Today is the day that fully vaccinated passengers arriving in the UK from (most) EU countries and the USA no longer need to quarantine. Europe and the USA are the largest and most profitable markets for the UK’s five largest airlines, based on examining data provided to us by RDC Aviation. We examine the situation.
The largest markets from the UK
easyJet from London to across Europe was the largest passenger market from the UK in 2019, according to data obtained from RDC Aviation, the aviation data people. Approximately 30.7 million people were carried, with estimated profitability of £196 million (earnings before interest and taxes, or EBIT). That’s a finding when looking at the UK’s five-largest airlines: British Airways, Ryanair, easyJet, Wizz Air, Jet2.
easyJet’s London-Europe performance far outstripped Ryanair’s, mainly due to easyJet’s much higher average fare (including ancillary revenue). Of course, Ryanair had a much lower cost per passenger (£40 versus £63) and a higher seat load factor (96.5% versus 91.4%). It is notable that while easyJet carried about 14% more passengers, its cost to carry them was about 80% higher. Yet, neither of these were the UK’s most profitable market when broken down by airline.
BA to North America: ~£1 billion in profit
British Airways is estimated to have achieved just over £1 billion in profit (EBIT) to/from North America, based on RDC Aviation’s Apex profitability data. We previously explored how much it cost BA to fly an A380 to Los Angeles.
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This market, which includes Canada, was the fourth-largest from the UK by total passengers, yet the most profitable. Obviously, this was from a combination of much higher fares than larger markets across Europe and strong passenger volume. It is notable how much farther down the list the next long-haul market comes, emphasizing how crucial North America will be in the coronavirus recovery.
All about Heathrow to the USA
BA’s estimated profitability can be further broken down. London Heathrow to North America achieved approximately £905 million or 86% of the total. The carrier’s long-standing Gatwick leisure operation (mainly to Florida and Las Vegas) played an important role financially, especially given its relatively small size.
However, as you’d expect, it was really all about Heathrow to the USA, with an estimated £751 million (70%). This is why fully-vaccinated passengers from the US are so important, with the BBC reporting that BA saw a 95% increase in bookings from the US to the UK shortly after the easing of COVID restrictions was announced. (As the doubling of bookings was compared to the prior week, it does not mean booking volume was large.)
BA across Europe remains a problem
It has long been known that while BA’s Europe network plays a vital overall role, it has been unprofitable as a whole. This is especially given so much competition with low-cost and ultra-low-cost carriers.
Indeed, RDC estimated that BA’s Europe network lost over £200 million in 2019, with the lion’s share of this from Gatwick (-£131 million). In 2019, easyJet competed head-to-head on 87% of BA’s Gatwick Europe routes, according to OAG schedules information. BA currently plans to resume short-haul flying from Gatwick from the start of the winter season.
Nonetheless, there were pockets of relative strength for BA in 2019, particularly Heathrow to Italy, with its network spanning nine Italian airports. RDC suggests that EBIT of almost £14 million was generated due to a high average fare across two million passengers.
Will you be flying BA this year? Let us know in the comments.