Fears for European Airlines: 700 new aircraft drive chronic over-capacity

Growing fears for the future of European airlines are being magnified by the huge numbers of new aircraft entering service.

Already in 2019, some 300 new single aisle aircraft have been added to European airline inventories, adding some 45,000 seats – (based on 150 seats per aircraft average) multiply that by an average of four flights per day and then by 365, and it’s a staggering 65,700,000 seats a year – equal to the entire population of the UK.

The rise in aircraft numbers this year is almost entirely Airbus deliveries with 737 Max not being delivered on schedule. Orders placed in haste during the good times of 2014-15 are now due for delivery.

That in turn is worrying analysts and some airline managers – in 2020 some 400 new aircraft – and around 87,600,000 new seats will be added to European airline inventories, with back orders for the 737Max starting to arrive in force.

These seats have to be sold, and the one thing gluts in seating create are low prices. Airlines get desperate and prices suffer.

When pricing reaches rock bottom – which may not be clear to passengers because aviation taxes are often as much as 90% of a low cost fare, airlines quickly get into trouble.

The massive RyanAir, and easyJets will suffer but survive, the likes of Wizz, Norwegian and smaller airlines like BlueAir, Aegean and others, will find it painfully difficult to survive a savage price war.

There’s already acceptance that one or more medium airlines are doomed – it’s hard to determine which as circumstances and markets are susceptible to the most unlikely disturbances.

In a recent inter-airline meeting at Paris, every one of the major airline CEO’s were making non-specific comments about who would fail, but all agreed one or more most certainly will.

The problem is none of the airlines want to cede any ground to any of the others. If they do, if a competitor fails and they could have profited from that route, they risk not being there to pick up the pieces.

It’s almost like a game of aviation Chicken. Nobody wants to be first to accept reality, just in case they can profit from the demise of another and live to fight another day.