ISSUE 4 - JUNE 2022
to other EU member states, and indeed the UK, when it came to the implementation of travel restrictions.’ This is borne out by Eurocontrol statistics which show that traffic into and out of Ireland was at a lower level than that experienced by other European countries. ‘So all Irish airports and airlines suffered more than others in what was already a pretty catastrophic reduction in traffic,’ Moriarty notes.
INDUSTRY REVIEW: COMMERCIAL AVIATION
AIRLINES SEE BLUE SKIES AHEAD FOR IRELAND
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The pandemic has had a huge impact on many industries with commercial aviation at the top of the list. At the peak airline capacity typically dropped to around 20% to 30% of normal, creating major headaches for all the world’s airlines. In part this has been offset by a big increase in demand for air cargo.
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Now, despite the continuing economic uncertainties created by Russia’s invasion of Ukraine, there is a strong sense of optimism returning to Dublin Airport as the pandemic wanes in more and more countries. We talked to two leaders in the airline industry in Ireland, Donal Moriarty, Chief Corporate Affairs Officer at Aer Lingus, and Enda Corneille, Country Manager for Emirates in Ireland, about how their companies coped with the pandemic and their hopes for a return to growth. ‘I’m 36 years in the business and I’ve certainly never seen anything like it. I had thought 9/11 was the worst but the COVID pandemic was quite different,’ recalls Emirates Country Manager Enda Corneille. ‘Partly it was the speed and sheer scale of the effects of the pandemic but it also went across the entire industry supply chain as well – from airlines and travel agents to airports, manufacturing companies and so many
other businesses. There was an entire total evaporation of demand, which was a combination of fear from the consumers’ perspective with the border restrictions and actions by imposed by governments.’
four flights in early August but it was almost a year before it increased to five flights in July 2021. That was almost a 70% reduction in capacity, with load factors in the low 20% to 30%.
Aer Lingus’s Chief Corporate Affairs Officer Donal Moriarty concurs. ‘Obviously, the last two years have been without precedent in terms of the aviation sector. The sector has been through many crises in the past but they have really been dwarfed by the scale of the global crisis brought about by the pandemic.’
‘With daily flights now restored, I think we’ve managed to weather the storm well. We took the big decisions early,’ Corneille says. ‘We were ruthless in terms of cancelling flights. On the other hand, we were as generous as we could be in terms of offering passengers alternatives, whether that was to change flights or to get refunds, in order to retain goodwill.’
In late January/early February 2020 the Emirates team in Dublin began receiving emails on a daily basis giving notice of cancellations throughout the carrier’s network. ‘It was just before March 25 that we got word that Dublin was going to be suspended as well – with all 14 flights suspended. And when we did return it was with just two flights a week, purely for cargo,’ Corneille says. The schedule increased to
It has been a very similar story for Aer Lingus, which also saw capacity down to around a fifth of normal. But for Ireland some of this was arguably self-inflicted. As Moriarty points out: ‘Ireland decided, at a policy level, to implement the most stringent and longest lasting travel restrictions in the European Union. So Ireland ended up being quite an outlier in comparison
Even for a westward orientated airline such as Aer Lingus, with 16 routes on the North Atlantic traveling to destinations across the US, the impact was severe, with traffic for a considerable period of time effectively reduced to just New York, Boston and Chicago, and primarily for cargo transport rather than passengers. ‘Against that backdrop, industry participants, both airlines and airports, had to really look at cutting their cloth and restructuring their businesses, primarily from a cost perspective but also from a liquidity perspective, in order to see a way see through the crisis – and we certainly did that in Aer Lingus,’ Moriarty says. While the Employment Wage Subsidy Scheme was available to the Irish airline and the Government did eventually put in place a €90 million aviation industry support package in the October 2021 Budget, ‘Our employees very much stepped up and took very significant pay cuts over a protracted period of time,’ Moriarty acknowledges. For these carriers cargo has proved to be something of a lifesaver. ‘What really kept the business going from Ireland, indeed throughout our network, was cargo,’ says Corneille. ‘Early on, and in China in particular, airlines like BA and Lufthansa pulled out of the market
completely while Emirates continue to fly. And because we have aircraft with a sizable cargo capacity of 25 tons in the hold, as well as dedicated freighters, we were able to pick up a lot of business. So cargo has been the backbone of the airline for the last couple of years at this stage and has certainly delivered a lot of the revenue.’
safety in business class, where there’s more space.’
Looking to the future Corneille says: ‘The tide has turned in recent months and passenger bookings are coming back but we’re not yet back to what we would regard as normal. Once we passed the red letter day of July 19th last year, when restrictions on non-essential travel were lifted, we saw a steady return of the customer leading up to a very busy Christmas. And this demand has been sustained well in to 2022 and from an Emirates standpoint, over 90% of our pre-COVID destinations are now being served.
‘We’re now trucking cargo from Ireland to the UK to put it onto freighters departing from Manchester, London and even Amsterdam because we simply cannot fulfil the demand from here,’ Corneille says. ‘We’re carrying everything, including huge amounts of pharmaceuticals and food, such as baby milk formula, to China to the Middle East, as well as ICT products of all kinds. On inbound flights we’re carrying a lot of perishable foods, such as berries, at this time of the year. So overall cargo is still very busy.’
Aer Lingus’s Moriarty points out that the introduction of the digital COVID certificate across the EU unfortunately came too late to enable a summer to happen in 2021. Positive momentum in bookings was then affected, even if only temporarily, by the Omicron wave,as Aer Lingus builds back to 90% of its 2019 capacity by mid-summer 2022.
Looking ahead, both Corneille and Moriarty are optimistic. ‘There is there is a degree of ambition about our about our schedule and our capacity plan for 2022. It is important that remaining restrictions such as mask mandates and the pre-departure tests for entry into the US are removed. Their removal is important to allow passenger recovery to take place over the coming months,’ says Moriarty.
‘There has been a level of pent up demand, and we’re encouraged by the interest that we’re seeing for future travel,’ Moriarty says. ‘We need to remember that while the restrictions in various countries are being increasingly eased people are still working from home, or engaged in hybrid working, and that inhibits business travel. Having said that, while we have learned to communicate through digital platforms we also recognise they are not quite as good as face-to-face meetings.’ Corneille agrees. ‘What’s happening up at the front of the aircraft is very interesting. A lot of observers predicted there would be significant structural changes to business travel after the pandemic, with digital conferencing through the likes of Zoom and Teams replacing flying. But we’re seeing the opposite, we’re seeing huge demand for our business and our first class product. We have eight first class suites on each of our Dublin flights and 42 business class seats and these are regularly full – we’ve never seen demand like it. ‘I think it’s a combination of businesses eager to get back into the air, back to meeting customers, and maybe even some customers perceiving a degree of
At the same time, the cargo piece hasn’t slowed down. During COVID many manufacturers actually increased their production and, with less sea and air capacity available, demand was at a premium. That demand is still there.
‘I think going into the future there are certainly opportunities for us, whether that be a steady increase cargo activity, maybe new routes, maybe increasing frequency.’ Says Corneille. ‘We’re now putting cash on the balance sheet again, our margins are positive and we’re intent on growing the business back to pre-COVID levels as quickly as possible.’
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Enda Corneille
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