FOCUS-Airlines flying blind into summer capacity sweepstake

* Airlines' summer plans beset by uncertainty

* Last-minute booking clouds demand

* Low-cost carriers seek to exploit flexibility

By Laurence Frost and Sarah Young

PARIS, Feb 2 (Reuters) - European airlines buffeted by
successive lockdowns have little idea what kind of summer to
expect. But they must place their bets anyway.

Time is short to commit to flight schedules for the main
holiday season, whose profits usually tide the industry through
the winter, but whose outlook has never been so uncertain.

Cash-strapped carriers must decide when to trigger the
costly process of returning parked planes and furloughed staff,
or even rehiring. Getting it wrong means losing more money on
half-empty flights or – if demand is underestimated – handing
badly needed business to rivals.

"It's like trying to sail a boat when the wind changes
direction every couple of minutes," said Robert Boyle, a former
British Airways executive whose firm Gridpoint
Consulting advises the industry.

"I've spoken to airlines that normally do about three
versions of the schedule, and now say they're on their 50th."

Scheduling for the peak season opening on March 28 is a
guessing game with higher stakes than ever, as the risk of a
second lost summer hangs on the race between faster-spreading
COVID-19 variants and vaccine rollouts.

The first wave of lockdowns saw airlines drop 72% of the 755
million seats scheduled in Western Europe last summer, according
to flight data specialist OAG. Many of the 684 million summer
2021 seats now posted are also likely to end up cancelled.

"Most airlines are currently planning to operate quite large
parts of their networks but will inevitably scale back," OAG
analyst John Grant said, rendering capacity plans "pretty
meaningless".

PLANNING NIGHTMARE

Further complicating the task, consumers beset by
uncertainty have embraced last-minute booking on a scale that
haunts the nightmares of network planners, who usually track
early reservations against the previous year's curve.

"Booking patterns are out the window," Grant said. "So
there's an increasing use of analytics and metasearch data,
social media chat and Google to try to identify patterns."

Alphabet's Google and online travel marketplace
Skyscanner have moved to fill the void, with tools allowing
airlines to extrapolate real demand from internet searches.

Consumers "look at Skyscanner probably earlier in their
thinking," said Hugh Aitken, the company's flights chief. "We
can give that pent-up demand view."

Last month, for instance, Skyscanner saw a 20% rise in
October UK-Spain searches. Its data also show how quickly demand
can snap back when restrictions ease: on the day Pfizer's
vaccine was pronounced effective, UK bookings jumped 37%.

"Past trends are no predictor," Aitken said. "Airlines will
have to be very nimble with their decision-making."

Air France-KLM said it acted on online search data
to order a swift fourfold ramp-up in French Caribbean flights
that brought in much-needed cash over Christmas.

The Franco-Dutch carrier and German peer Lufthansa
- another Google data client - both say the large majority of
their planes can return at short notice.

LOW-COST OFFENSIVE

Summer also promises the first salvos in a recovery
offensive by low-cost carriers, which have used previous crises
to ratchet up their market share.

A freeze on entitlements to take-off and landing slots at
once-busy airports has eased some of the pressure on incumbent
airlines.

But budget carriers are likely to pull off a nimbler
restart, observers say, thanks to more variable costs and robust
balance sheets to underpin risk-taking and discounting.

"It's not only much easier to ground all of your fleet, it's
easier to put your aircraft back in the sky," said Geoffrey
Weston, a Bain & Co. partner who heads the management
consultancy's global transport business.

"You're winning on the way down and you're winning on the
way up."

Irish budget carrier Ryanair is already "out there
recruiting cabin crew at the moment", Chief Financial Officer
Neil Sorahan said - despite the cloudy outlook.

"It will lead to some extra costs," Sorahan told Reuters.
"But again we want to be ready for when things spike up."

With simulator access limited, Ryanair has even run some
empty flights to keep pilots' hours above the requirement for
immediate return to service, CEO Michael O'Leary said.

EasyJet is also focused on flexibility, CEO Johan
Lundgren said, but added: "The sooner we can have transparency
on how these restrictions are unwound, (the) better."

As a hedge against the deep uncertainty, airlines are likely
to push point-to-point trips to European summer destinations.

Planned flights to France, Greece and Portugal are down by
less than 8% on pre-crisis 2019 levels, while Egypt and Tunisia
are down by a quarter, according to OAG data - although all are
set to fall further.

If summer travel gets a green light it may come very late,
said Wizz Air CEO Jozsef Varadi, and the ultra-low cost
carrier can restore flights in under three weeks.

"People will want to get away from cities," Varadi told
Reuters. "Seaside destinations will be incredibly popular."
(Reporting by Laurence Frost in Paris and Sarah Young in
London. Additional reporting by Conor Humphries in Dublin.
Editing by Mark Potter)