▷ Just a breather, comment on the aviation industry by Lisa Schmelzer


01.11.2021 – 19:40

Stock exchanges newspaper

Frankfurt (ots)

Ryanair reports the first quarterly profit since the outbreak of the corona pandemic, and Lufthansa also wanted to end up in the black in the last quarter, which will be reported on tomorrow, at least on an Ebitda basis. After the devastating months that lay behind the airline industry, this is certainly good news for companies and investors, but the end of the crisis is still far from being established. A look into the near future alone shows that: yesterday, Ryanair lowered its forecast for earnings for the entire financial year, which ends in March 2022. Because the low prices with which the company is trying to attract customers are just as bad of profit as the significantly increased spending on aviation fuel. And Lufthansa is expecting just 40% of the 2019 capacity for flights for the year as a whole.

The low-cost carriers have been reporting a recovery in their business for longer than the network carriers, as short and medium-haul trips were again possible much faster than long-haul flights, which are still subject to travel restrictions. But even Ryanair and Co. have not yet shaken off the crisis. The pre-crisis level of 2019 has not yet been reached in terms of supply and demand, strict travel rules are causing additional costs and the sharp rise in oil prices is burdening low-cost carriers and network airlines alike – especially as more and more companies are starting to insure themselves less against fluctuations in fuel costs. This is currently beating heavily in the office.

The Irish low-cost carrier does not expect a sweeping recovery until next year. Lufthansa believes that it will only be able to reach the pre-crisis level in the medium term. But even if the return to the profit zone succeeds faster than previously expected, that would only give companies a breather. Because the next challenges for the industry are just around the corner. On the one hand, it is important to reduce the mountains of debt that Lufthansa has accumulated over the past two years and, at the same time, to maintain innovative strength. The latter is all the more important because the pressure on airlines is growing to make their business more sustainable. Investments in new, more environmentally friendly aircraft must be borne as well as the costs that the airlines will face as a result of the reorganization of emissions trading and the other measures envisaged by the EU in its climate package.

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