When the Covid crisis recedes and passengers return to the skies the environment will almost certainly take its place as the biggest preoccupation for airlines. Throughout the 2020s, expect a series of initiatives – from governments, international bodies, and industry – to reduce the sector’s carbon footprint, whether through new propulsion technologies, such as batteries and hydrogen, or sustainable fuel.
But some want more, believing that technology alone is not the answer. Like the activists who spray-painted an Air France Boeing 777 parked at Charles de Gaulle airport this week to protest France’s air transport policies, they want the public to be deterred from flying, through punitive taxes or subsidies for so-called greener modes of transport such as rail. That sort of sentiment is also behind the “flight shaming” movement which began to gain momentum, particularly in Europe, in 2019.
While the industry cannot afford to ignore such opinion, remember that anti-aviation extremists are not the majority. Balanced against those views are the huge benefits airlines bring to humankind, from enabling global trade to bringing families together, and allowing us to broaden our horizons through travel. However, the industry does have to play its part in slowing climate change, and technology will be a massive contributor. This decade could witness remarkable advances.
Here in 2021, Covid-19 continues to dominate the news, with more airlines this week reporting results that reveal the impact of the pandemic on their finances during the past year. Brazil’s Azul has fared better than many, posting a profit in its fourth quarter – albeit more than a third down on the same period in 2019 – and predicting a stronger-than-industry-average recovery, focused on its domestic network and cargo operations.
Not so Etihad. Even before the crisis, the Abu Dhabi airline faced questions about its strategy. Competing with Emirates – its Dubai hub just 90 minutes’ drive away – the airline, formed in 2003, made an operating loss of $800 million in 2019 and was already restructuring. With no domestic network, Etihad depends on long-haul operations that have been especially affected by national travel restrictions and border closures. Its operating loss more than doubled to $1.7 billion in 2020.
Business aviation has been less impacted than the airlines by the crisis, with high-net-worth travelers continuing to move about the globe, and some even swapping first-class airline tickets for the more Covid-secure environment of the private jet cabin. But this has not necessarily fed through to aircraft orders, with Dassault Aviation this week reporting that it had taken just 15 Falcon orders last year, down from 40 in 2019. Seven of those 15 were government military commitments.
The French manufacturer – which also makes the Rafale fighter – hopes the arrival of its latest model, the 6X, which is close to its first test flight, and the launch of a “Future Falcon”, possibly to compete with the longest-range, large cabin jets from Bombardier and Gulfstream, will help it reverse its fortunes. With just three aircraft makers in this lucrative sector of the market, a post-Covid rebound in the world economy should boost the appeal of its luxury “time-machines”.
One of these three, however, faces an arguably even tougher ride to recovery. Canada’s Bombardier has been forced to shed most of its assets in the past few years as it struggles with debts incurred by its bid to take on Airbus and Boeing with the CSeries. Now a dedicated business jet manufacturer, new chief executive Eric Martel said this week that its future depended on robust demand for its high-end Global and Challenger jets, and strong returns from its aftermarket activities.
An era of aviation that many thought had gone for good with the last flight of Concorde in 2003 may be on its way back. Developers have been working on supersonic jet concepts for around 15 years, but finally these projects have begun to gain serious traction. On Wednesday, Warren Buffett’s NetJets, the world’s biggest private aviation firm, announced it was taking purchase rights for 20 Aerion AS2s, becoming the first named potential customer for the faster-than-sound type.
A day later, American Express’s innovation-finance arm became the latest investor to put money behind Boom Supersonic, the company developing the 80-seat Overture supersonic airliner it intends to have in passenger service by the end of the decade. Both Japan Airlines and Virgin Group have placed “pre-orders” for 20 and 10 examples, respectively, indicating that, alongside the drive towards greener aviation this decade, there remains a need for speed.
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