European carriers face a mixed winter, with long-haul routes to the Americas looking tight and flights eastwards starting to feel crowded.
RBC Capital Markets says the supply picture remains most favourable across the North and South Atlantic, where capacity is still constrained, a setup that plays to the strengths of British Airways owner IAG.
Data from flight tracker OAG shows scheduled capacity between London and North America will fall year-on-year this winter, with BA, American Airlines and Norse Atlantic all trimming services.
That should support pricing on key transatlantic routes, which remain among IAG’s most profitable. Across Europe, overall capacity growth of about 4% suggests a steady market rather than one starved of seats.
By contrast, growth is running hot on routes between Europe and Asia or the Middle East, up 13% year-on-year, and on links between Eastern and Western Europe, which have surged more than 12%.
Much of the expansion comes from Wizz Air Holdings PLC (AIM:WIZZ), Turkish Airlines, SAS and Pegasus. RBC calls the build-up “eye-watering” and warns that oversupply could pressure fares.
Within the UK, scheduled capacity will rise by around 3% this winter, taking levels to 105% of pre-pandemic volumes.
Ryanair Holdings PLC (LSE:RYA), easyJet PLC (LSE:EZJ) and Jet2 PLC (AIM:JET2) are driving the increase, while Wizz is pulling back.
For Jet2 and easyJet, winter sun routes look more balanced: seats to Spain are up 5%, Turkey flat, and Greece up 4%.
Lufthansa and Air France-KLM face modest growth at home, around 3-4%, but the real concern lies in potential oversupply on Asian and Middle Eastern routes.
Meanwhile, intra-European flights remain steady, with no sign of material shortages to bolster ticket prices.
RBC’s takeaway is clear: flying west still offers the best odds for European airlines. Capacity constraints on the Atlantic should underpin yields for International Consolidated Airlines Group SA (LSE:IAG) and Aer Lingus, while ultra-low-cost carriers may find competition intensifying in the east.
After a run of strong summers, the balance of power in Europe’s skies may shift back toward those with the biggest stake in North America.