Discussing the European airlines market with Ms Ourania Georgoutsakou, Managing Director of Airlines for Europe

As we reflect on the summer months, how would you assess the European airline market in terms of performance? Are there any specific trends that were noticeable?

This summer has proven to be a strong season for European airlines. The appetite of consumers to get away, travel and explore Europe is still there. Thankfully, the operational challenges of last summer have receded, though they have not entirely disappeared. You only must look at the disruption caused by the ATC failure in the UK a couple of weeks ago. But overall European airlines have come through the summer in a much healthier and stronger position.

Having said that, it is important to remember that airlines are still in recovery mode. Eurocontrol data show that traffic is 94% of 2019 levels. So, we’re not quite there yet and this recovery is obviously spread unevenly across various airlines and destinations/markets. For some A4E members, passenger numbers are at their highest-ever levels. For others, they still have a way to go following challenges such as the Pandemic and the impact of the War in Ukraine. But the sector is not taking things for granted. For all our members, it is important to put this summer in perspective. The airline sector is a very cyclical sector and we have seen how things can change in an instant.

The aviation industry continues to face a dynamic environment. Could you share your insights on the key challenges that European airlines are likely to encounter in the coming months?

Over the past two summers, we have seen how airlines operate in a system which relies on the coordination and cooperation of many different players to deliver a successful service. One of the services we rely on is air traffic management and this continues to be a challenge. Eurocontrol has reported that the total air traffic flow management delays are up 10% from last year and weather-related delays are up significantly at 70%. Ensuring that there is adequate airspace capacity and that when something goes wrong, measures are swiftly put in place to minimise disruption is essential.

Economically speaking, there continue to be cost pressures. We will need to keep an eye on fuel prices. Oil is creeping back towards $100 a barrel and this obviously has an impact on aviation fuel prices. Wider geopolitical instability can also have repercussions for the sector and result in very real operational challenges, as the ongoing Ukraine airspace closure illustrates.

On a positive note, because the sector is dynamic and can never stand still, many airlines are constantly looking for opportunities to evolve their service and their offering. Whether this is through the opening of new routes and services, the introduction of new, more efficient aircraft or finding ways to make the travel experience more seamless.

As we approach 2024, many stakeholders are curious about the anticipated trends that might shape the aviation industry. Are there any emerging trends that European you would like to highlight?

Ensuring the economic and competitive viability of Europe’s airlines will be a longer-term challenge. The EU has passed some of the most comprehensive sustainability legislation in the world and the impact on aviation will be significant. While we are determined to achieve our ambitious Net-Zero target for carbon emissions, a target set out in our joint Roadmap called Destination 2050, there is a significant cost implication for this. The EU needs to ensure that in the drive for sustainability, European airlines can continue to compete on an equal footing in a globally competitive environment.

Next year is an election year in the EU and it will be important for the new Commission and the new European Parliament to ensure that Europe remains strong, competitive, and innovative. The focus will need to shift to delivering on the EU’s green agenda, by becoming a global leader for sustainable aviation technologies and sustainable aviation fuels (SAFs).  The EU has a global lead on the regulatory framework, we now need to invest in accelerating the development of the technologies and fuels that will decarbonize aviation.

It’s also worth highlighting how digitalisation will be an ever-present trend in our sector. Whether it is through airlines innovating with new digital tools for improving the travel experience, the EU implementing digital border technology to make border control more seamless or the use of AI to improve efficiency in flying, the advances are changing flying for the better in an exciting way.