Probably one of the most essential analyses we’ve done the recent months. We looked at worldwide cancellations and checked how airlines decrease cancellation rates per region and restart regular operations linked to vaccination rollout?
We must admit that the increase in vaccination rates has boosted our hopes of returning to what we used to call “normality.” People are looking forward to traveling and enjoy the summer holidays, and airlines are decreasing their cancellation rates and restarting their operation step by step.
Nonetheless, some airlines remain with high cancellation rates, and we decided to evaluate if there’s a defined pattern for this. Therefore, we decided to perform a regional, country, and specific airline analysis with data obtained from OAG. As a first step, we perform a general analysis per region regarding cancellations. However, we considered an additional factor—the airline business model. We wanted to understand if the cancellation rates also depended on the area and the airline business model. Moreover, we were interested in evaluating the impact on airline operations with higher vaccination rates.
Average Cancellation Rate per Region
From the analysis containing approximately 300 airlines, we could determine the following behavior from February to May 2021.
The Asia Pacific, as seen in the graph below, has one of the highest cancellation rates. Except for February, where the vaccination rollout was at a very early stage. In this case, there’s a higher cancellation rate for the Low-Cost in May. However, one reason can be that many of the airlines corresponding to the Low-Cost category are from India. Currently, the Delta variant is strongly affecting the population.
In Europe, the Middle East, and Africa (EMEA), the cancellation rate seems stable and decreasing for Low-Cost Airlines, but there’s a slight increase during May for the Mainline carriers. The reason for the general average increase corresponds to the 100% cancellation rate of two African airlines.
For Latin America, the situation is a bit different. In this region, we can see a higher cancellation rate for the Mainline carriers, even if the vaccination rates are also increasing. We have seen in the news that the region is currently one of the most affected by the virus, with the Gamma variant affecting mainly the territory of Brazil. Other countries such as Argentina, Colombia, Mexico, and Chile also show an increased number of cases having a substantial impact on hospital occupancy and UCI stations. However, the cancellation rates for the Low-Cost remain on low levels.
Going deeper into the analysis, we identified that one of the mainline carriers from Argentina ceased operations (at least during May), increasing the general cancellation rate for the region.
The scenario in North America looks very different than in the other regions. For both Low-Cost and Mainline carriers, the tendency for cancellations is decreasing significantly since February. As a result, Low-Cost carriers are almost reaching the 0% average cancellation rate.
Airlines with Cancellation Rates over 50%
To better understand the behavior of the rates and the root cause of the peaks, we continued to evaluate airlines that remain with a cancellation rate with over 50% of their regular operation.
Based on the analysis, we can also say that the lowest rate corresponds to North America as they have cancellations over 50% in only 4% of the airlines during February. However, from the 23 airlines analyzed during the following months, no airline had a cancellation rate over 50%.
From the total of airlines evaluated per region, this is the results identified:
Based on the data, we can observe that the most affected regions are Asia-Pacific and Latin America. However, the cancellation rate over 50% seems to remain relatively stable without increasing peaks since February. Thus, even though the scenario still looks challenging, we can identify that regions with a successful vaccination rollout are the regions with improved airline operations.
Additional KPIs to evaluate airline cancellation rate
We can consider further measures based on the data provided as an additional step on the analysis, for example:
• Airlines with an ‘Over 50% Cancellation Rate’ during the entire evaluated period
• Countries with the higher number of airlines with ‘Over 50% Cancellation Rate.’
• Airlines with a 100% Cancellation Rate
• Airlines with a 100% Cancellation Rate and returning to operations after a specific period
Comparing the regional situation in terms of COVID-19 vaccination rollout vs. the airline operations provides hopes to the industry. The regions with a successful vaccination rollout are also the regions with lower cancellation rates. In addition, the more population with the vaccine, the more people are allowed and willing to travel, giving a chance to airlines to restart their way back to regular operations.