The last eighteen months have been brutal for the aviation industry. Fortunately, there are improvements and signs of recovery throughout the entire industry. But it is still going to be a turbulent ride before aviation is back on track, if parts of the industry will get back at the same level as before the pandemic at all.
If you look at the different segments within the industry, you will see big differences. Take a look at the US, for instance. Intercontinental flights are still at a low level, due to travel restrictions posted by both the US-government as well as other countries. Domestic passenger flights however, are up and almost at pre-pandemic levels, with TSA reporting that they are screening over two million travellers a day. Southwest Airlines, one of the largest low-budget airlines, reported a 348 million dollar profit in Q2 of 2021.
The reboot of domestic aviation is not coming easy. The US Senate approved a 54 billion dollar rescue package for airlines last year, to prevent personnel being furloughed. Though, thousands of employees were still fired. The effects of that today are that there is a massive shortage on pilots and cabin personnel, resulting in lots of cancelations (Southwest’s on-time performance in June was just 62.4%). This has led the US Senate to asking questions about the shortage of personnel.
Europe is still catching up
Meanwhile in Europe, we see air travel continuing to grow. ACI Europe reported recently that passenger traffic is improving but at -53% of pre-pandemic levels, it is still a long way to go. Since the beginning of the year, Europe’s airports have already lost 969 million passengers (-75% vs. 2019). In the Netherlands flights are on the up. Eindhoven Airport expects to handle 3.000 flights in August, up from 2.700 flights in July and just 1.350 in June. Schiphol Airport is seeing its passenger numbers rise as well, with 1.7 million passengers passing through in June. It is still half of the numbers we saw in 2019.
Cargo and manufactures are pulling the fleet
One market that is doing extremely well, is (intercontinental) cargo aviation. According to IATA, in June 2021 cargo flights grew with 9,9%, in comparison to June 2019. Many airlines lean on this growth, to compensate for the losses in passenger flights. At the same time, aircraft manufacturers are posting better outlooks as well. Both Boeing and Airbus report quarterly profits that are better than anticipated and Airbus is saying it will deliver more airplanes this year the predicted. Airlines are looking to invest in new airplanes. Southwest airlines ordered 100 new Boeing Max aircrafts with an option for 155 more. Air France / KLM is acquiring 170 new planes, where it seems Airbus is the preferred manufacturer.
Airports last in line
With the recovery still on a rocky road, airports are last in line to see themselves return to pre-pandemic levels of passengers and revenues. For a lot of them, it is not just passengers that generates revenue: they also rely on other economic activities, such as commercial activities or transportation. When they will be back on pre-pandemic levels, is hard to say. That depends on local economic growth. If the airports can find a way to stimulate these other activities, it can benefit them. Maybe airports that rely solely on aviation, might need to think about creating new types of business at the airport.
Anyhow, for airports it will also take some years to reach pre-pandemic levels.
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