You have probably seen the headlines by now. Cancelled flights, queues snaking out of terminal doors, airports that plainly cannot cope with the number of people trying to fly. Staff shortages are a big part of it, and demand has come roaring back faster than anyone was ready for. So ForwardKeys dug into what is actually happening, looking at recent trends in intra-European flight bookings for travel in July and August, along with the changes in seat capacity. The picture is not pretty. Consumer confidence started slipping in the last week of May, and it has fallen off a cliff since. Last-minute bookings in the week leading up to 10th July were down 44% against 2019 levels. Amsterdam had it worst, down 59%. London was off 41%.
Here is one number that really tells the story. The ratio of partial cancellations and modifications to total bookings has almost tripled, from 13% before the pandemic in 2019 to 36% this summer, measured across 30th May to 10th July. That is a lot of people having their plans messed with.
All of this is chipping away at the industry's hopes for the season. Back on 30th May, total intra-European flight bookings for July and August were sitting 17% behind 2019. Seven weeks on, by 11th July, they had slipped to 22% behind. A five percentage-point slide in under two months.
And for Amsterdam and London it has been considerably rougher. At the end of May, July-August bookings from Amsterdam were 9% behind 2019, while London was actually 9% ahead. Since then they have dropped to 22% and 2% behind respectively. Do the maths and that is a 13 percentage-point slowdown out of Amsterdam and an 11-point one out of London.
Oddly enough, the destination that has taken the biggest hit from the Amsterdam slowdown is London itself. Bookings on that route went from 3% ahead of 2019 in the fourth week of May to 18% behind by 11th July, a drop of 21 percentage points. After that it is Lisbon at 18%, Barcelona at 15%, Madrid at 14% and Rome at 9%. Run the same exercise for London and the worst-hit destinations look different: Istanbul, where bookings have fallen 32%, then Palma Mallorca and Nice both at 12%, and Lisbon and Athens at 7%.
That five percentage-point booking slowdown from late May through 11th July? The supply side mirrors it almost exactly. ForwardKeys found that scheduled intra-European seat capacity has been trimmed by 5% across the continent. Amsterdam and London are once again out in front, cutting 11% and 8% respectively.
Olivier Ponti, VP Insights at ForwardKeys, put it like this: “One can think about this summer both positively and negatively. On the upside, it is encouraging to see a strong resurgence in demand following the pandemic, with summer bookings in May surging ahead of 2019 levels. That was excellent news for the travel, tourism, and hospitality industries, which badly need the business. However, things have come back so fast that airports and airlines have struggled to cope, which is causing chaos for the travellers whose flights are affected. While we can be confident that airports will eventually succeed in recruiting the staff they need, there are a few trends that give cause for concern. First is the increase in the price of oil, fuelled by the war in Ukraine, which will increase the cost of flying. Second is inflation (also a consequence of the war), which will likely leave most travellers less able to afford the fare. Third, the increased level of disruption is substantially dampening demand, as we are seeing a dramatic slowdown in last-minute flight bookings, plus an increase in cancellations. At the end of May it seemed we would see an exceptional summer for travel within Europe; but now it is more likely to be just a good one.”
Source : https://bit.ly/3PF5GfZ
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