The aviation sector was particularly affected by the Kovid-19 epidemic. The latter was dormant for a long time but with the withdrawal of restrictions the latter came back to life. How does this sector work in Europe? Response from our German and Irish neighbors.
In Germany, Lufthansa goes downhill
In Germany, Lufthansa is one of the airlines most affected by the Covid-19 crisis. It returned almost all of the aid provided by the German government. Carston Spohr, the company’s boss, was motivated to repay state aid. At the time of receiving this assistance, the Lufthansa was almost under the supervision of the government. When she lived with a drip, the company could not pay dividends or bonuses to managers. The company received high support: a total of 9 billion euros in aid assistance to Brussels and Berlin, and 3 billion in loans through the public bank KFW, and 6 billion from the stabilization fund established by Berlin. Lufthansa ultimately needs only half of the final program. This year, the company repaid all direct assistance in stages. One billion credits were repaid in February, 1.5 billion in October and another billion in November.
This is not the end of Lufthansa’s difficulties. But the resumption of aviation, a continuation of the restructuring plan, and, above all, the campaign highlights the confidence of private capital markets, which were able to issue 2.2 billion euros in new shares in October. “State aid enables us to save 100,000 jobs”, Underlined by the President of the Company. But since the beginning of the health crisis, Lufthansa has reduced its workforce by 30,000. Without dry dissolution. If the aid received from Berlin has been repaid, it will not be the same as it was received from Austria, Belgium and Switzerland, the three countries where Lufthansa was bought by national companies.
The fourth wave of the Pandemic and the new variant, the omiciron, affect Germany. In November, for the first time since March, volumes declined after continuous increases in summer and early fall. In November, there were 175,000 thefts, 33,000 less than in October. The airlines were banking on the resumption of flights in the Atlantic Ocean. Overall, traffic increased slightly compared to 2020. But we are still far from the 2019 standard of a record year with 1.5 million to 3.3 million flights since the beginning of 2021.
The confidence of Ryan Air passengers in Ireland must be restored
Low-cost carrier Ryan Air will depart from the London Stock Exchange on Friday, December 17th. The Irish company is no longer listed on the Dublin Stock Exchange. It’s more than a pandemic, it’s a consequence of Brexit. Ryan Air announced last month that it was withdrawing from the London Stock Exchange. With the UK’s exit from the European Union, the airline now holds less than 50% of its European shareholders. So above all it is a way to protect its presence and its lines within the European block. The decision is perfectly economical, will not affect operations and will still be able to fly in and out of the UK. In addition, the Navy Company launched several new routes between Birmingham and Nok, west of Ireland or between Grenoble and London.
Officially, this has nothing to do with the financial results of the Irish Group, although of course Ryaner, like all airlines, has suffered greatly from the effects of the Pandemic. In fact, the year 2021 is completely unclear for the group. Better than 2020, with a quarter of the green for the first time in two years, a clear recovery in traffic. But the number of passengers is much less than before the Pandemic, about half. In November, before the discovery of the Omicron variant, a spokesman predicted a return to expansion in 2022. Overall, Ryanair, which remains the largest low-cost company in Europe, expects to incur a loss of 200 200 million this year, and had to resort to very low rates to fill aircraft during the holiday season.
To fill its planes … and to regain the confidence of its passengers. In addition to the financial crisis, there is a real reputation crisis. From the beginning of the Pandemic and the first travel restrictions, the company has been dragging its feet in repaying unmanned flights. Recently, some passengers explained that they had been “blacklisted” and prevented from boarding the flight because they had asked for a refund without canceling the flight due to health reasons. The group’s image was also tarnished by the departure of its CEO, Michael O’Leary, who had publicly opposed the health measures. He has now described the travel restrictions associated with the Omicron variant “Inconsistent and disproportionate nonsense decided by a bunch of idiots.”
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