Airlines are looking for ways to move in the face of “post-Covid” challenges

2023-06-02 19:54:15

Global airlines meeting this weekend in Istanbul are getting back to business before the COVID-19 pandemic but facing rising costs, global geopolitical tension and the massive project of decarbonization in the face of the climate crisis.

About 300 airlines from all over the world were invited from Sunday to Tuesday to the banks of the Bosphorus to attend the annual general assembly of the International Air Transport Association (IATA), a sector that is today more optimistic following it has overcome the repercussions of Covid-19, which reduced the number of its customers by two-thirds in 2020.

The goal is to restore the 4.5 billion registered passengers in 2019. In terms of passenger-kilometre revenue, which is one of the benchmarks for the sector, airlines exceeded for the first time in April the levels they recorded four years ago on domestic routes. If this includes international routes, airlines will have recovered more than 90% of their pre-crisis recorded activity, as an average rate.

These percentages were obtained despite the very high ticket prices: in France in April they rose by a third compared to the same month four years ago, according to the General Administration of Civil Aviation.

But that doesn’t stop companies from filling bookings for the crucial northern hemisphere summer tourist season, say industry analysts.

In mid-April, card sales in domestic markets were 20% higher than those recorded in the same period four years ago, according to IATA, which attributed this dynamic to ending the “zero Covid” policy in China.

Some companies went bankrupt during the crisis, but others, with the support of the state and its restructuring, came out with greater profits. In Europe, most of the major transport companies returned to making profits in 2022, which allowed them to start reducing their debts or even considering mergers with weaker competitors.

Competition shift

But the reserve for air traffic growth is located in the east. Istanbul’s new giant airport was opened before the crisis and is in competition on Asian routes with major European “hubs” such as London-Heathrow, Frankfurt and Paris-Charles de Gaulle, but also Gulf airports.

The carrier companies of these countries, which, unlike European capitals, did not cut off their relations with Moscow following the Ukraine war in 2022, can still not only organize flights to and from Russia, but especially overflights to save time and money. It is a shift in competition that has also created tensions for Franco-Chinese.

The air transport sector also has to face an existential climate crisis, especially as it currently contributes regarding 3% of global carbon dioxide emissions, a number that will rise if no step is taken.

After pledging unanimously among countries to achieve “zero emissions” by 2050 – a workshop worth regarding $ 1,550 billion, according to IATA, the majority of carrier companies are betting on non-fossil fuels to achieve this.

Branches are gradually being established with the stimulation of the United States and Europe in the hope of reducing the high prices of these products.

And the high cost, in addition to fuel, is supported by the creeping shortage following the crisis, whether of pilots in the United States or of raw materials in the entire world.

Due to the difficulties faced by contractors, Airbus and Boeing are struggling to increase their production despite filling the order books until the end of the contract for certain models.

It is a challenge that might become more acute in the coming weeks because the Istanbul meeting will kick off a busy month for air travel in June ahead of the Bourget Airshow. Analysts expect huge new orders there following Air India’s 470 aircraft in February and Ryanair’s 300 aircraft in early May.

(AFP)

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