A quick update on the London - Spain market
A week is a long time in today’s airline business and we are all watching closely to see how well the post lockdown outbound leisure market goes as airlines start to ramp up capacity.
So I thought I’d check in again on developments since my last post on the UK’s biggest outbound tourist market.
Published capacity has started to fall
In the last post, I noted that the published schedules for the first week of August looked very unreliable, especially easyJet’s which looked implausibly high. A week later total published capacity has reduced by 8% and now stands at 27% below the same week in 2019.
However, it has only been the IAG carriers cutting back, trimming schedules by 22% in total for British Airways, Iberia and Vueling.
With only two weeks to go, the expected significant cut backs to easyJet’s published schedules have still not materialised. The only real change made since last week has been to push back the date for resumption of services to Bilbao until the start of September.
Pricing is converging
When we looked last week, there were some big disparities in average selling prices. Since then, things have started to converge.
Source: expedia.co.uk
British Airways had the highest average prices last week and that remains the case, but they have been gradually bringing their prices down to a more reasonable premium over the competition. Taken together with the capacity reductions since last week, that suggests to me that their “yield maximisation” strategy might be leaving them a bit short of bookings.
At the low price end, Vueling and Air Europa have made big increases as we get closer to departure, coming more into line with the larger players in the market.
Neither easyJet nor Ryanair have really changed their pricing since last week. In the case of easyJet, perhaps they are still waiting to see how bookings come in before making final adjustments to capacity and last minute pricing.
I guess I am not surprised that Ryanair haven’t done much with their pricing since last week. They never seemed to believe in revenue management in normal times and still seem to be adopting a “set and forget” approach to pricing in these more volatile days.
