Airlines cut capacity, passengers suffer

Expert: “We have 10 to 20% overcapacity in Europe”

As high fuel prices and rising taxes and airport charges force European airlines to cut back on capacity during 2012, passengers are grumbling. They pay higher fares, but see fewer flight choices and crowded aircraft. Member airlines at the Association of European Airlines cut capacity by 4.6% in the first half of this year – after an increase of almost 23% between 2004 and 2011.
“We have 10 to 20% overcapacity in Europe, based on the number of seats offered,” says Philipp Goedeking, managing director and air industry expert at the consultancy AlixPartners.
Lufthansa added more than 50% capacity between 2007 and 2011, including the seats resulting from the acquisition of carriers like Brussels Airlines and Austrian Airlines. It has cut its plan for capacity expansion in 2012 from 12% to just 0.5%. Air France-KLM has also scaled down capacity growth, while capacity at IAG grew only 2.6% in the first six months of the year.
Some airlines are opting to retire older aircraft sooner while delaying the delivery of new planes. But the good news is that airlines need to go carefully – no carrier wants to be caught out with too little capacity when demand picks up again.
[photo courtesy Copenhagen Airports]