Routes
The cost of recovery
With ‘use it or lose it’ rules reimplemented across the world, it is budget airlines that are seizing the moment, cutting seat costs and opening new routes in order to encourage passenger uptake. Abi Millar speaks to George Ferguson, senior aerospace and airline analyst at Bloomberg Intelligence; Sophie Dekkers, chief commercial offi cer at easyJet; and Birgir Jónsson, CEO of PLAY, about why budget airlines are recovering faster than their competitors and what this means for the industry as a whole.
uring the darkest days of the pandemic, 2022 was spoken about in hopeful tones as the year the world just might get back to normal. For the travel sector generally, this was going to be the year that restrictions eased, tourism opened back up and airlines enjoyed the fruits of two years of pent-up demand. In reality, as we move through 2022, the industry is still grappling with considerable uncertainty. Quite aside from the ongoing BA.2 Omicron wave and the possibility of further Covid-19 variants to come, travel is being buffeted by soaring oil prices, a hike in the cost of living and the fallout from the Ukraine invasion. Speaking to AFP in April, Ryanair’s chief executive, Michael O’Leary, said the war alone had cost the carrier a million passengers over the course
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of February and March. That followed a December and January in which the Omicron variant “badly damaged” bookings and yields. This is not to say that airlines are putting their recovery plans on hold, but simply that capacity forecasting remains a more complex job than it was pre-pandemic. George Ferguson, senior aerospace and airline analyst at Bloomberg Intelligence, remarks that it is hard to make clear predictions at the moment. “If you think back to 2019, airline managers didn’t have to worry about a mutating virus, and you didn’t have this wildcard of Russian aggression in Ukraine,” he says. “I think airlines are very hopeful for a summer recovery. But they have to be very flexible and responsive, because if fuel prices stay high, they will have to reprice their tickets higher or cut capacity.”
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