Small Carriers Fill European Service Gaps Left by Major Airlines

(GERMANY) Small carriers are moving quickly to restore flights in parts of Europe that lost links after major airlines pulled back, with DAT (Danish Air Transport) set to launch new services from a northwest German city that lost all scheduled flights when Lufthansa withdrew in 2024. Announced in August 2025, the move underscores how regional airlines are stepping into gaps across European aviation as consolidation, tight aircraft supply, and labor shortages push large groups to focus on big hubs and high-yield routes.

The trend isn’t small. Capacity in Europe for Q1 2025 reached 101.5% of 2019 levels, but growth has flattened since mid-2024 because of supply chain constraints, staffing challenges, and airspace congestion. Europe’s top 10 airline groups—Lufthansa Group, Air France-KLM, IAG, Ryanair, easyJet, Wizz Air, Turkish Airlines among them—are outperforming the broader market. Yet their focus on core city pairs and busy hubs leaves many smaller cities with thinner, or no, scheduled service.

Consolidation remains a key backdrop. Big carriers are pursuing minority stakes and joint ventures rather than full mergers to reduce regulatory risk. The European Commission’s competition team has kept a tight hold on deals that could squeeze consumer choice. That slower, more cautious consolidation has created space for small carriers to operate independently and rebuild routes that no longer fit within the cost structures of the largest airline groups.

DAT’s strategy and immediate impact

DAT’s leadership framed the strategy in direct terms.

“We see real opportunity in markets abandoned by the majors. Our flexible fleet and cost structure allow us to serve communities that would otherwise lose all connectivity,” said CEO Jesper Rungholm in August 2025.

Key details of DAT’s launch:
– 12 weekly frequencies on the new German route.
– Restores about 60% of the seat capacity lost when Lufthansa exited last year.

This move will be watched as a test case for whether regional demand can sustain routes without the scale of legacy carriers.

Market concentration and regional effects

The shift comes as concentration rises. The six largest airlines control 72% of Europe’s airline capacity, up from before the pandemic, according to sector data shared with industry groups. That concentration, coupled with a renewed focus on dense routes, is reshaping who gets air service—and who doesn’t.

Regional airports are feeling it most:
– Since 2023, more than 30 small and medium-sized airports in Europe have reported a net loss of scheduled flights.
– In response, small carriers now provide as much as 40% of flights at some of these airports in 2025, restoring links to national hubs and cross-border destinations that would otherwise require long rail or bus trips.

Why small carriers are expanding now

Regional airlines are filling gaps with a practical playbook that matches modest demand with flexible assets. The typical steps include:

1. Market identification: watch for major airline withdrawals and study routes where those exits leave clear demand.
2. Regulatory application: request slots and traffic rights, often with support from local authorities or airport incentives.
3. Fleet deployment: send smaller, efficient aircraft—ATRs, Embraer E-Jets, or Saab turboprops—to limit costs and match seat counts to real demand.
4. Service launch: start flights, sometimes with public service obligation (PSO) support or regional subsidies to keep prices reasonable.
5. Network adjustment: add or trim frequencies based on load factors and route performance.

Airport managers in secondary cities are leaning in, offering marketing support or fee relief to restart links. The European Regions Airline Association has pressed for fairer slot access and rules that help carriers maintain regional connectivity.

European Commission officials have signaled they want consolidation that does not crush competition or strand regions. They’ve indicated room for new entries where markets clearly need replacement capacity, aligning with broader mobility goals posted by the Commission’s transport arm. Official guidance on regional connectivity and slot policy is available from the European Commission’s Directorate‑General for Mobility and Transport at https://transport.ec.europa.eu.

Operational and consumer concerns

The pattern is visible on the ground: major airlines have pared networks at secondary and tertiary airports, citing cost pressures, fleet shortages, or strategic refocusing. Small carriers are stepping into these spaces, often willing to work with thinner margins and leaner schedules if the route economics line up.

Key trade-offs and risks:
– Communities get back air links, but often with fewer flights and less choice of departure times.
– Where one or two small carriers operate a formerly competitive route, consumer groups worry about price pressure and coverage gaps if a carrier cuts back later.
– Small fleets are vulnerable during maintenance peaks or weather disruptions; a single cancellation can have outsized effects on travelers.

Aviation analysts say the long-term picture depends on:
– steady passenger demand,
– airport policies that keep costs under control,
– access to affordable aircraft and trained crews.

If supply chain problems continue—slower deliveries of regional aircraft or scarce spare parts—airlines may struggle to grow or even maintain current frequencies. Crew hiring and training remain pressure points across Europe.

Human impact: visas, work, and study

For people who live, work, or study in smaller European cities, even a few flights per day can make a large difference. Restored services:

• Support weekly commutes for cross-border workers.
• Help students reach foreign campuses at the start of term.
• Make it easier for families to stay connected.

Practical effects by group:
– For passengers: residents in affected regions regain access to air travel, though often with reduced frequency and higher fares compared with pre-2024 levels.
– For airports: small and regional airports bring back traffic and revenue, but schedules can be less predictable and margins tighter.
– For small carriers: new routes bring growth opportunities, along with exposure to fuel price swings, labor shortages, and competition from rail and long-distance buses.

Consumer advocates warn that reduced competition can mean higher prices and fewer departure times. For workers tied to fixed shifts or families making connections, that fragility matters.

Policy outlook and timing

The role of public policy will be key. Officials are reviewing slot allocation and PSO frameworks, with potential updates expected in late 2025. Possible outcomes:

• Changes that make it easier for small carriers to gain or keep slots at congested airports could strengthen regional links.
• Stricter rules without tailored support may push carriers back out of thin markets, leaving communities exposed again.

The European Commission says it aims to balance competition, consumer choice, and regional access as it weighs changes to slots and PSO rules this year.

What to watch in late 2025

Two tracks will define the rest of the year:

1. Continued expansion by small carriers is likely as long as the largest groups stick to primary routes and regulatory hurdles keep full-scale mergers at bay.
2. Operational risks could test these gains: rising fuel costs, ongoing labor gaps, and further delays in receiving new aircraft or engines.

Other factors to monitor:
– Load factors and fare levels — if planes fly reasonably full at sustainable fares, routes can hold.
– Municipal incentive programs — how many incentives are offered and for how long.
– Market share shifts — VisaVerge.com reports small carriers already account for up to 40% of flights at some regional airports in 2025.

DAT’s Germany launch is a test case: with 12 weekly frequencies and roughly 60% of pre-2024 seats restored, the airline will try to prove steady demand exists without the scale of a legacy carrier. If successful, similar airports across Germany, Scandinavia, and Eastern Europe may see more schedules from DAT and its peers.

Practical guidance for travelers and communities

For travelers:
– Watch schedules closely and book early where frequency is limited.
– Expect smaller aircraft with fewer seats and faster sell-outs.
– Build in buffer time for essential trips (exams, medical visits, job start dates) to reduce risk from cancellations or missed connections.

For local leaders and airports:
– Evaluate how much short-term incentive spending is justified to restart links.
– Encourage local businesses to commit to regular travel if they want routes to survive.
– Monitor load factors and be ready to adjust incentive levels as needed.

The balance between competition, consumer choice, and regional access will decide whether 2025 becomes a turning point for regional air service—or just a brief pause before more cuts. For now, DAT’s move in Germany is a clear sign: when large groups pull back, small carriers will try to keep Europe’s smaller cities connected.