Summer has arrived in the UK and Europe and yet staycation has become the mot du jour for most Brits and Europeans. In the US, staycation has a slightly hollow ring to it since the country is so vast, domestic travel requires air travel which has, and is continuing to, bolster airline earnings.
Helane Becker’s latest report from Cowen shows US air travel over the Memorial Day weekend was certainly buoyant (see Americas, Airlines news below), with US airlines expecting a surge in demand for summer domestic air travel. In Europe, however, the slow removal of restrictions caused by concerns over the Covid-19 variant currently gripping India, has translated to a lukewarm start to the summer travel season.
Today, Wizz Air has posted a €482 million loss for fiscal year 2021 following a 73% fall in revenue (see Europe, Airlines news below). CEO József Váradi said that he was “cautiously optimistic about the recovery of the business, which has started later than what we would have liked as COVID-19 restrictions have remained in place longer than anticipated”. He added that 2022 will continue to the a “transition year”, which is a stark reminder that airlines have a long way to go to survive the health crisis especially since the bulk of summer bookings in Europe at least will at best need to rely on last-minute travel if restrictions to holiday hotspots are lifted but based on the prevailing attitude in sunny UK today, many have written off a foreign summer holiday as too expensive and too uncertain. Airlines that have repositioned to be more flexible and able to react swiftly to government announcements may still capitalise on a late summer surge. Like Wizz Air has, most European airlines will expect to report a loss for 2022 and are already planning for “real” recovery in 2023.