The aeronautics sector still in the storm

Published on :

Another turbulent year for the airline industry. The Covid-19 pandemic has continued to hamper the resumption of travel in 2021. And the last blow came at the end of the year with the Omicron variant, which prompted states to maintain the restrictions. As a result, air traffic has still not returned to its pre-health crisis levels and volatility should continue to weigh on the sector at the start of 2022.

As soon as it emerged at the end of November 2021, the Omicron variant almost instantly caused borders to be closed and health restrictions put in place by governments.

In the following three weeks, passenger traffic at European airports fell by 20%. While a slight increase in bookings was felt for the last days of 2021, we are very far from the recovery hoped for for this crucial season for the sector. Nothing to do, in Europe, this year, we will remain at levels 60% lower than those before the pandemic. For key markets, starting with Asia, the recovery is a mirage. Traffic has not recovered at all to its pre-crisis level. This is all the less since in China, we apply the so-called “zero Covid” policy, the application of strict and immediate measures to reduce the flow of cases to nothing.

► Read also: Covid-19: the Omicron variant buries the hope of a return to normal air traffic

The International Association of Airlines (IATA) is also moved by the restrictive policies of governments.

Especially when urgent measures to contain the spread of cases are not targeted and not coordinated. This is in essence the position of IATA. Its director Willie Walsh also recalled recently that the World Health Organization itself does not advocate travel restrictions to limit the expansion of variants. The industry, after regaining hope this summer, preparing for a recovery, is now targeting next summer for a possible improvement. Given the extent of contamination by the Omicron variant, this climate will continue to prevail in 2022. What to see the future in gray for the industry. In total, according to the latest figures provided by IATA, losses in 2021 are expected to reach 190 billion dollars for the sector. Even the low-cost airlines that were presented as the potential winners of the crisis are forecasting greater annual losses, like Ryanair. The losses could be significantly less in 2022 but the traffic map remains red for the association of carriers.

While losses mount for airlines, there have also been no waves of bankruptcies this year

The carriers were able to count on the support of their respective States. Air-France-KLM, for example, has benefited from 4 billion euros in loans guaranteed by the French state that the company has started to reimburse. Lufthansa has already fully repaid the sum loaned to it by the German state. On the side of Italy, we have certainly buried this year Alitalia, after 74 years of activity, but to replace it by ITA with a state takeover.

And if the sector has fared overall, it is also because transport has not stopped despite travel restrictions. Freight, the transport of goods, has been the lifeline of the airline industry. Air freight revenue was $ 175 billion this year. And at a time when online shopping has become a fundamental trend, air freight has a bright future ahead. The cargo aircraft fleet is estimated to increase by 60% by 2039.

And to produce them, you need builders. In the fight between the two titans Boeing and Airbus, it is definitely the European giant that stands out.

The last round took place in mid-December. Airbus has delighted long-time Boeing customers: the Australian Qantas and Air France-KLM, who have jointly announced an order for 300 Airbus planes, single-aisle aircraft, a strategic market segment. Earlier, it was Singapore Airlines which announced that it wanted to replace its Boeings with Airbuses. The American manufacturer is still struggling to fully regain the confidence of its customers, especially those of the 737 family, affected in particular by security problems.


Free subscription

Sing up for the weekly email from Coinews that makes reading the news actually enjoyable. Join us for free

Latest stories

You might also like...