Air travel 2021: The sector began the year as one of Covid’s panto villains

Uncertainty continues to be the dominant concern for airlines and passengers

For airlines and passengers the run up to Christmas was a near repeat of 2020’s festive build up. A new Covid-19 strain dampened hopes that normality was close to a return. Instead, governments, including our own, scurried back into restriction and lockdown mode, hitting travel and hospitality.

There are grounds for believing that Omicron is less likely to stall recovery than the variants that emerged at the end of 2020, not least because of the success of the vaccination campaign last year.

Back at the start of last year, airlines hoped vaccines would at the very least have us all booking our sun holidays by Easter. Instead, Government demanded we spend the winter and spring cooped up, made “non-essential” travel illegal, and introduced quarantines for some incoming travellers that forced them to stay in hotels for two weeks at their own expense. Air travel began the year as one of Covid’s panto villains.

The Republic's curbs were among Europe's toughest. As late as May, Tánaiste Leo Varadkar, a former transport minister, was reminding people that sun holidays were "against the law". Even then, the Government was talking in terms of an August reopening, effectively wiping out a second consecutive tourist season.

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Various chief executives, including Michael O'Leary of Ryanair, Lynne Embleton of Aer Lingus and Willie Walsh of the International Air Transport Association, criticised Government travel policy. Similarly, unions representing aviation workers, the Irish Airline Pilots' Association (Ialpa), Fórsa and Siptu, all warned of the impact on their members' livelihoods.

Covid cert

In the end, the Government relented, partly. It adopted the EU digital Covid certificate on July 19th, albeit weeks after all other member states. And some restrictions remained on non-EU travellers, including those from the UK and the US, the Republic’s biggest tourist markets.

Nevertheless, it was a start of sorts. Flights in and out of the State picked up noticeably, although from a low benchmark. Their number grew 25 per cent to 393 on July 19th from 313 eight days earlier. However, the total was still almost two-thirds lower than the 955 journeys recorded on the comparable day in 2019, the year before the pandemic struck. Flights recovered to about half of pre-Covid levels through the rest of the summer.

Three days before Christmas, figures from Eurocontrol, the EU organisation of air traffic control organisations, showed 582 aircraft travelled in or out of the State, 74 per cent of the 783 total reached on the same day in 2019. Even so, the Republic continued to lag Europe, where numbers were just 11 per cent short of pre-Covid totals.

It was all too late for some. Stobart Air, operator of the Aer Lingus Regional franchise, folded in June, putting 480 people out of work and sending the total of Irish aviation jobs lost to Government Covid restrictions past 5,000. The airline had been solvent before the crisis, but its owner, British company Esken, pulled funding after failing to find a buyer on time.

Unions blamed the company's failure on Government and the National Public Health Emergency Team (Nphet), whose advice they argued was behind State intransigence on travel. Ialpa members protested at the Department of Health HQ in Dublin, handing in a petition demanding that the chief medical officer, Tony Holohan, and his officials end their opposition to the use of rapid antigen testing.

Hope for at least some of those workers emerged in the shape of Stobart's successor, Emerald Airlines. That company, founded by well-known aviation figure, Conor McCarthy, had begun talks on taking over the Aer Lingus Regional franchise in December 2020. The pair struck a deal in July, and McCarthy subsequently indicated there could be opportunities for former Stobart staff.

Emerald is now likely to launch its first routes between Ireland and Britain on St Patrick's Day. The deal was evidence that airlines expected normality to begin returning.

Aer Lingus had been losing €1 million a day up to reopening, but began rebuilding its schedules as well as stepping into some of the routes vacated by Stobart to ensure continuity.

In October, it announced a 2022 schedule that restored much of its transatlantic routes, a boost for tourism and business. It also launched services from Manchester in England to Barbados, New York and Florida.

Restoration

Ryanair, meanwhile, began restoring its capacity across Europe at a faster rate than rivals. By the end of the summer, the airline was predicting it would fly 10 million passengers a month through the autumn.

In the Republic, Ryanair announced that it would restore pre-Covid services at Cork and Shannon airports from next year. It held back on Dublin until the Government announced €90 million cash aid for airports in the budget. This will primarily be used to offer discounts to airlines reinstating routes lost to State restrictions or launching new ones.

Following that, Ryanair signalled it could step up plans next year for Dublin Airport, where it and Aer Lingus are the biggest players. Last month, O’Leary told industry analysts that his airline could fly more than 160 million passengers in the 12 months to March 31st, 2023, its next financial year. By then it was cutting seat prices sharply to exploit the recovery in air travel, a move it calculated could leave it with losses of up to €200 million in the current financial year.

Ryanair is also taking delivery of 65 Boeing Max 737 aircraft up to next summer. As the only carrier expanding its fleet in Europe at this rate, O’Leary predicted that it would be in pole position to exploit opportunities left by competitors forced to cut their fleets or wind up by the pandemic.

While the Omicron strain has not changed the longer-term picture, the arrival of the new variant and the short-lived red-listing of a number of states by countries including Ireland and Britain that once again dented confidence in the sector prompted Ryanair to issue a warning days before Christmas that losses could be between €250 million and €450 million as bookings fell in the face of new travel restrictions.

The airline also said it would cut January’s scheduled capacity by 33 per cent and left open the possibility that it would take similar steps in February and March. However, this depends on further developments with both Covid’s latest variant and European governments’ responses to that.

The outlook on both now looks less grim than in the weeks up to Christmas. However, uncertainty continues to be the dominant concern for Ryanair, all other airlines and, of course, for passengers.