Troubled days for the aviation sector … Possible bankruptcies for companies with the chaos of unrest

Officially and unequivocally, a number of European governments have asked airlines to cancel flights they cannot provide this summer, in an effort to avoid further chaos and congestion of passengers at airports, and aviation authorities also have companies operating in the sector was asked to have schedules Affordable summer outings.
This request did not go unnoticed. Tens of thousands of passengers were negatively affected at the last minute by the delay or cancellation of their flights. After their arrival at the airport, a number of the largest European airports turned into an arena of chaos.
Many of the largest European airports this summer, where Europeans travel for the summer holidays, have struggled to overcome the problem of staff shortages, and officials in them have tried to reassign employees after large numbers of them left during the travel stop in the two years of the Corona pandemic.
But the nature of the lengthy security surveys of up to 16 weeks to check the background of new employees, and the level of wages that do not seem attractive to many, make the recruitment process fraught with complications and problems, and quickly make the process difficult to adapt to the appointment of more workforce.
The crisis was not limited to European airports, as it extended to Australian, US and Canadian airports, and the shortage of security, customs and immigration staff caused long queues of travelers.
Here, Roger Link, deputy executive director of the British Airport Workers Union, expects this crisis to continue until next October.
He told Al-Eqtisadiah that “the pent-up demand for travel will not stop even after the end of the summer holiday season, and there will be no decrease in air traffic as usual after the summer.”
The figures show the extent of the confusion at European airports at the moment, as 25 per cent of scheduled flights departed 34 minutes later than the scheduled departure times, and in some airports, such as in the Netherlands, 36 per cent of flights were delayed, and British Airways The company canceled 8,000 flights on its schedule from March to October, while EasyJet canceled almost 40 flights a day for the rest of the month.
And the European Air Transport Agency has warned that the number of flights in the coming months will exceed the capacity of control centers, and that conditions could be very bad in Munich, France and Athens, and that most European airports operate near their maximum capacity, amid calls from the Agency for Countries to review or prepare their operations to address more disruptions.
The numbers were also not in the interest of the United States either, but it was undoubtedly much better than the situation in Europe, as about 3 per cent of scheduled flights were canceled last June, and the total number of cancellations increased since the start of the season has. with 16 percent, that is, an estimated 13,581 flights compared to the same period last year.
And Johnson Tilly, an aeronautical engineer at London’s Gatwick Airport, told The Economist: “Conditions in the United States are better than Europe. Most U.S. airlines, including large corporations, began leasing in mid-2021. consistent with the return of domestic travel, and for this they were more willing to cope with the increasing demand for summer travel.
He added, “Also, the restrictions imposed on the Corona epidemic in the United States were less severe and varied between states, which is why the flight numbers have not decreased as significantly as those in the major European countries. “
However, Tilly added that a series of technical problems contributed to disruptions across Europe, as Switzerland temporarily closed its airspace following an information technology flaw, and flights to Luton Airport in London, which is the gateway to mainland Europe due to a power outage , was canceled, as for Prague Airport.The airport operated with reduced capacity after a failure in the air traffic control system.
But the technical aspects behind that crisis were, according to some, not the only reason. At the height of the Corona pandemic, European airports and airlines abandoned the work of nearly 191,000 European aviation workers, and the United Kingdom was one of the countries to adopt the same approach, leading to the mayor of London, Sadiq Khan, argued that Brexit was to blame for the chaos at British airports, and called on the government to relax immigration rules so that EU airport and airline workers could return to the UK and avoid what he called the “misery” of summer travel .
Of course, those calls were rejected by the government of Boris Johnson, the sacked prime minister, and his senior officials said in response to the mayor of London that opening the door to foreign workers would not be the solution to easing pressure on the aviation sector. not. , and they blamed industry leaders and accused them of suffering excessive job losses. During the COVID-19 pandemic, many people are not expected to return to international travel when restrictions are eased.
Commenting on the situation, Alan Joyce, a former consultant for a number of European airlines, told Al-Eqtisadiah: “Two years of stopping domestic or international travel has left airlines rusting, and now they are trying to flow back to normal roads. , as it must be borne in mind that the Aviation industry is a world in itself, with a large workforce, and which contributes a large percentage to the global economy, and the sector was set to achieve great growth despite the challenges it faced until it was struck by a lightning strike due to the Corona epidemic, which led to a major collapse in the sector.
In fact, the available data for the role of the international aviation sector, and all for the period before the outbreak of the Corona epidemic, show an important and very positive sector with regard to its contribution to the world economy. internationally, the sector supported more than 64.5 million jobs worldwide, and was responsible for $ 2.7 trillion in activity. The outlook for the Corona pandemic was refreshing and positive, as the sector’s economic contribution was expected to reach $ 5.7 trillion by 2036, while some 97.8 million workers would work in the sector.
But those positive expectations about the future of the aviation sector are now in question, as it appears that the pressure on international airlines has reached the point where they have applied for bankruptcy, which has raised doubts about the resilience of small companies.
Finally, Scandinavian Airlines “SAS” has become the latest airline to file for bankruptcy in the United States, and the company has indicated in its bankruptcy filing that it has significant concerns about the impact of the recently announced pilot strike, and that it will have a negative impact on its liquidity and financial position.
Although the company has invited the pilots to return to the negotiating table so that the two parties can continue to talk and reach an agreement, former pilot Eric Stott and a member of the management team at the British Pilots Association believe that the filing for bankruptcy by SAS is only an introduction that other companies are likely to announce Bankruptcy, especially low cost airlines.
Stott explained to Al-Eqtisadiah, “Bankruptcy cases are not foreign to the airline industry, and major airlines such as American Airlines, United and Delta have applied for bankruptcy at one time, but this has been overcome by merging with other airlines. Attempt to be a better way of doing business, but this principle does not necessarily work in the world of aviation. “
He pointed out that many unprofitable airlines continue to operate despite years of losses because many stakeholders cannot allow them to close. National pride if the company is a national transport company, and therefore governments often provide a financial lifeline for him to ensure survival in the market, and the company has to reduce pricing and manpower, which sometimes harms other companies that do not lower their prices.
In fact, aircraft are very expensive equipment, airlines have to maintain a high lease or loan installments, regardless of business conditions, in addition to their need for a large workforce to manage their complex operations, in short, fixed costs are often relatively large.
It is now clear, two years after the Corona pandemic and the decline in air travel, that many airlines have emerged from that confrontation with the Corona virus in a state of extreme financial fatigue, and as chaos continues at European airports, and airlines forced to cancel thousands of their flights, it is certain that Difficult days await the companies operating in the sector, and bankruptcy could be the fate of many of them in the coming months.

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