The summer has started well for the European aviation sector

2023-08-01 13:05:58

Full planes, generally fluid airports: despite increasing flight delays, the summer has started well for the European airline sector, which is, however, monitoring the effects of inflation on travel demand.

The financial balance sheets of airlines and airport companies bear witness to this, the consequences of the health crisis are disappearing.

Air France-KLM published a net profit of more than 600 million euros in the second quarter, almost as much as for all of 2022; from April to June, easyJet returned to the green; IAG (British Airways, Iberia, etc.) earned more than 900 million euros during the first six months of the year.

On the airport side, the Spanish manager Aena has earned over six months more than 600 million euros and its French competitor Groupe ADP, operator in particular of Paris-Charles-de-Gaulle (CDG), more than 200.

So many consequences of a vigorous resumption of flights which, according to the European air traffic monitoring body Eurocontrol, reached in mid-July 93% of aircraft movements for the same period of 2019, before the pandemic.

Between January and June, the airports of the old continent welcomed 92.3% of their travelers in the first half of 2019, according to the ACI Europe association, which federates 500 of these platforms.

However, this recovery is uneven. In the week of July 10, Greece, Turkey and Portugal evolved respectively to 112, 110 and 108% of their flights four years ago, according to Eurocontrol.

But Germany, the United Kingdom and France remained behind, a phenomenon attributed by ACI Europe to transfers to other modes of transport, including the train.

Friction in air traffic control

In airports, the situation this year seems more fluid than in 2022. It is “stabilizing” at Amsterdam-Schiphol, which had experienced scenes of chaos after badly anticipating the recovery, according to the general manager of Air France-KLM , Benjamin Smith.

At CDG, where thousands of pieces of luggage were lost a year ago, the summer season started without “major problems”, even if the situation remains “sensitive and fragile”, he said.

With the increase in traffic, the question of the saturation of the skies came back to the fore: in July, Eurocontrol noted a deterioration of 10 points in the punctuality of flights on departure and 9.4 points on arrival compared to 2019.

Half of the accumulated flight delays are due to problems of “capacity and personnel” available to guide the planes, according to Eurocontrol. A lack of resources recently described as “unacceptable” by the main world organization of airlines, Iata.

“The war in Ukraine has a big impact, it reduces the airspace” available in Europe, underlined the general manager of easyJet for France and the Netherlands, Bertrand Godinot.

French air traffic control, very disturbed in the spring by the strike against the pension reform, has not experienced any social movements since the beginning of the summer, unlike Ryanair in Belgium, easyJet in Portugal and ground staff in Italy.

Most European aviation players expect a return to the level of activity of 2019 next year.

Air France-KLM ensures that its reservations for the end of the year are slightly higher than those at the same date in 2022. For its part, easyJet will increase its capacity by up to 15% over the quarter including December, promises Mr. Godinot, welcoming “encouraging signs after sometimes complex winter seasons”.

It remains to be seen whether the trend will continue despite the deterioration in purchasing power: plane tickets are 33% more expensive than before the crisis, according to the French Directorate General of Civil Aviation (DGAC).

“So far, demand has withstood inflationary pressures and record year-to-date price increases extremely well,” said ACI Europe Managing Director Olivier Jankovec.

But he also warned of a “deterioration of macroeconomic fundamentals” and said he detected “first signs of a depletion of reserves set aside during the pandemic”.

Among these weak signals, according to a business leader in the sector speaking on condition of anonymity: several companies launched promotions in early July, which is unusual during peak periods.