Commercial Air Traffic for Aero 80 Carriers

As we head towards the close of the second week in August, it would seem that the ceiling may have been put in. With operated flights up only modestly (via the Aero 80 dashboard), one must consider that without any sort of good news or massive shift in public perception, the climb higher may have stalled for now. Of course, when we slice things down the story does change a little bit.

Last week, with flights up over 30%, it seemed that the U.S. and Europe were keen on building capacity back up. Moving lockdown-weary customers to a much needed change of scenery sounds like a great idea in theory, but the data never lies.

Plateau or No?

Operated/Cancelled Flights in North America and Europe - Past Week Highlighted

While the above chart shows a lot of hope, the highlighted region is the point of focus here. Where we go from here will be interesting at this is either another step towards another addition of capacity, or this is about where demand response is reaching its cap. We're eternal optimists here at Kambr, but I will enter in a cue as to why this may be a plateau as opposed to another step on the airstair.

European LCC Update

EU LCCs Enter Flight Schedule Changes

A couple weeks ago, we ran a profile on these three carriers, discussing what the competitive nature of the leisure market would be. As we had stated there, Ryanair had only recently jump started their schedule, starting on July 1st, right after the easing of travel restrictions within the EU. Unfortunately, Ryanair cut their restart schedule from the initial 10,000 flights (66% of their schedule versus last year), down to 6,000 per month. One must consider this far reaching cut as a signal to an elongated flattening of operations on these two continents. It's also worth noting that easyJet has twice the capacity of Ryanair listed now, whereas easyJet normally operates a few thousand flights fewer each month. You should make your own opinion, but this signals that more cutbacks should be expected as the summer holiday customers dry up.

How Might Airlines Survive?

Alright, enough of the doom and gloom. The very titling of this weekly series indicates that there are not only cons to this pandemic, but also opportunities for airlines to reinvent and reignite passion within the airline industry. So how, as an airline executive, should you focus most of your efforts?

This certainly is not any sort of surprise, but domestic travel is going to continue to be the focus. As the hysteria of a pandemic begins to turn into a pragmatic balance between being safe and continuing to experience life, finding ways to generate interest in domestic routes will be paramount. I'll enter two more things for readers to chew on:

Why do these two bullet points matter? It means domestic, leisure travel to family or adventurous locations is the hot-ticket item for airlines looking for revenue right now.

A Case Study in Russia

Russian Domestic Flight Operations

Kambr recently analyzed metasearch data for routes within Russian domestic markets. While operations steadily increase (although plateauing like EU/NA), operations don't necessarily tell us much about what the market is demanding. What we found was that search data was helping point us to where demand was appearing, and thus where load factors were being driven up.

For example, on a route from Yekaterinburg (Koltsovo) to St. Petersburg (Pulkovo), we found operations had increased versus last year, pre-COVID. Although this is only one such example, we're seeing it to be a microcosm of the greater domestic situation. This is something that certainly exists in other countries across the globe.

Koltsovo-Pulkovo Flight Operations YoY

To help tie it all together, in short, flight data and carrier schedules may be beginning to show stagnation in the recovery, but that doesn't mean there aren't opportunities to help domestic customers see the beauty of their home country- something that many don't do when the French Riviera is a 50 euro flight away. We believe the opportunities certainly exist, the question is, can you find them?