EXCESS capacity on transatlantic routes and internal European markets will balance out next year to provide a more healthy market, according to airline analyst Chris Tarry.
Both markets have been saturated by excess capacity over the past two years with bigger aircraft, more frequency and the advent of low-cost airlines.
But Tarry, analyst with Commerzbank Global Equities, said the market was likely to return to a state of equilibrium next year.
He said: ” This year has been a difficult environment with so much capacity. The heart of the problem is the North Atlantic where transatlantic capacity grew 12% last summer when growth was only 6%.
United Airlines and partner Lufthansa’s closer co-operation on transatlantic routes had dramatically increased capacity, and had American Airlines been able to co-operate with British Airways, the problem could have heightened, warned Tarry.
He added that the problem is less pressing in Europe, where capacity was up only 7% with underlying growth being 4%.
He said: “It isn’t all doom and gloom. We have seen the Asian market return to equilibrium after capacity was taken out and redeployed in the US two years ago.”