Emirates said it does not see travel demand dissipate any time soon, even as the industry faces a series of challenges that have already created chaos at airports ahead of the busy summer holiday season.
Tim Clark, president of the Dubai-based airline and an aviation expert, said he had “never seen anything” like the headwinds currently facing the industry. However, tourists do not seem to be holding back from seizing the newly resumed travel opportunities.
“It’s unlikely, regardless of the drawbacks — whether it’s price, whether it’s airport facilities — that demand will dissipate in the short term,” Clark told CNBC’s Dan Murphy at the IATA’s 77th Annual General Meeting in Doha. , Qatar.
The airline industry has been hampered by a perfect storm of challenges, from labor shortages and supply disruptions to high fuel prices, leading to weeks of severe delays and cancellations at some of the busiest European and North American airports.
On Saturday, more than 6,300 flights within, within or departing the United States were postponed, and 859 were canceled, according to flight-tracking platform FlightAware. Likewise, tens of thousands of flights have been disrupted across Europe in recent days, and 5,000 passengers are expected to be affected at London Heathrow on Monday alone.
The airline industry has been hampered by a perfect storm of challenges over recent weeks, from labor shortages and supply disruptions to high fuel prices.
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However, Clark said passengers currently appear willing to pay the price – both financial and non-financial – for post-pandemic travel.
“The airline community has had to raise their fares to cover and mitigate higher fuel prices, which has been astronomical. But demand remains resilient, and we don’t see any slowdown in that,” he said.
Clark said how long that could last is anyone’s guess. He added that rising inflationary pressures and a worsening cost-of-living crisis, as well as broader social and political concerns as a result of the war in Ukraine, are all factors that lead to further headwinds for the industry.
“Is demand going to shrink or drop over the coming years because these major economic factors – which are very opposite to our business and the global economy – will still be in place? Or will they go down first? I don’t know which they will be,” he said.
Clarke urged more industry cooperation and coordination to get past the peak of summer travel, noting “We just have to beat this and focus on getting the job done, rather than beating each other.”
However, he said he expects Emirates, which has been hampered by two years of billions of dollars in losses, including a loss of $1.1 billion in 2021, to return to profitability in 2022.
“At the moment I’m happy to say we’re making money,” Clark said. “Unless something out of the ordinary happens, I think Emirates will be profitable in this fiscal year.”