EUROCONTROL expects another tough year for aviation

New analysis from EUROCONTROL reveals that COVID-19 led to a staggering €56.2 billion in net losses for Europe’s airlines, airports and air service navigation in 2020.

The losses are a result of 1.7 billon fewer passengers and 6.1 million less flights than in 2019, with traffic between Europe and the rest of the world down 59% and intra-European traffic suffering a 54% decline.

The UK (-61%); Spain (-61%); Italy (-60%); Germany (-56%); and France (-54%) all suffered a dramatic fall in traffic as markets across the continent declined by between 40% and 73% during the year.

Its new ‘Think Paper’ notes that the downturn cost 191,000 aviation related jobs across Europe in 2020 and that by the end of the year 51% of aircraft operated by the region’s airlines were grounded.

The number of grounded aircraft aircraft at year end was, however, an improvement on the 87% of ‘out of service’ aircraft at the height of the pandemic in April, 2020.

Reviewing the impact of the pandemic on airports, it notes that ACI World is estimating net losses of €33.6 billion for Europe’s airports over the course of the year.

EUROCONTROL states: “The recovery in the number of passengers has been significantly weaker than that of flights, reflecting the use of smaller aircraft and low load factors.”

Thankfully, it predicts that 2021 will be a little better for aviation, forecasting that the rollout of COVID-19 vaccines should lead to “steady progress by the summer of 2021, which will have a positive impact on European aviation”.

Its outlook for 2021 includes the following predictions and warnings:

• European traffic for the whole of 2021 is expected to recover to 51% of 2019 levels, with faster recovery expected from the summer onwards.

• More failures can be expected in 2021, highlighting the need for financial support to the entire industry.

• Airlines and airports need clarity on slot exemptions to plan in 2021.

• Decarbonisation funding must be increased.

• Regional connectivity must be maintained.

• Air traffic services reform is urgently required to ensure scalable capacity in the years ahead, with collaborative decision-making between ops stakeholders guided by the EUROCONTROL Network Manager.

• We must continue to innovate and invest in future technological solutions in all aviation domains.

• We cannot miss the opportunity to ‘build back better’.

Possible future traffic scenarios
On November 4 last year, EUROCONTROL produced a five-year forecast covering the 2020-2024 period, and factored in the volatile COVID-19 situation to produce three scenarios.

The new report states: “We are currently on course for Scenario 2 (Vaccine widely, not partially, available for travellers, or pandemic end, by summer 2022), which predicts a return in 2021 to 51% of 2019 traffic volumes or 5.64 million flights.

“Under this scenario, traffic returns to 92% of 2019 volumes by 2024, or 10.24 million flights, with 2019 levels only reached fully by 2026.

“This factors in likely progressive vaccine deployment across Europe over the year, but not yet reaching full coverage/disappearance of COVID-19.

“Scenario 1, the most optimistic (Vaccine widely, not partially, available for travellers, or pandemic end, by summer 2021), predicts that traffic will only return to 2019 levels by 2024.

“However, despite multiple vaccines on or close to market, this looks less realistic: some vaccines remain in the regulatory approval stage, and vaccine rollout is unlikely to be complete across all population sectors and countries for quite some time.

“Least likely, based on current developments, is Scenario 3 (Vaccine not effective: lingering infection and low passenger confidence), which envisages a much slower recovery with traffic only returning to 2019 levels by 2029.

“However, even in the most optimistic of these scenarios, traffic will only return to close to 2019 levels in 2024 (92% of 2019), which highlights the importance of concentrating efforts, as traffic slowly recovers, on how the entire system can be ‘built back better’.

Key conclusion
Ending on an optimistic note, the report notes: “2020 is behind us now and the rollout of vaccines has already started. It will take time, but we expect steady progress by summer 2021, which will have a positive impact on European aviation.

“This positive impact can be enhanced if we start to take action to tackle a number of core issues that need to be addressed if European aviation is to build back better.

“Our analysis leads us to make a number of predictions for 2021, and reach some key conclusions that should be acted upon in order to maximise the window of opportunity offered by this crisis to rethink what does not work well.

“In short, we cannot miss the opportunity to ‘build back better’ in terms of relooking at the way the system is financed, regulated and integrated, and how it addresses sustainability.”