Aviation airlines fold as growth slows


Growth in air traffic moderated over the course of 2019 following a 6.3% rise in global passenger numbers in 2018 and 6.6% rise in Europe. Airline association Iata reported 3.8%


growth in global passenger traffic in September 2019, but with traffic in Europe increasing only 2.6%. Iata noted September marked “the eighth consecutive month of below-average demand growth” and Europe’s figures were “the weakest this year”. This was no bad thing given clear overcapacity in Europe’s short-haul market and increasing pressure on carriers to curb emissions growth. The volume of air freight also fell for an 11th consecutive month in September. Brian Pearce, Iata chief economist, told the Airlines 2050 conference in London in October: “Business confidence has dipped sharply. Europe has seen a series of bankruptcies. The industry has lost the ability to recover its cost increases. Air cargo is collapsing. In revenue terms it has fallen 10%.” The 2018-19 edition of this report noted


growing pressure on yields and increasing number of airline failures even as major carriers in Europe and North America reported substantial profits. Those trends continued in 2019, although increasingly the failures stood out. Thomas Cook Airlines ceased flying in September when its parent group went into liquidation, although German carrier Condor continued flying with a


European carriers rein in expansion as overcapacity bites but major global airlines continue to post hefty profits


government loan and the Scandinavian operation was reborn as Sunclass Airlines. Aigle Azur of France and Adria Airways


of Slovenia also ceased flying in September, as did XL Airways France – 11 years after one-time parent XL Leisure folded. UK regional carrier Flybmi called in administrators in February, as did Berlin- based Germania. Icelandic carrier Wow Air – which flew from Gatwick, Stansted and Edinburgh – folded in March. In India, the country’s second-largest carrier, Jet Airways, was grounded in April. Leading airline bosses forecast further


failures. International Airlines Group (IAG) chief executive Willie Walsh told an Airlines for Europe summit in March: “There are airlines in a very weak position.” Lufthansa chief executive Carsten Spohr agreed: “There is an unhealthy element in Europe’s airlines.” And Ryanair chief executive Michael O’Leary suggested: “The industry is moving inexorably towards five airline groups controlling 80% of traffic in Europe.” Norwegian Air remained the subject of


speculation after IAG confirmed in January it had no interest in pursuing an acquisition and sought to retrench following rapid growth. Founder Bjorn Kjos stood down as chief executive in July. The number of failures led to renewed


UK AIR passenger numbers


appear poised to pass 300 million (Figure 43). Airport passenger numbers have risen without a corresponding increase in the number of flights (Figure 44)


150 200 250 300


FIGURE 43: UK AIRPORT PASSENGER NUMBERS, 1998-2019


240m 215m 180m 158m 211m 221m +2%


% change 2018 v 2017


1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 20182019* All passengers, to nearest million *12 months to August Source: CAA


238m


focus on insolvency and repatriation arrangements. In the UK, the Airline Insolvency Review, set up in the wake of Monarch’s collapse in October 2017,


287m 292m 295m 271m


Heathrow Gatwick


FIGURE 44: TRAFFIC INCREASE AT UK’S BIGGEST AIRPORTS, 2007-18 0%


+15% +8%


Manchester Stansted Luton


Edinburgh Birmingham


% change 2007-18


-2% +5%


+18% +16%


+70% +3% +59% 0% +37%


-10 0 10 20 30 40 50 60 70 80 Airports handling 10 million-plus passengers a year Source: CAA


Travel Weekly Insight Report 2019-20 29 +31% +29%


Flights Passengers


Passengers (million)


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