After two long years of the coronavirus pandemic, the airline and airport industry is slowly coming back to normalcy. As more and more countries are lifting pandemic restrictions, there is now increased traffic.
There is the resumption of normal overseas and domestic flights. The considerable drop in coronavirus cases has helped in the recovery of the industry. New normality has been possible due to the historic vaccination drive. Billions of doses were administered worldwide.
Many countries have implemented plans to return to normalcy like lifting many health measures, easing travel restrictions, and reopening borders. All these factors have contributed to growth in demand in the industry.
But there are still many financial woes. Many airline companies had to borrow huge sums of money, so this debt will lead to ticket price rise. There needs to have government interference to solve these woes.
There is a high demand to fly this summer, and it has boosted the profits of many companies like British Airways, Air France, and KLM. Airports are struggling to cope with these higher demands from passengers.
Airport Challenges Confront European Airlines As Demand Increases
Many European airlines have made higher profits from the increased demand. Air France and British Airways have surpassed earning expectations in this third quarter. This has proved to be a very strong quarter.
For Finland’s national airline Finnair it is the first positive quarter since the rise of the covid pandemic. Similar results are being made by many other European airlines. Customer demands are high, even if the economic situation remains grim.
Air France has recently cut its capacity forecast for the fourth quarter this year. So it will not be able to benefit from the recovery made from the pandemic. It reduced its forecast to 85% of pre-pandemic levels.
The previous target was 90%. But still, Air France has achieved quarterly revenue which can be compared to pre-pandemic times. Air France in a statement said that the demand is still higher as passengers are opting for premium economy seats. IAG Chief Executive Luis Gallego said that they are seeing strong bookings.
He added that leisure demand is particularly healthy, while business travel continues to recover steadily. This is a strong indication that the airline industry is slowly but steadily recovering.
Airlines from Europe are currently facing many challenges. They are finding it challenging to rebuild capacity since the rise of the pandemic. There are also restrictions on major Asian routes due to covid.
This is mainly pronounced in China. China is still struggling with covid related problems. Many of Chinese cities are under lockdown and all possible connection routes are blocked. Conflict in Ukraine has also disrupted major routes. The situation is uncertain as the conflict seems to continue without any respite.
There are many other issues faced by the airline industry. Staff shortages and labor disputes are being experienced in the industry.
This is faced as pilots and cabin crews are on strike demanding better working conditions and higher wages.
Russia Ukraine conflict has caused fuel prices to hike, which is resulting in higher operational costs for the airlines. This has been reflected in the price of tickets.
Due to the increase in traffic, many airports find it more difficult to cater to the demands. Many airlines had to cancel the flights as airports failed to handle the traffic. Schiphol and London’s Heathrow Airport faced such issues and lost several million in revenue.
Demand for transatlantic flights is very high, and it is contributing highly to the profit of the companies.
Higher ticket prices and the presence of more passengers in profitable sections of aircraft have contributed towards the profit.
There is strong demand from the USA. Closure of Russian airspace, higher fuel prices, and continuing covid restrictions are still a challenge, especially in the eastern routes to Asia.