Issue No. 844
A Year of Inflection Points
Is 2022 The Year The Recovery Begins?
Pushing Back: Inside The Issue
If there's one phrase that airline executives have repeated this year, it's "inflection point" (followed closely by "pent-up demand"). The pandemic's inflection point would mark when Covid-19 began to recede, pent-up demand was unleashed, and the recovery really began. Remember this time last year? Then, airline executives said the first quarter of this year, when effective vaccines became available, would be the inflection point. In the face of new variants and new outbreaks, the inflection point moved to the summer. And for many airlines in North America, South America, and Europe, the summer was good. Demand was strong, until the Delta variant crashed the party. Business travel, expected to return in September, never really came back as airlines expected. By the third quarter, the new inflection point was the end of the year. Now, with the Omicron variant, airline leaders are looking to the first or second quarter of 2022.
They weren't wrong when they made their predictions. Airline executives were working with the best information they had at the time (and no small amount of hope). The problem was and is that SARS-CoV-2 and its variants keep moving the goalposts. We found no better evidence for this than next summer's busy transatlantic schedules, which many airline leaders admit are more aspirational than actual. So when will the inflection point really occur? We can't say, until we know more about the Omicron variant and until governments further fine-tune their responses to new versions of the virus.
In some ways, though, the inflection point is irrelevant. Perhaps it's better not to yearn for 2019 but to focus on what's in the realm of the possible. And part of that exercise is to look at this year, which began with most airlines around the world operating a mere fraction of their pre-pandemic capacity. The year is ending with many airlines in Europe, North and South America, Africa, and parts of the Pacific (excluding much of Northeast Asia, which remains shut down) operating at close to pre-pandemic levels, with some, like Qantas, expecting domestic capacity to exceed 2019. Compared with this time last year, that's an almost unimaginable achievement. Airlines are in a buying mood again, ordering hundreds of new aircraft. Again, something that seemed unimaginable last year, when so many companies were questioning their survival. People will travel again. The world's population is growing, so even more people will travel. But the way we travel may be different. So maybe instead of looking for that elusive inflection point, we should just consider this year and next as years of transition, with a changed industry emerging at the end.
Elsewhere in this issue, we dig into the transatlantic schedules planned for next summer as well as dozens of route launches. Hawaiian is banking on Japan reopening in time for next summer. Several U.S. airline leaders came under fire in a testy Senate hearing ostensibly on the Payroll Support Program. And Airbus stole a march (or a few hundred marches) on Boeing by snagging the largest aircraft order in Australian history from Qantas, and a new order from Air France-KLM.
This issue is the last Airline Weekly issue for the year. Our next issue will be dated January 10, 2022. But we're not going away! Check the Airline Weekly website for daily news updates and our weekly podcast. To those of you celebrating, we wish you a very happy holiday season. And we wish everyone a very happy New Year. Here's to a happier, and less memorable, 2022.