AIR TRANSPORT IS DOING BETTER, BUT....

May 08, 2022

 The good news is that air transport has started again, I would even say, very quickly. The planes are full and, even better, reservations for the summer period are working hard in all countries where you can travel normally. Is it necessary to remind those who preach the decay of this activity that the desire to travel and meet individuals other than those of their close environment, became vital as soon as the possibilities were offered. I also note that ecological pressure has been less virulent since the borders have opened.

 Certainly, not everything is back in order yet. An important part of the world, I mean Southeast Asia, is still under great constraints. This is explained by the strategy adopted which consisted in preventing Covid from infecting populations while in other continents, health authorities have rather favored herd immunity with the help of vaccines more efficient than those used in East Asia or even in Russia.

 In short, everything is going in the right direction. Air fleets long grounded are back on the road. It is even estimated that their use will be close to 100% by this summer, at least for the major Western countries. Aircraft orders are not slowing down. And airlines that have lightened a lot in the last two years are seeing their break-even point drop a lot. In this way, they will generate more quickly the profits essential to their development. Let us rejoice in this situation, without forgetting that there are still some serious difficulties to be faced.

 One thinks, of course, of the international situation created by the Ukrainian conflict, which is likely to get bogged down with the dramatic consequences for the civilian populations concerned, but also by the effects on the food of certain countries that are very dependent on Russian and Ukrainian agriculture. It seems obvious that the prices of raw materials and energy supplies will rise seriously, which will inevitably lead to an increase in air fares. But, at first glance, this does not dampen the ardor of customers who seem to easily accept to pay more for a service that has become essential even for leisure. Any medal having its downside, the difficulties related to oil supplies will lead manufacturers to accelerate the development of less polluting propulsion systems. In any crisis, there are opportunities.

 On the other hand, I note the unfortunate tendency of the unions to demand immediately wage increases or new adjustments to working conditions before the sector of activity has regained its necessary economic balance. It is therefore to be feared that social conflicts will erupt this summer. Many strike notices are also filed. Not all trade unions agree with each other. At Air France alone, both are fighting in court for curious questions of representativeness that still have the consequence of calling into question the social decisions already acquired after months of discussions.

 Another concern, the reactivation of the crews does not go without some difficulties related to the loss of the reflexes of the pilots. This will increase training costs. Incidents, albeit not very serious, arise in some routine operations. The aerial machine is extremely complex and the mechanisms can quickly take hold. The interface between carriers and airport infrastructure is difficult to calibrate. It is easier to reopen a new destination than to put a new airport terminal back into service. Thus , we are already witnessing bottlenecks caused not only by a lack of services on the ground, but also by the addition of sanitary procedures that were not previously known.

 Finally, we cannot ignore the continuous jet setbacks that Boeing is trying to manage. The major American manufacturer has not finished paying for the calamitous management of the previous team which favored short-term profit to serve the dividends claimed by the investment funds present in its capital, to the detriment of the elementary rules related to safety. The FAA has lost confidence in the manufacturer's teams and will make the manufacturer pay dearly for the consequences of the certifications of the Boeing 737 Max. This is not good news. It is indeed essential that at least two manufacturers share a market that is growing again.

 Clearly, we can now see the end of the tunnel.