Global airlines meeting this weekend in Istanbul are getting back to business before the COVID-19 pandemic, but they are facing rising costs, global geopolitical tension and the massive project of decarbonization in the face of the climate crisis.
About 300 airlines from all over the world were invited from Sunday to Tuesday to the banks of the Bosphorus to attend the annual general assembly of the International Air Transport Association (IATA), a sector that is today more optimistic after it has overcome the repercussions of Covid-19, which reduced the number of its customers by two-thirds in 2020.
The goal is to restore the 4.5 billion registered passengers in 2019. In terms of passenger-kilometer revenue, which is one of the benchmarks for the sector, airlines exceeded for the first time in April the levels they recorded four years ago on domestic routes. And if this includes international routes, the airlines will have recovered more than 90% of their pre-crisis recorded activity, as an average rate.
High ticket prices
These percentages were obtained despite the very high ticket prices: in France in April they rose by a third compared to the same month four years ago, according to the General Administration of Civil Aviation.
But that doesn’t stop companies from filling bookings for the crucial northern hemisphere summer tourist season, say industry analysts.
In mid-April, card sales in domestic markets were 20% higher than those recorded in the same period four years ago, according to IATA, which attributed this dynamic to the end of the “zero Covid” policy in China.
Some companies went bankrupt during the crisis, but others, with the support of the state and its restructuring, came out with greater profits. In Europe, most of the major transport companies returned to making profits in 2022, which allowed them to start reducing their debts or even considering mergers with weaker competitors.
But the reserve for air traffic growth is located in the east. Istanbul’s new giant airport opened before the crisis and is in competition on Asian routes with major European “hubs” such as London-Heathrow, Frankfurt and Paris-Charles de Gaulle, but also Gulf airports.
The carrier companies of these countries, which, unlike European capitals, did not sever their relations with Moscow after the Russian invasion of Ukraine in 2022, can still not only organize flights to and from Russia, but especially overflights to save time and money. It’s diversion to competition also created tensions for Franco-Chinese.
The air transport sector also has to face an existential climate crisis, especially since it currently contributes about 3% of global carbon dioxide emissions, a number that will rise if no step is taken.
Having pledged unanimously among countries to “zero emissions” by 2050 – a workshop worth about $ 1550 billion, according to IATA, the majority of carriers are betting on non-fossil fuels to achieve this.
Subsidiaries are gradually being created with the stimulus of the United States and Europe in the hope of reducing the high prices of these products.
And the high cost, in addition to fuel, is supported by the creeping shortage after the crisis, whether of pilots in the United States or of raw materials in the entire world.
Due to the difficulties faced by contractors, Airbus and Boeing are struggling to increase their production despite filling the order books until the end of the contract for certain models.
It is a challenge that could become more acute in the coming weeks because the Istanbul meeting will usher in a busy month for aviation in June ahead of the Bourges airshow. Analysts expect huge new orders there after Air India’s 470 aircraft in February and Ryanair’s 300 aircraft in early May.