Europe's Tepid Summer

The Summer Isn't All That European Airlines Hope For

Pushing Back: Inside the Issue

Second-quarter and first-half earnings for European airlines have proved to be a mixed bag. While their U.S. counterparts pop open champagne and say the worst of the crisis is over, European airline CEOs are more measured. Some markets, like Spain, are coming back quickly, fueled by leisure travel and helped by the country's relatively faster reopening, while others remain moribund. CEOs express very cautious optimism about the second half of the year but admit that the real recovery may not start until early next year. And here's yet another sobering statistic: IAG reported that business travel across its system is 5-10 percent of pre-pandemic levels. So no champagne, yet.

Meanwhile, airframers are optimistic that airlines will replace retired fleet types with next-generation aircraft. Airbus, in particular, is looking good. Boeing is emerging from more than two years of crises, starting with the 737 Max grounding, and although it still has some issues with its 787 and 777X programs, it thinks the most of its worst days are past. Interestingly, both airframers said they are planning new freighters: Airbus green lighted the A350 freighter variant, while Boeing said it could start work on a 777X freighter. Elsewhere in the issue, smaller U.S. airlines reported their earnings, and AerCap kicked off the lessors' reports. Next week, Lufthansa reports, as do several other lessors.

Verbulence

“A few years ago, O’Leary couldn’t even spare the word Wizz. I’m glad he’s spending half of his presentation on us though.”

Wizz Air CEO József Váradi