Monday, December 05, 2022

Despite a strong start to summer, Europe’s aviation industry is booming

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Air traffic is booming this summer, but will passenger demand hold up after the European holidays are over?

The question was the focus of the annual conference of the International Airport Council (ACI) Europe in Rome this week, held on the crest of the approaching high season.

The summer period has been by far the best since the onset of the coronavirus crisis that has hit the airline industry hard since 2020.

Some airlines, such as Ryanair, and countries, particularly Greece, have already recovered or even exceeded their 2019 daily flight numbers, according to Eurocontrol, a pan-European air traffic agency.

Across the continent, air traffic was at 86 percent from the same period in 2019 last week, Eurocontrol said, and is expected to reach up to 95 percent in August below its most optimistic estimate.

And companies are filling seats for the coming weeks despite the sharp rise in ticket prices, long queues at various airports from Frankfurt to Dublin to Amsterdam and strikes by air hostesses, pilots or air traffic controllers.

But after that?

“Visibility is low because there is a lot of uncertainty,” said Olivier Jankovec, Director-General of ACI Europe.

“We are now in a war economy in Europe, we have the prospect of a rather severe recession, we have inflation at record levels, so how is this all going to play out in consumer sentiment … the jury is still out.”

The Director-General for Transport and Mobility at the European Commission, Henrik Hololei, echoed this idea.

“We really need to tighten our seat belts, because there is going to be a lot of turbulence,” he told delegates.

“We are entering … a period of uncertainty that we have never experienced in the last decade. And that, of course, is the biggest enemy of the business,” he said.

Too many strangers

Hololei listed the war in Ukraine, high energy prices and shortages of energy, food and labor.

“We also have interest rates rising for the first time in a decade,” he said.

The price of jet fuel has doubled in recent years, with a shortage of refinery capacity exacerbating the explosion in crude oil prices.

Fuel accounts for about a quarter of the operating costs of airlines, which passed it on to consumers in ticket prices while trying to refill suitcases drained by the two-year health crisis.

Yet strong demand has returned, confirmed Eleni Kaloyirou, managing director of Hermes airports, which manages the airports of Larnaca and Paphos in Cyprus, where the high tourist season runs until November.

“People want to have their holidays,” she said, acknowledging “we are worried about next year.”

The general manager of Athens International Airport, Yiannis Paraschis, also expressed fears that “the increase in energy costs and inflation will consume a large part of European households’ disposable income.”

The head of Istanbul International Airport, Kadri Samsunlu, has expressed concern about the effect of inflation in Western Europe.

And if consumer confidence is damaged, “we do not know what will happen to demand,” he warned.

The latest unknown hanging over European air travel in the medium term is a possible new outbreak of coronavirus.

“COVID has not disappeared, nor is it a seasonal flu,” Hololei warned.

This article is republished from – Voa News – Read the – original article.

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