More profitable airlines: how low-cost airlines lead the recovery

Low cost airlines dominate European traffic, reinforcing the supremacy they already held before the pandemic, leaving the intercontinental markets, the most profitable ones, to the leading companies. If in the Old Continent more than half of the flights (54%) fly under low cost flags, the phenomenon is even more pronounced in Italy where three out of four flights (73%) are operated by 'no frills' carriers.

More solid, more aggressive and, above all, competitive: Ryanair, easyJet and Wizz Air emerge strengthened from the pandemic in terms of turnover, profits and, above all, seat capacity offered with growth above the levels reached in 2019. The large carriers such as Lufthansa, Air France-KLM and IAG (British Airways and Iberia) have also recovered ground, but more slowly weighed down by debts accumulated during the crisis. "Coming out of the pandemic crisis that had left thousands of planes grounded for months was not a foregone conclusion," explains report author Michele Mauri, managing director of consultancy AlixPartners. "The drivers of this success are twofold: the first is undoubtedly the post-Cvid demand boom, with passengers demonstrating that air travel has become an essential asset, even in a situation of economic uncertainty. Added to this is the increase in ticket prices, which in some cases has been 50% higher than pre-Covid fares'.

Almost all of the carriers in the sample (see table on page) recorded an operating profit before tax (EBIT) above pre-season levels between January and December 2023, with peaks such as Ryanair at 21% compared to 11% in 2019. The exception is Wizz Air, which posted zero EBIT last year compared to 16.5% in 2019. The good health of the sector is also shown by the growth in turnover if we exclude Lufthansa, which has confirmed its 2019 turnover in 2023.

For the airlines, the bet was to increase the capacity of seats on offer by intercepting the boom in demand that emerged after the pandemic: if calculated in terms of ASKs (available seat kilometres), i.e., scheduled seats multiplied by kilometres, in 2023 in Europe the capacity on offer was 96% compared to 2019, only in 2024 is it expected to exceed the pre-crisis level with an index estimated at 103% when considering the flights already available and bookable until December.

If in 2023 Germany and France recorded even lower capacity levels than in 2019, on the contrary, Italy was able to benefit from greater growth (101% compared to 2019) second only to Spain and is estimated to reach 110% in 2024. This recovery is mainly due to the growth of low-cost airlines, since Ita Airways in 2023 decided to maintain its offer at 36% compared to 2019. Airports are also growing for both domestic and international flights with Milan growing strongly for intra-European flights and Rome for intercontinental flights.