Will consumer confidence and the desire to travel last beyond the good weather? At the start of the high season, the question stirred the annual congress of the European Airports Association (ACI Europe) in Rome this week. The summer period promises to be by far the best since the start of the health crisis which has seriously affected the air sector since 2020. Some companies such as Ryanair, and countries, in particular Greece, have already regained or even exceeded their number of daily flights in 2019, according to Eurocontrol.
Across the old continent, air traffic reached 86% of the level of the same period in 2019 at the end of June, said the pan-European monitoring body, which envisages up to 95% in August in its most optimistic scenario.
Despite the sharp rise in ticket prices and the malfunctions causing major delays at several airports (Amsterdam, Dublin, Frankfurt, etc.), strikes at certain carriers and air traffic controllers, companies are filling up with reservations for the next few weeks.
But once the umbrellas are folded up, what will happen? “The jury is still deliberating,” replies Olivier Jankovec, managing director of ACI Europe. “The visibility is low, because there are a lot of uncertainties.”
“Europe has entered a wartime economy, a fairly severe recession is looming, inflation is at record highs… How will all of this affect consumer confidence?” he.
Increase in the price of kerosene
Same intuition for Henrik Hololei, Director General “Transport and Mobility” at the European Commission. “Fasten your seatbelts, it’s going to shake,” he told the ACI Europe delegates. “We are going to enter in a few months in a period of uncertainty such as we have not known for a decade, and it is the worst enemy of economic activity”, he judged.
“Russian aggression in Ukraine will not go away”, but will “last for a very long time. Energy prices are very high, we risk labor shortages, energy shortages […] and even food in some parts of the world, plus interest rates are going up for the first time in a decade,” said Henrik Hololei.
Kerosene prices have doubled in one year, a shortage of refinery capacity aggravating the explosion in the price of crude oil. However, fuel represents around a quarter of the operating costs of airlines, which are forced to pass them on to ticket prices given their cash flow dried up by two years of health crisis.
However, “we see the return of a strong demand, people want to take their holidays” after the lifting of health restrictions, underlined Eleni Kaloyirou, general manager of Hermes Airports, manager of the airports of Larnaca and Paphos in Cyprus, where the high tourist season extends until November. But “we are worried about next year”.
Persistence of Covid-19
Same circumspection of the general manager of Athens airport, Yiannis Paraschis, beyond a summer that once again promises to be excellent for Greece. He feared to see “the increase in energy prices and inflation amputate a large part of the budgets of European households”.
“In my country, we know how to survive inflation, but you are just beginning to understand what inflation means,” said Istanbul International Airport boss Kadri Samsunlu, saying to himself. “very worried” about the emergence of this phenomenon in Western Europe. “It could affect consumer confidence, and once it’s gone, we don’t know what’s going to happen,” he warned.
Another dark cloud hovering over European air transport in the medium term: a possible epidemic recovery. “The Covid has not disappeared, and it is not a seasonal flu”, warned Henrik Hololei, noting a “rise in infections in Europe, due to the BA.4 and BA.5 subvariants” , even more contagious.