Labour shortages and inflation were the two biggest issues facing the aviation sector as it emerges from the Covid-19 pandemic, making it difficult for airlines to satisfy growing demand and pushing up operational expenses, a report said.

Labour shortages are across the board, from pilot, to baggage handler, to ticket agent, to flight attendant, to aircraft mechanic, while the rise in the price of fuel is the main factor in rising costs, according to global leader in management consulting Oliver Wyman’s recent Airline Economic Analysis 2021-2.

André Martins, Partner – Head of IMEA Transportation and Services at Oliver Wyman, said: “Airlines have been at the receiving end with the fuel price hikes and personnel shortage impacting their bottom-line.”

 Key insights for the Middle East include:

•    The conflict in Ukraine has exacerbated existing stress on commodity markets and supply chains, and meant flight restrictions due to closures of airspace and sanctions. In January 2022, just before the conflict began, Middle East countries represented the second largest destination for air travellers from Russia, at 28% measured by scheduled seats (behind Europe with 42%). In the other direction, the UAE represented 9% of the share of international seats headed to Russia at the same point in time, second only to Turkey.
•    Compared to the spike in demand for leisure travel, business travel is recovering slowly.
•    Sustainable aviation is still a way off, with battery-operated and hydrogen-propelled commercial airliners facing technological and regulatory hurdles, and sustainable aviation fuel too expensive and too scarce to be a viable option. In fact, the aviation sector is likely to see an increase in emissions before they fall. Qatar Airways and Dubai Airports have both signed a pledge to work towards 10% sustainable aviation fuel by 2030, reflecting regional momentum.
•    Air cargo is a bright spot, driven by a growth in e-commerce during the pandemic, and shortage of truckers.

“Every downturn in the global economy has proven to be the time for new market entrants in the airline industry. This time around, it has been no different – we have seen multiple airline start-ups just launch or prepare for an upcoming launch such as Akasa Air in India, the proposed new airline in Saudi Arabia, and Avelo in the US, among many others” said Martins. – TradeArabia News Service