After eight weeks of constant capacity reductions, we’re seeing some signs this may be the bottom and that we are at the lowest point of current scheduled capacity levels. Airlines continue to remove capacity from the last weeks of May and further months, showing reduced optimism for a fast return of demand. But the size of capacity in the current week is not going down any more.

We continue to monitor the data from the ch-aviation capacities module.

The size of the capacity for the current week (May 4-10) is 30.9 million seats. Compared to the airlines’ published schedules in the middle of March, before COVID-19 spread worldwide, it is 29% of the size; airlines expected the global weekly demand will be 105 million seats in the middle of May.

The optimism comes from the fact that capacity for the current week has stayed at similar levels for last four weeks –32.9 million to 31.2 million to 32.6 million to 30.9 million. We do not see the cuts we saw when the crisis hit, which prompted airlines to remove tens of millions of seats every week.

Still, the pessimism spreads to further weeks, and airlines do not see a fast recovery.

In Asia, the scheduled capacity is not reduced any more and the scheduled number of seats for the current week is slightly bigger than week before. We saw 18.9 million seats scheduled for the last week and the current week has 19.5 million seats scheduled. Still, this is less than half of the seats scheduled in the middle of March, but the largest continent in terms of aviation market size shows the first signs of possible recovery.

The main source of the optimism in Asia is China’s domestic market.

We see the scheduled domestic capacity in China is more than 10 million seats for the current week (March 4-10) This is the first time since COVID-19 hit China that airlines scheduled more than 10 million seats for the domestic flights. Airlines stay even more optimistic for the upcoming weeks and see demand growth in the end of May and for the month of June.

Our grounded fleets analysis in the ch-aviaton fleets advanced module also shows China is the country with the smallest percentage of grounded aircraft — 25% of aircraft are now grounded in China, while the world‘s average is 58%.

Airlines in North America are still searching the bottom levels of demand with no optimism for any recovery in May. The current week has only 6 million seats scheduled for flights from North America – that’s only 22% of the market estimated two months ago. Airlines continue to update their schedules, so we expect further changes in this region.

Europe is another continent where we possibly see the bottom has been reached and airlines are turning to recovery. We see that a few airlines resumed part of their services in the beginning of May. Still, the road to the recovery will be slow and painful, but the capacity levels are not being reduced anymore. The current week has the capacity of 3.5 million seats, while we saw 2.5 million seats scheduled two weeks ago. Yet this is only 13% of the market size we considered to be “normal” before COVID-19 hit the continent.

The picture is similar in South America. The current week has 12% of the “normal” capacity scheduled, and the continent has the flattest curve for the remaining weeks of May. Still, the current week’s capacity is not going down anymore, so we could see this is the bottom of the scheduled capacity levels in the continent.

In Africa, airlines are still looking for the bottom and the situation remains dynamic. The market size in Africa is less than 1 million seats now and still continues to decline week after week.

The most pessimistic region remains Oceania, where airlines have almost zero expectations of any traffic recovery in the month of May. Also, with this week’s update, we see almost no change in airlines’ scheduled capacity. We understand the airlines have reached the bottom-peak level and are waiting for better times.

We will continue to monitor the situation on capacities and will post on our blog. Follow us here and follow our #chaviationcovid19updates on Linkedin.

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