The Airports Council International (ACI) Europe has released a comprehensive analysis of competition between airports in Europe, highlighting shifting dynamics as airline power tightens its grip.
According to ACI Europe, the market changes that have resulted from the Coronavirus pandemic have increased the power of airlines over airports. These include the expansion of Ultra-Low-Cost Carriers, speeding up airline consolidation and airline capacity management.
Moreover, the changes also include the level of route opening and closures along with changes in capacity on already existing routes, SchengenVisaInfo.com reports.
Commenting on airport competition, the Director General of ACI Europe, Olivier Jankovec, said that this phenomenon remains ignored by national regulators across the continent.
“Airport competition, of course, isn’t a bad thing, quite the opposite. But the fact is that the reality of airport competition remains largely ignored by national regulators across Europe. The result is airports being over-regulated with price caps and limited commercial freedom,” Jankovec stated.
Moreover, Jankovec also said that while the airlines enjoy unrestrained pricing power, the regimes do little to protect consumers, suggesting that only airlines are being protected. For this reason, it has been required that the parties involved look forward to further engaging with regulators on this.
The publication of ACI Europe notes that the COVID-19 pandemic shocked the air transport sector and has increased air competition across Europe.
The same highlights that low-cost carried provide an increasing share of flights. According to data, as of June 2022, low-cost carriers represented 37 per cent of all flights to, from, or within Europe, as well as 45 per cent of all intra-European flights. This represented a five per cent increase from the share in 2019.
In addition to the above-mentioned, the publication has shown that the top five European airlines, by capacity, have an increasing share of seats every year.
As for the routes, it has been stressed that many of them changed after 2019. More than 35 per cent of the routes flown by airlines to, from and within Europe in 2021 did not exist in 2019.
“Airlines are working to shorter planning horizons than was the case before the pandemic. This means they are more flexible in shifting capacity. As a result, airlines are also negotiating harder for discounts,” the publication further explained.
Moreover, the publication revealed that leisure passengers represent an increasing share of passengers. According to ACI, this increases the competitive pressure on airlines, and for this reason, leisure passengers are more sensitive to changes in prices.
“As airfares go up, leisure travellers shift to cheaper destinations, drive instead of flying, or stay at home,” ACI stated.
The same noted that of all European airports, the major ones are facing competitive pressures the most.
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