May 16, 2022

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Economic recovery for US aviation

Economic recovery for US aviation

U.S. airlines expected a “catastrophic disruption” to air traffic on Wednesday. A day later, only a few flights were temporarily canceled, and some flights were delayed.

The launch of Mobile Broadband Internet (5G) in the United States this week will cause major problems for aviation. Major US airlines warned. Radio signals from the new 5G towers that AT&T and Verizon want to turn on will disrupt the radio traffic on board. More precisely, the altimeters on planes running via radio waves will be greatly affected by the 5G internet, which is set to launch in the US this week. Those measurements are important when landing and departing in bad weather.

Telecommunications officials in the United States have not seen any objection, but the aviation regulator said it could not rule out 5G. After political pressure, telecom companies did not operate the refurbished transmission towers near major airports on Wednesday.

For example, the 5G problem is currently over with Sicily. But it is not clear how much trouble air traffic will face once all the transmitters are operational. An important question: Have US officials chosen a radio spectrum that is closest to the frequencies used by aircraft? In Europe, the European regulator EASA said on Wednesday that the problem was not an issue. There will be more gap between the frequencies for 5G and air traffic.

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However, as a precaution – the fact that canceled and delayed flights are another setback for air traffic in the United States.

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Smooth recovery

The financial results of three of the four major airlines this week show a cautious recovery in 2021. But the first quarter of 2022 was again disappointing. This is mainly due to the rapid spread of the Omigron variant. United Airlines announced last week that 3,000 employees (2.4 percent of employees) could not work because they were infected with the corona virus. Another setback was the winter weather, which led to disruptions.

American Airlines and United Airlines on Thursday announced higher turnover and lower losses in 2021 than in the catastrophic year 2020. American Airlines had a negative result of $ 2 billion in revenue of USD 29.9 billion (two-thirds of 2019 revenue). United lost $ 2 billion to $ 24.6 billion (57 percent from 2019). In the current quarter, both have forecast losses.

This also applies to Delta Air Lines, Air France-KLM Partner and Partner. Georgia-based Atlanta announced a 2021 rebound earlier this week. Revenue is still lagging behind in 2019 (29.9 billion, 57 percent from 2019), but Delta recorded a profit of approximately $ 280 million in 2021. In 2019, the company has a net profit of $ 4.8 billion.

Southwest Airlines, America’s fourth largest airline and budget airline, will release its results next week. European airlines, including Air France-KLM and Lufthansa, will follow in a few weeks.

In North America and Latin America, air traffic is rapidly recovering from the Corona crisis. This week the UN airline ICAO. This is followed by European aviation, mainly good summers and the Middle East; Air traffic in Asia and Oceania is still almost stagnant.

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More domestic development

The strong growth of domestic aviation in the United States and Brazil was a major factor in the recovery. On domestic flights, passengers do not have to worry about differences and ambiguities about corona restrictions (such as isolated rules) between countries. Despite the winter weather and the cancellation of hundreds of flights by Omigron, American airlines have greatly benefited from Thanksgiving and the millions of passengers around Christmas.

According to the ICAO, by 2021, global air traffic will carry 2.3 billion passengers. This is 49 percent less than before the outbreak. The average aggression rate of a device was 68 percent last year; One in every three seats was vacant. In 2019, the aggression rate was 82 percent. ICAO estimates gross domestic airline losses at $ 204 billion by 2021; In 2020, the loss will be $ 372 billion.

The ICAO also found that domestic air traffic was returning much faster than international flights. This applies to the United States and Brazil, but also to Russia and China, for example. According to the ICAO, from 2019 to 2021, the number of passengers on domestic flights worldwide was 68 percent; The number of international travelers is only 28 percent.

For many European airlines, the question is whether intercontinental transport, especially to North America, will begin soon. They are the planes that earn the most. Meanwhile, American airlines are taking their steps. Delta Airlines will offer 72 seats in Europe by the end of 2022, up from 88 now. Aviation analysts expect US airlines to make more use of their European counterparts. This may be good news for Air France-KLM. The Delta Air Lines partner now wants to serve more Americans through its own name, KLM and Air France bases in Amsterdam and Paris.