European airports push back projections for full recovery to 2025 | Popgen Tech
Many airline executives have been adamant in recent months that the industry will continue to make significant progress in its post-Covid recovery. But continued economic turmoil — including a possible recession — means they need to pump the brakes to give time frames for a full recovery.
A full recovery in airline passenger volumes in Europe has been pushed back from 2024 to 2025, the body representing European airports said on Tuesday, revising the industry’s optimistic tone about its post-Covid recovery.
The announcement from ACI Europe signals a cautious outlook with “more negatives than positives” as Europe fears a looming recession and continues to grapple with double-digit inflation as well as the fallout from the war in Ukraine.
Eurozone inflation may have peaked but will decline so slowly that it could take years to return to the European Central Bank’s 2 percent target, reports indicated this month.
Analysts previously said they expected consumers to continue their vacation trips even as they grappled with higher living costs.
But ACI Europe and others say there were still uncertainties, including a slow recovery in business travel and further unexpected economic upheaval, which could affect the sector. For airports in particular, new government fees can be worrying.
“We now expect the recovery of passenger traffic to level off moving forward, with the timeline pushed to 2025 before Europe’s airports finally return to where they stood before Covid-19 hit,” said Olivier Jankovec, director- general of ACI Europe, said.
“We expect several airport markets – especially those that rely primarily on tourism – to exceed their pre-pandemic passenger volumes as soon as next year. But many others will not do so well and take much longer to recover.”
Many of Europe’s most popular airlines, such as Lufthansa, Ryanair and Wizz Air, said they see steady bookings and growth ahead.
Earlier this month, the International Air Transport Association (IATA) said it expected a net profit of $4.7 billion for the industry next year, with more than 4 billion passengers set to fly. It previously only said that profits in 2023 were “within range”.
But some airline chiefs warned in November of trouble in 2023. The chief executive of transatlantic-focused Virgin Atlantic said 2023 would be “difficult”, while Heathrow Airport’s boss said airlines were increasingly worried about the demand outlook.
UK Christmas flight bookings show demand is still lower than in 2019, with data from UK-based aviation data and analytics firm Cirium showing that “departures from UK airports this Christmas are still 14 per cent lower compared to the same period in 2019.”
This summer, airlines and airports saw an increase in passenger traffic after the shutdown caused by the pandemic, with many airlines reporting good summer earnings.
“We now expect the recovery of passenger traffic to level off moving forward … Next year we will still miss 220 million passengers, which means our volumes will only match 2017 levels,” Jankovec said.
(Reporting by Sudip Kar-Gupta and Joanna Plucinska; Editing by Jacqueline Wong and David Evans)
This article was written by Joanna Plucinska and Sudip Kar-Gupta of Reuters and is legally licensed by the Industry Dive Content Marketplace. Please direct all license questions [email protected].