Deep uncertainty for air transport sector, heavily hit by the coronavirus pandemic

We all know that the spread of the pandemic has damaged many sectors around the world and one of the heavily hit is the air transport sector. 

Eurostat estimated a 96% drop in passengers across Europe compared to 2019, 98% in Italy (-42.6 million): the highest decreases were reported in Milan Linate (-93%), Bergamo and Venice (both -90%), Milan Malpensa (-88%) and Bologna (-86%). 

The consequences of the economic crisis (greater availability of people’s capital means greater chances of flying and vice versa) and the fear of a possible infection on aircraft at full capacity (due to the close contact among strangers) have significantly reduced air travels and consequently the purchase of tickets.  

Paolo Simioni, CEO of ENAV (National Body for Flight Assistance), said that “the aviation sector is one of the most affected by the crisis triggered by the spread of Covid-19. It is not simple to predict today how the situation will evolve but I am certain that ENAV, in light of its institutional and strategic role, represents a key factor for a rapid recovery of air transport. As such, during this challenging period, we remain focused on the future of this sector, investing in safety and innovation to maintain our technological and operational leadership. In terms of financials, our Company has a solid capital structure and benefits from a regulatory system that mitigates the impact of traffic risk, even in light of the temporary derogation to the full application of the balance mechanism that the European Commission has proposed for 2020-21. Thanks to our cost-efficiency initiatives and the positive results from our non-regulated business, we managed to preserve our margins”. 

In Teruel, eastern Spain, there is the largest European aircraft storage and it is here that the airlines leave their aircraft they no longer need. Before the pandemic, in the depository there were 78 planes, in June there were 114 (the maximum limit is about 130 units). It is here that the first planes from AirFrance, Lufthansa, Etihad and BritishAirways arrived at the beginning of April.  
Patrick Lecer, CEO of Tarmac Aerosave (company that supervises the Spanish Teruel storage), commented saying that when the Coronavirus began to spread “we started making space in our sites, playing Tetris with the aircraft to free up two or three or four more spaces in each”. He concludes by adding “I’ve been in this business almost 40 years, and I’ve never seen anything like this. The mood is bad. It feels like a tragedy.” 

KLM airline has announced that will cut up to 5.000 jobs, British Airways 12.000, Ryanair 3.250 and American Airlines 40.000. 

IATA (International Air Transport Association), which brings together 290 airlines, has published its financial outlook for the air transport industry. The total loss will be 84.3 billion dollars and according to Alexandre de Juniac, general manager and CEO, 2020 will be the worst year in the history of aviation. 

The future of air transport, especially now that the virus is spreading again across the continent, is unfortunately still very uncertain. 

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