Dubai: Airlines will see higher passenger numbers in 2022 as travel restrictions ease - but the Ukraine crisis will bring fresh challenges, according to a top industry official. Oil prices shot up above $100 a barrel for the first time since 2014.
Apart from higher fuel costs – the largest fixed expense for airlines – operators are also facing increasing airport charges. “The oil price rise came at a really bad time for the aviation industry, we are also worried about airports increasing charges – a lot of the handling agents are also hiking charges,” said Kamil Al Awadhi, IATA’s Regional Vice-President during the Arab Aviation Summit on Tuesday.
“In general, it's another wave of additional expenses for airline CEOs to worry about. While the airlines have very little resources left, they're resilient, but this resilience has a limit.”
Better outlook
Even though the Ukraine crisis has resulted in airspace bans across Europe, the IATA executive is optimistic about 2022. “The year has looked good so far other than what has unfortunately happened in Russia,” said Al Awadhi. “Just as airlines take a nice deep breath and try to recover, other ends of the spectrum start attacking. Hopefully, airlines will see a significant jump in passenger numbers in the next six months or so starting from March”
Little support
Although several airlines received financial support in the form of government bailouts over the last few years, it was not the case everywhere. “Not every airline received support from the government, whether it's state owned or not - I know a lot of state-owned airlines that had to go to the banks and take loans,” said Al Awadhi. “I don't think airlines actually have that much cash or support left to remain resilient. If the if the aviation industry doesn't turn around within the next six months, some of the airlines that we see today will not exist.”
