When Pigs Fly: For the airlines of Portugal, Italy, Greece and Spain, the yoke of Europe’s long slump is lifting

When Pigs FlyIt’s not a very flattering term, and it wasn’t intended to be. The four economies of southern Europe—Portugal, Italy, Greece and Spain, came to be known collectively by the unfortunate acronym formed by the first letters of their names: the PIGS. Since the turn of the decade, all have experienced recession, indebtedness, joblessness and—indeed—airline sector turmoil.

But after a half decade of darkness, the PIGS see signs of light. And although economists aren’t yet ready to call them rabbits, Portugal, Italy, Greece and Spain, with great help from their airlines, are starting to bring home the bacon. During the fourth quarter of 2013, in fact, in a dramatic turnaround, airport traffic in all four countries increased. Prior to that, three of the four had been shrinking quarter after quarter.

Portugal is the exception. And it has more or less been the exception throughout the eurozone crisis. Its economy suffered just as much as any other, but its airline sector held up relatively well thanks to sustained growth by Ryanair and easyJet—growth the company that owns the country’s airports attributes, in part, to airport charges it claims are 23% below the average of other comparably sized European facilities. TAP Portugal, too, avoided the fate of some other midsized European legacy carriers by exploiting its strength to Portuguese-speaking Brazil and Africa, enabling it to grow passenger counts another 5% y/y in 2013, a year in which its LCC competitors, by the way, collectively grew 9%. Overall, airport traffic in Portugal kept growing while the other PIGS were shrinking, rising 1% in 2011, 7% in 2012 and 5% in 2013. In the final month of 2013, moreover, traffic jumped 9% y/y, led by Lisbon, whose traffic has increased 8% in the past two years. In the summer of 2012, Emirates made Lisbon part of its giant network. That same summer, easyJet opened a Lisbon base. The year before, Ryanair opened a base in Faro. And the year before that, it opened one in Porto, Portugal’s second busiest airport and one that—no surprise—has grown substantially too.

And 2014 is likely to get even better. In April, Ryanair will make Lisbon a base as well, challenging both TAP and easyJet. TAP itself, never mind the possibility of merging with a South American carrier, plans no fewer than 10 new destinations this year, including four more in Latin America (Bogotá, Panama City and the Brazilian cities Manaus and Belém). Want more? US…
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