Global demand for air travel is set to return to pre-pandemic levels by 2023, without airlines having to make fundamental changes to their business models, according to the president of Emirates airlines.
In an interview with Aviation Business, Sir Tim Clark said that, providing coronavirus is being dealt with meaningfully and vaccination programmes are successful, the airline industry will return to its “former glory sooner than other people are thinking”.
He added that by around 2023, carriers will see the restoration of 2019 levels and begin to recapture the growth that had been going on until the coronavirus outbreak in March last year.
“That assumes, of course, that the pandemic is dealt with meaningfully [and the] dissemination of the vaccine and its efficacy remains as good as people are told [it] is going to be,” said Clark.
“So why then should we not recapture what we were doing before? Why should there be fundamental changes to business models? It doesn’t have to be like that,” he asked.
Clark, pictured below, said he was confident that passengers will return to old flying habits when they are allowed to.
“I don’t subscribe to the view that there is going to be a step-change, a quantum change in the way people go about their business when it comes to flying,” he said.
“There has been a real move to suggest that the airline industry will never be the same again. I do not subscribe to that view at all. I think that people will continue to travel in all the segments. Some segments may be weaker than others in the short term, but eventually, it’ll come back. What does that mean? There is absolutely no reason why [Emirates’] network should not be restored to its former glory with the fleet as it is,” he added.
But the industry veteran said that some airlines seeking to become more profitable post-coronavirus may want to consider relying less on third party intermediaries in the future.
“There are too many entities that have grown with the business, and they have become hugely profitable on the back of our business when our profitability, certainly in the airline industry, hasn’t been particularly stunning,” said Clark.
“But it is important that people who come after me focus on eliminating the need to rely on intermediaries who are always there to seemingly help you out. So you really need to concentrate and that’s something we’ve done in Emirates: focused on our own destiny, our own business model.
Control of everything that we do within the global markets is done by us, and where we have to go to third parties where we don’t have choice, we must do that. But progressively, we need to improve the profitability by eliminating third parties who dilute and compromise that,” he continued.
Clark’s comments come as annual passenger demand for Middle East airline slumped by nearly 73 percent in 2020.
According to figures from the International Air Transport Association (IATA), passenger demand was 72.9 percent below 2019.
IATA also said that annual capacity fell 63.9 percent and load factor dropped 18.9 percent to 57.3 percent.
December’s traffic was down 82.6 percent compared to December 2019, improved from an 86.1 percent drop in November as the UK temporarily set up a travel corridor with the UAE.
The UAE has since been added to a ‘red list’ of countries where direct flights between the two countries have been suspended until further notice amid fears about new strains of the virus.
Globally, IATA said that passenger demand fell by 65.9 percent compared to the full year of 2019, by far the sharpest traffic decline in aviation history.
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