th ) and Denver (14^th ) showed any reductions in volume – 1% and 0.2% respectively which is an improvement on the April performance of -3% and -0.4%.

In terms of absolute volume, Delhi Airport had the largest growth with a remarkable increase of over 1,000,000 seats, followed again by Hong Kong with over 757,000 additional seats.

The migration of capacity from Tokyo Narita to Tokyo Haneda continues to impact upon that airport’s performance (-6% in frequencies and -11% in available seats). The size of the average aircraft at Narita shows in these statistics, and the loss of frequency has a disproportionate effect on the number of seats lost

Regional Summary

Africa

The total available seats for the region (both within and to/from Africa) grew year on year and was marginally up on April’s growth (3.9% against 3.6%), reversing the recent trend of reducing growth (March had been 7% and February 11%)

New aircraft deliveries to African airlines have helped – Kenya Airways and Ethiopian Airlines have had a positive effect on their respective countries with frequencies to/from Kenya and Ethiopia up 24% and 41% respectively, and also domestically, up 71% and 30% respectively.

Source: OAG, includes capacity to/from and within the regions

Six of the ten top growth airports (in terms of percentage uplift in available seats) for May are African airports, with Djibouti expanding the greatest (+70%). Official capacity reductions are starting to filter into the political issues affecting Libya, with Tripoli being down 23% in available seats and 19% in frequencies. The collapse of Wataniya is affecting the performance of Kuwait – down 12% in frequencies and 7% in available seats.

Low cost capacity to/from the region decreased by 2% year on year however this compares positively against a decrease of 3% in April.

North America

Traffic within the region grew again in May year on year with a 3% increase which is slightly ahead of the year to date average of 2%. The picture is reversed for to/from North America, with available seat capacity up 2% year on year, and the year to date average at 3% growth.

Source: OAG, includes capacity from the airports to/from North America

Looking again at the major European airports and their capacity to North America, these top eight airports represent almost 5 million monthly seats, a collective growth of 1.4% year on year. However, in May 2011, these airports represent 27.9% of the total capacity to/from North America – the lowest it has been over the last decade and perhaps reflective of the very mature nature of these routings

Europe

There is a 6% increase in the number of seats and frequencies operating to/from the region year on year.  Within the region, there is a 5% increase in frequency and a 6% growth in the number of seats. This is slightly below the year to date average for to/from the region of 9% and is reflected in the recent trends – April being up 9% year on year and March being up 10% year on year.

Carrying on a similar theme to the US domestic market analysis in April, the development of Low Cost Carrier service within Europe is an interesting trend. There continues to be strong expansion within Europe by the LCCs, which is interesting in that it is a fairly mature market.  All intra-European LCC seat capacity has grown by 8% for May 2011, but there were significant variations. To/from Poland was -14% (frequencies) following shifts in Ryanair capacity.  Slovakia continues to feel the impact of the SkyEurope demise (-11% in seat capacity to/from the country), but the Norwegian expansion in Finland helps push up LCC seats for May 2011 to/from the country by 59%. In fact, Helsinki is one of the fastest growth airports for May (+22% in available seats year on year).

Source: OAG, includes LLC growth and share of Europe total capacity

As much as the intra European market is considered to be mature, unlike the US domestic market, there has continued to be overall growth for both LCCs and Legacy carriers. Whilst LCCs have driven the vast majority of the traffic growth, and now represent 37% market share, the total market has grown by an average of 5% over the last decade with Legacy carriers enjoying a more modest growth of 1% over the same period.

Asia/Pacific

Domestic capacity in China now represents over 30 million available seats, a 7% growth year on year, and is the second largest domestic market in the world (behind the US). To put it in the widest context, this now represents 9% of the Global air market and has almost trebled in size since 2002.

There are clearly a number of new services coming on line during the coming summer season.  Although it will not impact the capacity for May significantly, Hainan Airlines’ will commence service to Zurich at the end of the month and has confirmed that another six new International routes will be launched this year. The International expansion includes the launch of new service to Busan, Colombo, Jakarta, Kolkata and Okinawa.

Additionally, China Southern, which commenced service to Auckland during April, will start to receive the first of its A380 aircraft during the summer and will be looking to increase capacity to Paris and possibly launch new service to other European airports.

Asia/Pacific has six of the top ten airports by growth in capacity in May year on year, with Delhi, Hong Kong, Jakarta, Singapore, Tokyo Haneda and Kuala Lumpur representing over 3.9 million additional seats for the month – 22% of the total worldwide growth for the month.

Source: OAG, includes capacity to/from the airports

As mentioned earlier, Delhi had the largest growth worldwide in available seats and Air India’s investment in Delhi as a hub is undoubtedly delivering high levels of capacity expansion at that airport; frequencies are up 20% and available seats are increasing by 28%. This remarkable growth is reflected in the figure above and the percentage growth is considerably ahead of the other major hubs in the region.

Low cost within the Asia/Pacific region also grew steadily, recording an increase of over 2.3 million available seats for the month (14% growth).

OAG FACTS uses interactive graphs to display a 10-year visual trend of the performance of a specific airport, route, country or region. It is updated monthly.

Print OAG FACTS Executive Summary May 2011