Europe’s Many Markets: Each sub-region of Europe has its own unique trends. But everywhere, things are changing.

Some universal truths about Europe’s airlines emerged during the opening quarter of 2018. All enjoyed strong demand conditions, in pretty much all markets, all segments and all classes of service. They were all shielded somewhat from the ravages of spiking fuel prices, by relatively strong currencies against the U.S. dollar and in some cases hedge protection. All benefited to some degree by the bankruptcies of Air Berlin, Monarch and Alitalia. And all benefited from an uptick in the continent’s economic growth.

But Europe’s airlines were all over the map in terms of financial performance, strategic positioning, labor relations and even prospects for survival. Different sub-geographies of Europe, meanwhile, are each changing and evolving in their own ways. Here’s a closer look at what’s happening in different areas of the continent, grouped into seven different sub-regions:

• The British Isles (U.K. and Ireland): It’s here where you’ll find the world’s busiest airline market in the world. London is served by six airports and is the single biggest market for five of Europe’s most important airline companies: IAG, Virgin Atlantic, Ryanair, easyJet and even Wizz Air. It’s also the most important longhaul base for Norwegian. London’s infamous airport capacity shortage, while surely stunting the U.K.’s economy, helped British Airways perform exceptionally well in 2018’s first quarter. Insufficient airport capacity wasn’t the only thing that pushed up fares, however. So did strong premium demand, most importantly from financial, legal and consulting firms, and most importantly on U.S. transatlantic routes. After a sharp decline against the U.S. dollar in 2016, the U.K. pound strengthened during all of 2017 and into Q1 of 2018. That wasn’t great for Virgin Atlantic, which generates a lot of U.S. point-of-sale traffic, and separately suffered from heavy exposure to the hurricane hit Caribbean. The pound strengthened some too against the euro in the back half of 2017, boosting U.K. shorthaul outbound tourism. TUI and Thomas Cook, both big in this segment, see Brits flocking back to Turkey, where the pound goes especially far. Naturally, Monarch’s demise had a big impact on U.K. shorthaul tourist markets, with its slots passing to IAG. Jet2 is building a Stansted base, Primera is flying across the Atlantic from Stansted and Flybe is now serving Heathrow. Thomas Cook and TUI are active in Manchester.

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