Julia Buckley, CNN • Updated 30th December 2020
(CNN) — It was a fitting place for an industry in need of a miracle.
In October, Air Belgium moved two planes to Lourdes, the Catholic sanctuary in France, to park up for the winter.
The planes — both Airbus A340-300s, of which the airline only has four in total — have been parked at Tarbes-Lourdes-Pyrenees airport for long-term storage.
A spokesperson for Air Belgium blamed the “reduced demand and current operational restrictions due to Covid-19” and said the aircraft had been parked temporarily “to defer maintenance.”
The airline is one of many struggling in the pandemic. Aviation has been particularly hard hit by Covid-19, with legal restrictions on travel joined by an unwillingness to fly by members of the public.
Looking at the profit-and-loss reports for the third quarter of the year, the extent to which airlines have been crippled becomes clear. North American passenger jet arrivals dropped by 48% year-on-year, according to December figures released by aviation analytics company Cirium, while Latin America was barely better, at 46% down. Europe numbers, meanwhile, have been devastated — over 70% down, year on year. Even in Asia Pacific — which has controlled the pandemic better than other regions — arrivals are still over 30% lower now than they were this time last year.
Back at the end of October, figures were even more grim — international flights were down 75% year-on-year, according to Cirium (though domestic flights were better, down 36% globally). As the second wave of the pandemic has spread across the globe, airlines have taken drastic action to cut costs — from downsizing aircraft to retiring entire fleets and cutting routes.
Air Belgium’s hail Mary at Lourdes isn’t the only action the airline has taken. In the same month, it also paused the launch of a new route to Mauritius, and delayed the start of seasonal flights to Guadeloupe and Martinique.
It’s just one of countless European airlines struggling in the pandemic. Air Baltic has flown this winter with planes only a third full. And figures from Europe’s biggest airline conglomerate, IAG — which owns British Airways, Iberia, Aer Lingus and Vueling — shows that it was flying half-full planes over the peak summer period of July to September, despite having reduced capacity to just 21.4%. With just 10% of the normal demand, BA lost £13 million ($17 million) per day.
As a result, with revenue 83% down, the group slashed its winter schedule to just 30% of last year’s capacity.
EasyJet, too, announced its first loss in 25 years in October, and cut flights to 20% capacity for the rest of 2020.
Even behemoth Singapore Airlines is suffering. Not only has it cut 4,300 jobs, but in September the airline admitted that it “expects to operate under 50% of [pre-Covid] capacity at the end of the financial year.”
While American Airlines predicted this fall that its end-of-year capacity will be down 50% overall, with long-haul international capacity at just 25% of what it was last year.
IATA, the International Air Transport Association, has predicted that for 2021, European airlines will see an average load factor of 65%. It doesn’t sound so bad, considering — until you take into account that airlines need to run on average at 70% to break even.
Those predictions, of course, were all made before the new variant of Covid-19 was discovered in the UK, leading to destinations around the globe closing their borders to aircraft coming from the UK. Even the US — currently the global center of the pandemic — introduced a Christmas Eve rule that all passengers coming from the UK from now on must present a negative test before boarding.
Christmas was well and truly canceled for the aviation industry.
So what can we expect in the near future?
Flights to wherever is open
For the next few months, airlines are network-planning to “just fly to wherever they can”, says Graham Dunn, executive editor of FlightGlobal.
But for traditional and low-cost carriers, that means different things, he says, with traditional airlines concentrating on their big routes from hub airports, while low-cost airlines will be opening up the map wherever it’s allowed.
“It’s been interesting to see that when [budget] carriers have brought traffic back, they’ve tried to bring back more network than frequency, and kept the routes going where they could”, he says.
“So I think you’ll still see that point-to-point traffic continuing on low-cost carriers”.
Conversely, he thinks traditional airlines will get more hub-based for now, with companies ditching regional routes as they try to make the money spinners productive.
“I think those secondary international routes, especially on long haul, won’t be coming back [in the short to medium term]. You’re much more likely to fly London Heathrow to New York JFK than Gatwick to a secondary US airport”, he says.
And instead of sitting pretty on a Dreamliner or an A380, expect to be on a smaller plane, in order for the airline to break even.
“In the short term, it’ll be slightly smaller aircraft, slightly less frequency and traditional major hubs, rather than point to point,” says Dunn.
Carbon footprints up in the air
Could those smaller aircraft spell good news for the planet?
There’s one major positive that we’ve been able to take from the pandemic: the break that we’ve given the environment with our reduced flying patterns.
With the climate crisis spiraling out of control, the dip in aviation has given the planet a break for the past nine months.
And you’d think that the retirement of widebody planes and increased use of smaller aircraft for longer flights, plus routes being cut to hub airports, rather than having feeder flights from regional airports, would mean that those who are flying at the moment are at least flying greener.
But don’t get too smug — that’s not necessarily the case, says Ascanio Vitale, an engineer and environmentalist. His website, Flyzen, aims to be a more accurate kind of carbon calculator, taking more factors into account than most current software.
“You’d hope that we’d be flying greener at the moment, but it can be counter-intuitive,” he says.
“It’s not just what plane is being used, or the route, it depends on the traffic.
“The first thing you have to do [to reduce carbon footprints] is increase the load factor.”
That means that if a smaller plane is being used to fly a long haul route at the moment, “for sure that’s more efficient,” he says.
But whether that actually cuts the passengers’ carbon footprint depends how full those planes are.
If they’ve been filled to the gills, then indeed, it’s more efficient overall. If, though, they’re still half empty, the passengers’ carbon footprint goes up — and will be higher than what it might have been a year ago, in a bigger, older — but, crucially, fuller — plane.
“It’s not about efficiency, it’s about impact,” he says. “If there are half the amount of flights there were this time last year, but there’s a 70% drop in passengers, the impact of these passengers is more.
“And if the airline switches to a plane with fewer seats to fill them more easily, even if it’s full, it’ll end up less efficient [than a full, larger plane].”
“We’re polluting less at the moment overall, because the number of flights is reduced, and fewer people are traveling. But the single traveler is polluting more than before.”
The good and bad news on fares
Thinking about returning to the skies in 2021? You might assume that the lack of demand will mean lower fares, with airlines slashing prices to encourage passengers back on board.
And if you want to splash out for your first post-pandemic trip and book a better-distanced seat in business class, you’d assume the decline in business travelers, and the swift, successful adoption of video conferencing, would see business class fares dive, too.
The bad news? According to travel booking app, Hopper, that’s not the case. Business class fares in the United States are, on average, pricing 70% higher than 2020 fares for March 2021 departures. Economy fares are up 18% year on year for the same period.
The good? That may not stay the same.
There’s been a “precipitous drop” in business class demand, says a Hopper spokesperson, with bookings down 20% this fall. That has translated into lower fares, too.
So for now, the airlines have raised their 2021 prices to make up for the lack of demand. But if demand stays low, expect them to fall. Your spring bargain may yet not be a pipe dream.
Graham Dunn thinks that we can expect to see better pricing in the near future on the big routes, since traditional carriers will be fighting for passengers on their normal moneymakers. And if you look a little further into the future, he thinks the bargains will be back across the board.
“You’ll have airports looking for traffic, so they might be trying to make attractive offers to get airlines back in,” he says, adding that if countries’ vaccination programs are making progress by the summer, we’ll start seeing more point to point flights, rather than routing via hubs.
The past year has been devastating for the aviation industry, with airline closures left, right and center.
But that doesn’t necessarily means reduced competition long term. In fact, it might be that the pandemic helps launch new airlines.
Airlines planning to launch in 2021 include Flyr, in Norway, and Pacifika Air, in New Zealand. LIFT just launched in South Africa, and there are so many putative airlines in the works in Iceland that artist Oddur Eysteinn Friðriksson launched a fake brand, Mom Air, to make a point about their nebulous plans.
But despite how desperate the industry looks now, Graham Dunn thinks that new airlines may well emerge post-pandemic. After all, he says, this summer’s rise in European travel when restrictions were eased shows that the passengers are there — “you see the demand when routes come back.”
And, he says, the budget airlines’ point to point flying created entirely new markets, purely by offering lower fares. Never thought of going to Bratislava before? Have Ryanair dangle a $10 ticket in front of you, and you’re on your way to the airport.
So if airports feeling the pinch start making it cheap for airlines to fly there, he says, it’s perfectly possible we’ll see those new airlines. What’s more, with the airline failures of this year, and, potentially, more to come before the end of the pandemic, there will be plenty of spare aircraft hanging around — and qualified crew to work on them. For those with the funds and the chutzpah to launch an airline, it could be a very good time to do so.
That won’t be immediate — Dunn’s betting on summer 2022. But he says that “there will be aircraft available, and financing, and [remaining] airlines will be retrenching their networks — and what tends to happen is that a new player comes in and seizes the opportunity”. Although fares won’t be lower in the short term, he says, he thinks they will dip within a year.
Ascanio Vitale agrees, reluctantly — but he urges us all to think more carefully about our flying habits once we take to the skies again.
“We’ve been polluting less this year because fewer people have been traveling and the airlines are getting rid of their old planes, but that isn’t enough”, he says.
“Aviation has a huge carbon footprint, and the trend to cap emissions is so slow, bland and unambitious that it won’t make the industry sustainable.
“The pandemic has taught us that we should consume less — but I don’t think people understood, because they’re just waiting to go back to normal.”
Story and photo credit: https://www.cnn.com/travel/article/winter-aviation-covid-airlines/index.html