Transatlantic flights, travel to Europe will increase after Covid despite war in Ukraine
As if the airline industry needed another hurdle to overcome after two of its worst years ever, carriers are now wondering what will happen to travel in Europe given the war in Ukraine. .
The CEO of Airbus, based in Toulouse, France, believes an expected increase in travel this summer is still likely.
“I don’t think it has an impact on European domestic markets,” Guillaume Faury told CNBC while visiting New York for meetings late last week. Faury admits travel to Eastern Europe near Ukraine could be under pressure, but overall he is optimistic that air travel will increase in the coming months.
“I would tend to say yes, it is very likely that the majority of global travel will recover as we expect by the end of the pandemic.”
Faury’s optimism is matched by nearly every airline CEO who has pointed to 2022 as a big year to rebuild travel lost during the pandemic.
At one point, transatlantic flights were down more than 75%. At the start of this year, it had improved but was still down 36%, according to Jefferies.
In a research note outlining the risk of a drop in transatlantic travel due to Russia’s invasion of Ukraine, analyst Sheila Kahyaoglu wrote: “The vast majority of European air traffic is led by Western Europe , which is expected to remain relatively unchanged unless Russia leads a new offensive against NATO. territory.”
For Airbus, as well as its competitor Boeing, Russia’s attack on Ukraine raises the question of the impact the sanctions could have on their plans to ramp up aircraft production this year.
So far, the sanctions have not targeted Russia’s ability to export aluminum, steel or titanium, which are crucial for aircraft production.
In addition, Faury asserts that Airbus is little exposed to the pressure of the supply chain which could develop in Eastern Europe. “Security of supply is guaranteed regardless of a supply that could be challenged from Russia,” he said.
Securing the supply chain will be key for Airbus as it ramps up production this year in Europe and the United States thanks to strong demand for the A320 and A220, both built at the company’s plant. in Mobile, Alabama.
Faury expects production rates for both aircraft to increase by at least 20% per year over the next three years. “There aren’t many parts of the aviation ecosystem that are growing at 20% per year,” Faury said. “That’s what we have in Alabama.”
In the longer term, Airbus is investing heavily to develop hydrogen-powered aircraft that would have significantly reduced emissions.
Last week, it announced its intention to work with CFM International, the joint venture owned by GE and Safran, on hydrogen planes. “We believe we can put the first hydrogen into service by 2035,” Faury said.