Of Europe’s embattled airlines, it is the low-cost contingent that are emerging least scathed from the pandemic. While the likes of Air France, British Airways and Lufthansa have had to rely on the freight market to keep at least some of their long-haul jets in the air, the budget operators have been able to bring many of their grounded narrowbodies back into service as travel regulations have relaxed. The UK government’s decision this week to simplify its byzantine rules ahead of what should be a busy school half-term holiday week will give the sector a further boost.
As it did during the chaotic aftermath of the September 11 attacks 20 years ago, Ryanair is aiming to exploit its rivals’ troubles to boost its market share. It told shareholders this week that it is raising its estimates for the number of passengers it will carry by March 2026 by 25 million, to 225 million. The Irish airline believes that the delivery of 210 Boeing 737 Max 8 aircraft will help it launch profitable services into primary and secondary airports where legacy carriers have pulled out or reduced fleet sizes as a result of receiving state aid.
While both are likely to stay independent for now – after easyJet turned down a bid from Wizz this month – it will be intriguing to watch the strategies the sector’s other two big brands choose to take. Of the two, Wizz is the more bullish, keen to expand its sphere of influence from its central and eastern European heartland. However, EasyJet, which has raised the equivalent of $1.7 billion with a rights issue, may be considering using that to fund its own expansion – or as a hedge against what it may see as a period of continued uncertainty ahead, requiring further reserves of liquidity.
In another market clobbered by the pandemic and restrictions on movement earlier this year, things are also looking up. In August, Indian domestic traffic continued its upward climb, growing for the third month. A total of 6.7 million passengers flew within the country in August, 34% higher than the month before. India has long been seen as a sleeping giant when it comes to aviation – 6.7 million is a much smaller proportion of its population than would be flying in, for example, the USA or even China. The expansion of markets such as India in the next few years will be crucial to the industry’s recovery.
At the other corner of the Asia-Pacific region, the outlook is not so rosy. Plans for a so-called trans-Tasman bubble allowing quarantine-free flights between Australia and New Zealand were this week pushed back again, to at least November, on concerns about the spread of the Delta variant. The two countries’ pandemic response – all but closing their borders in a bid to achieve “zero Covid” – has been called into question, not least by an airline sector that has been feeling the pain for more than 18 months, but so far only Australia has given any indication of a possible change of tack.
Canberra has suggested that – with more Australians now being jabbed after a slow start – it might open travel with countries with high vaccination rates by the end of the year. This prompted Qantas to disclose that it hopes to resume international services around the same time. Routes such as Sydney-London, via Singapore, and Perth to London direct are among Qantas’s most popular and lucrative flights. Los Angeles, Vancouver, and Tokyo are other likely destinations, opening Australia not just to tourists and business travelers but hundreds of expats who have been stranded abroad.
One of the reasons Australia has been so cautious about reopening its borders has been its sluggish vaccine programme, which would leave its population vulnerable to Covid-19 cases being imported. This week Virgin Australia followed Qantas in issuing a vaccine mandate for all its frontline employees. It follows similar moves by a number of US airlines and – while controversial in some quarters – is seen as a way of restoring passenger confidence in aviation and convincing politicians that the sector is not a weak link when it comes to stopping the spread of the virus.
While Covid has dominated the aviation headlines for much of the past two years, the other theme that will rarely be off the agenda for the rest of the decade is sustainability. There is a near universal push by both governments and industry to reinvent commercial flying as a greener mode of travel, and this encompasses moves towards more widespread use of sustainable fuel and tentative steps towards designing electric- or hydrogen-powered platforms. Barely a week passes without news of a new trial that promises to push the technological boundaries. The latest is a move by Swedish regional airline Braathens to fly an ATR 72-600 aircraft with a 100% blend of sustainable fuel. While biofuels and other non-carbon-based fuels are increasingly available on the market, a combination of regulations and chemistry means that they must be mixed with conventional fuel. However, new chief executive Ulrika Matsgard says “the aviation sector needs a forerunner” and believes Braathens can be that pioneer. She believes using wholly-sustainable fuel in both engines of an ATR could reduce emissions by more than 80%.
welcome aboard the new airside
We took our community to the next level with an elevated look, innovative features, and new tools.