Summer’s gone; Now airlines must hunker down for a chilly winter

In the northern hemisphere, the evenings are drawing in, and, for Europe’s airlines a summer of promise is turning into worry about surviving a long winter. July and August saw many carriers, including Ryanair and Wizz, enjoy their best period since the crisis as rules relaxed and sun-starved, lockdown-weary families headed for the beaches or to visit family and friends. This week, Eurocontrol reported that the number of flights in European airspace in August had exceeded its best-case forecast for the second month in a row. However, an autumnal chill is in the air.

The bookings surge provided welcome revenue for carriers who have been running on fumes for the past 18 months. But several fret that a tail-off in ticket sales and ongoing long-haul travel constraints will leave many struggling for cash again. The UK in particular – where the government frequently changes its lists of destinations cleared for quarantine-free travel – has seen consumers leaving it late to book flights. Leisure carrier Jet2 this week reported a reluctance of people to commit to winter holidays. Meanwhile, Icelandair reined-back its capacity forecast to two-thirds of 2019 levels.

The recovery is certainly patchy – although there is a clear link between traffic and governments’ desire to damp down international travel. Markets where there are extensive domestic networks, unfettered by cross-border restrictions, such as China, India, Russia and the USA, have also remained strong or rebounded rapidly. This suggests Covid restrictions are the main brake on things getting back to normal, rather than any structural market malaise – although a key indicator will be how strongly business travel returns in the next nine months or so.

The Airline Business Index tracks 13 of the leading airline groups quarter-by-quarter on metrics including number of employees, size of active fleet, and revenue and passenger numbers. The latest survey shows that, at the end of the second quarter, the global industry was 66% of its pre-crisis size. Given where we were in the rabbit-in-headlights confusion of the first months of the pandemic a year ago, that probably represents a reasonable state of affairs. Looked at another way, however, this is a sector that has shrunk by a third.

While the misery of career-threatening lay-offs, furloughs, and pay cuts may be far from over for many pilots, recent months have seen the return of a phenomenon many thought extinct – the job advertisement. UK regional carrier Flybe went bust in March 2020 at the very start of the pandemic. However, against the odds, the De Havilland Canada Dash 8-400 operator is poised for relaunch under a new majority shareholder, and has begun a recruitment drive for type-rating instructors, line training captains and cabin crew managers.

Despite holding onto most of its pilots by cutting pay while agreeing to keep them current, low-cost carrier Ryanair too is looking for staff as it adds Boeing 737 Max 8 aircraft to its fleet. However, this week chief executive Michael O’Leary highlighted the problem of UK-licensed crew being unable to fly European Union registered aircraft since the country’s withdrawal from the EU. This, he says, is making it harder to recruit for specific bases, although he does not rule out giving jobs to those with UK licences, despite saying the qualification is “not that valuable”.

In other news this week, the Max continues to make its comeback throughout the world, after its two-year grounding. Malaysia has become the latest country to lift its ban on the narrowbody, and the first in Southeast Asia. However, several nations in the broader Asia-Pacific have reinstated the jet, including Australia, Fiji, India, and New Zealand. Indonesia, where in 2018 a 737 Max 8 operated by national airline Lion Air crashed shortly after departure from Jakarta, killing all 189 passengers and crew, has yet to clear the type to return to service.

Finally, will Kabul airport reopen after the departure of the Americans? It may depend on the willingness of air traffic controllers and other professionals who remain in the country to work under the Taliban, and the willingness of the armed militants to accept the oversight of international aviation bodies such as ICAO. There had been talk of Turkey taking over its operation on a temporary basis, but prospects of that were probably not helped by a Taliban spokesman who warned that any overseas forces remaining in the country for “airport security” would be regarded as “invaders”.