Ryanair, easyJet and Wizz Air to drive European budget airline market share

Ryanair, easyJet and Wizz Air are set to push the European market share for budget airlines next year, according to Bloomberg Intelligence’s 2024 European Airlines Outlook.

The report outlines that low-cost carriers are “intensifying” short to medium-haul competition, and that newer aircraft and labour productivity are giving airlines like Ryanair, easyJet and Wizz Air an advantage over their legacy rivals.

Bloomberg Intelligence (BI) suggests the three airlines will exceed 45 per cent of intra-region air traffic by 2025. While Wizz Air was credited with retaking the lead on growth rate, easyJet is targeting a disciplined 5 per cent annualised seat expansion from 2023-28, according to the report.

Conroy Gaynor, an industry analyst at BI, said: “European discount airlines are adding to their fleets more quickly than legacy counterparts, with newer aircraft and labour productivity proving an advantage.

“Wizz Air had 19 per cent annualised passenger growth from [the fiscal years] 2015-20, boosting operating leverage and bringing unit expenses closer to larger rival Ryanair, which achieved 10 per cent in the same period.

“The same figure for Ryanair was 5 per cent in the 12 months to October versus the equivalent in 2018-19, and 11 per cent for Wizz Air, despite the pandemic.”

He added that these airlines “are taking advantage of rivals exiting or restructuring”, for example when, “in the UK, Thomas Cook collapsed in 2019, followed by Flybe in 2020”.

But, the analyst said: “European airline consolidation progress in 2024 may pave the way to offsetting some margin threats.

“Pending deals include Lufthansa’s minority stake in ITA and IAG’s Air Europa purchase – Air France-KLM, meanwhile, is helping rescue Scandinavian Airlines.”

Gaynor explained that Ryanair can boost intra-region share as Wizz Air stumbles on engine issues and easyJet remains tepid on expansion”.

Meanwhile, BI’s 2024 market outlook determines that larger network operators like Lufthansa, Air France-KLM and IAG are driving consolidation to improve efficiency.

The report foresees three trends for the coming year, which it identifies as cost inflation, demand normalisation and market consolidation.