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The health crisis linked to the Covid-19 pandemic has not spared any sector economically. The halt in tourism, accompanied by the closure of borders in order to contain the epidemic, has had a heavy impact on the airline sector.
Having suffered a complete shutdown in France in March 2020, airlines have since experienced a rather uneven recovery. Eurocontrol, the European organisation for the safety of air navigation, has just revealed the figures for the crisis between March 2020 and the first quarter of 2021.
After a strict lockdown from March to May 2020, and two more flexible ones at the end of 2020 and beginning of 2021, airlines have suffered greatly from the crisis and have only been able to operate a limited number of flights. In all, since March 2020, the French sky have seen a loss of more than 1.2 million flights.
Eurocontrol therefore compared the data for the year 2020-2021 with those for 2019, noting the heavy losses due to the health crisis.
What kind of recovery for air travel in France?
As a first example, in the last week of May, 2,059 daily flights were recorded in France, a 56% drop compared to 2019 (average over 7 days). Over the same period, domestic routes limited the damage with a drop of only 23%, while international routes struggled to recover (-67%).
Despite increasing national vaccination campaigns and reduced sanitary restrictions, the organisation estimates that activity in 2021 will only be 45% of that in 2019.
France’s busiest airport, Paris Charles de Gaulle, is underperforming. With an average of 514 flights per day in its 2020-2021 financial year, it has recorded a 64% drop compared to 2019.
Low-cost airlines: most affected by the crisis
To everyone’s surprise, it is the low-cost airlines that have had the most difficulty in recovering from the health crisis. They have notably posted a drastic reduction in their traffic, up to 80%, in the last week of May 2021. EasyJet is also following the same trend, with the number of weekly flights falling by 84%.
Over the same period, scheduled routes are also in great difficulty (-65%), while business aviation is superforming (-16%), as are charters (-20%).
However, as a whole, air traffic should reach 71% of its activity in 2022 compared to 2019, if the health situation continues to improve. However, it is only in 2025 that air traffic is expected to return to normal. If vaccination reaches a high threshold, leading to herd immunity, in 2024, French air traffic could then reach 95% of the traffic recorded in 2019.
Case by case : The situation for Air France KLM?
According to a report released on Thursday, June 3rd, the Franco-Dutch group suffered a loss of €1.5 billion in the first quarter of 2021. This resulted in a 57% drop in turnover compared to the first quarter of 2020, with a 73.4% fall in passenger numbers. However, the group was recapitalised last May with the help of the French state, which doubled its stake from 14.3% to 28.6%.
“We cannot say that the epidemic situation at this stage, at least at the international level, has really improved, even if we are seeing the first figures here and there which show that the vaccination campaigns are beginning to produce their effects” , said Frédéric Gagey, the firm’s financial director.
The group, which deployed 48% of its capacity in the first quarter of 2021, plans to increase it slightly in the second quarter, to 50%.
For the third quarter of 2021, “the group expects to have between 55% and 65% of available seat kilometres compared to 2019” , Air France-KLM said in a statement. Even if in many countries the vaccination campaigns are accelerating, Frédéric Gagey stressed that the group “is not yet in a situation where everyone travels freely, it will obviously take many more months before we reach a situation that could be compared to that of 2019” .
Similar situation for Boeing
For the second aviation giant, it is the same case that it faces. Having achieved a turnover of 15.2 billion dollars in the first quarter of 2021, it still suffered a loss of $561 million, compared to the same period a year earlier. Note that these figures are minimal when compared to the March to December 2020 period. Last year, Boeing posted an abysmal loss of $11.9 billion and saw its revenue plummet by 24% to $58.2 billion.
“While the global pandemic continues to challenge the overall market environment, we see 2021 as a key inflection point for our business as vaccine delivery accelerates and we work together in government and industry to help drive a robust recovery” , commented Boeing CEO, Dave Calhoun.
For the moment, Boeing has not communicated any figures for the year 2021.
Competition between Boeing and Airbus
However, Boeing has an additional challenge to face. The giant Airbus, with a turnover of €49.9 billion compared to €70.4 billion in 2019 (-29%) remains Boeing’s main competitor. Boeing’s share of the single-aisle airliner market has fallen from around 50% ten years ago to around 35% this year, after the long layover of the 737 MAX, according to Agency Partners among others. The coming year then involves high stakes for the Boeing firm. To counter Airbus’ single-aisle A321neo, Boeing plans to bring to market by 2029 a new 5,000-mile single-aisle jet with about 10% more fuel consumption.
“I’m confident that over a longer period of time we’ll get back to where we need to be and I’m confident in the product line” , Calhoun said in April.
Teal Group analyst Richard Aboulafia also confirmed the strength of the decision, saying that “there is no better way to repair their image than to invest in the future now, plain and simple” .
Read also > RÉMY COINTREAU, THE REALREAL AND PVH EXCEED EXPECTATIONS FOR THE FIRST QUARTER
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The health crisis linked to the Covid-19 pandemic has not spared any sector economically. The halt in tourism, accompanied by the closure of borders in order to contain the epidemic, has had a heavy impact on the airline sector.
Having suffered a complete shutdown in France in March 2020, airlines have since experienced a rather uneven recovery. Eurocontrol, the European organisation for the safety of air navigation, has just revealed the figures for the crisis between March 2020 and the first quarter of 2021.
After a strict lockdown from March to May 2020, and two more flexible ones at the end of 2020 and beginning of 2021, airlines have suffered greatly from the crisis and have only been able to operate a limited number of flights. In all, since March 2020, the French sky have seen a loss of more than 1.2 million flights.
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The health crisis linked to the Covid-19 pandemic has not spared any sector economically. The halt in tourism, accompanied by the closure of borders in order to contain the epidemic, has had a heavy impact on the airline sector.
Having suffered a complete shutdown in France in March 2020, airlines have since experienced a rather uneven recovery. Eurocontrol, the European organisation for the safety of air navigation, has just revealed the figures for the crisis between March 2020 and the first quarter of 2021.
After a strict lockdown from March to May 2020, and two more flexible ones at the end of 2020 and beginning of 2021, airlines have suffered greatly from the crisis and have only been able to operate a limited number of flights. In all, since March 2020, the French sky have seen a loss of more than 1.2 million flights.
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