Europe’s Largest Domestic Airline Markets May Never Recover From the Pandemic

Photo credit: Air France is growing its connections with TGV high-speed trains at Paris' Charles de Gaulle airport. Airline Weekly / Edward Russell

A shift is underway in how Europeans get around. Air travel is still king with discounters, like Ryanair and Wizz Air, carrying record numbers of fliers around the continent. But in some of Europe’s largest domestic markets, trains are emerging as clear winners.

Airline seats in France and Germany, two of the continent’s largest aviation markets — both within Europe and globally — are down double digits since 2019. There are 49 percent fewer airline seats in Germany today than there were in 2019, Cirium Diio schedule data for the second quarter shows. And seats in France are down 20 percent over the same period. Domestic seats are also down in Finland, Norway, Sweden, and the UK.

Several domestic markets, particularly those in southern Europe, do continue to grow. Seats in Greece are up 10 percent, Italy 9 percent, and Spain 7 percent in the second quarter compared to four years ago, according to Diio. This growth comes despite robust rail networks in Italy and Spain; though the latter’s system focuses primarily on Madrid and Barcelona, and not connecting secondary cities. Greece, on the other hand, has limited ground transport options given its primarily archipelagic geography. The three countries are also among the air travel recovery leaders as fliers have flocked to warmer, outdoors-oriented markets.

“We’re never going to go back — we’re not going to go back to the [pre-crisis] levels,” Air France-KLM Chief Financial Officer Steven Zaat said on the French domestic market in July 2021. And while at the time Zaat’s comments were true for Air France, it is increasingly clear that the entire French domestic airline market is unlikely to fully recover amid broad shifts in the way people travel.

Anne Rigail, CEO of Air France, said in March that the shift on routes like Paris Orly to Marseille has been “so strong [and] so quick,” that the airline was forced to reactively slash schedules.

French rail operator SNCF is seeing record ridership on its high-speed TGV and long-distance trains. Ticket sales on these trains were up 10 percent from 2019 levels to a record 28 million last summer, a SNCF spokesperson said. And this summer, the rail operator expects further increases with forward sales “really positive.”

France stands out as being the sole country in Europe to ban domestic flights where trains can make the journey in two-and-a-half-hours or less as part of a climate law aimed to cutting carbon emissions. Air France said it has suspended three routes from Paris Orly airport as a result. Recent criticism of the law has focused on the fact that connecting flights still operate — for example ones to Air France’s hub at Paris Charles de Gaulle airport — and that initial proposals sought to ban flights on routes where trains made the journey in four hours or less, which would have significantly increased the number of affected routes.

“We see an increased change in behavior of the customer on the point to point [domestic] routes lately,” Rigail said in March. “Maybe because there [are] a lot of topics around lowering the consumption of energy. But also in the government recommendations in France, they recommended all the public companies to prefer the train under four hours of travel.”

Corporate travelers, the bread and butter for airlines like Air France, have shifted in even greater numbers to trains, Rigail added.

Germany is seeing a similar travel mode shift. Domestic policies like the so-called nine-euro ticket for regional and medium-distance trains have promoted rail travel within the country. And rail operator Deutsche Bahn has recently opened new lines, for example a new high-speed track between Stuttgart and Munich, that allow for more, faster trains. The railroad carried 132 million passengers on its long-distance trains last year, below the pre-pandemic high of 152 million but exceeding 2019 numbers during the peak summer months.

“Demand is good and is continuing to grow strongly,” Deutsche Bahn CEO Richard Lutz said in March. “We may well set a new record in 2023, with significantly more than 150 million travelers on our long-distance trains.”

While Lutz did not comment on corporate versus leisure travelers, Lufthansa Group CEO Carsten Spohr said earlier in May that they do not expect 100 percent of domestic Germany corporate demand “ever coming back.” Lufthansa, as well as other airlines like EasyJet, has shifted aircraft and resources away from domestic German routes and to other European and international markets.

Air France and Lufthansa’s decisions to shift aircraft out of their respective domestic markets comes amid a global push to reduce carbon emissions. Both airlines have committed to net-zero emissions by 2050, and significant reductions during the intervening 27 years. The industry is embracing everything from sustainable aviation fuel (SAF) to electric and hydrogen-powered planes to achieve its targets. And a renewed push for “air-rail connections,” or tickets that include both flights and trains on a single itinerary, are widely seen as an easy and relatively quick way to cut emissions on some shorter routes.

Air France has recently expanded the number of destinations covered by its Train + Air partnership with SNCF, and is working to improve the on-the-ground connection experience at Charles de Gaulle. Lufthansa has similarly recently expanded its Lufthansa Express Rail tie up with Deutsche Bahn at the Frankfurt airport, and the German rail operator has even become Star Alliance’s first multimodal partner. And in its ITA Airways deal announcement Thursday, Lufthansa devoted an entire paragraph to how it aims to develop “intermodal transport for feeder traffic” with Italy’s Ferrovie dello Stato Italiane railroad at Italian airports.

Delta Air Lines, Iberia, KLM, Swiss Air, and United Airlines have also recently expanded partnerships with rail operators.

Air-rail connections, however, still account for a very small percentage of airline traffic. Air France sees about 160,000 Train + Air passengers annually, and Lufthansa roughly 575,000 Lufthansa Express Rail customers.

“We will definitely increase [the number], because of [the] better experience [and] the fact that a lot of people buy separate tickets at the moment,” Rigail said of Air France’s plans for its Train + Air partnership.

At the same time Rigail was clear: Air France has no plans to resume the domestic France schedule it flew in 2019.