Emirates said it does not expect travel demand to slow down anytime soon, even as the industry grapples with a number of issues that have already caused havoc at airports ahead of the busy summer holiday season.
Tim Clark, president of the Dubai-based airline and a veteran air traveler, said he has “never seen anything quite like the headwind that the industry is facing right now.” However, vacationers don’t seem to be stopping themselves from taking advantage of the newly relaunched travel opportunities.
“It’s unlikely that, regardless of the obstacles – be it price or airport equipment – this demand will disappear in the short term,” Clark told CNBC’s Dan Murphy at the 78th annual general meeting of the International Air Transport Association in Doha. , Qatar.
The aviation industry has faced a range of challenges, from labor shortages and supply disruptions to rising fuel prices, which have resulted in weeks of severe delays and flight cancellations at some of Europe’s and North America’s busiest airports.
On Saturday, more than 6,300 flights within the US, to or from the US were delayed, and 859 flights were cancelled. according to FlightAware flight tracking platform. Likewise, tens of thousands of flights across Europe have been disrupted in recent days. 5000 passengers London Heathrow Airport is expected to cancel flights only on Monday.
The aviation industry has faced a range of challenges in recent weeks, from labor shortages and supply disruptions to rising fuel prices.
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However, Clarke said that for the time being, passengers seem to be willing to pay a price – both financial and otherwise – for post-pandemic travel.
“Airlines have had to raise prices to cover and mitigate the rise in fuel prices, which has been astronomical. But demand remains strong and we do not see it weakening,” he said.
How long this can go on is anybody’s guess, Clarke said. He added that rising inflationary pressures and a deepening cost-of-living crisis, as well as broader socio-political concerns as a result of the war in Ukraine, are creating further headwinds for the industry.
“Will demand decline or decline over the coming years as these underlying economic factors that are so unfavorable to our business and the global economy remain in place? Or will they fall first? I don’t know what it will be. ,” he said.
Clark called for greater collaboration and coordination across the industry to get past the peak of summer travel, noting that “we just need to get through this and focus on getting the job done, not beating each other up.”
However, he said he expects Emirates, which has suffered two years of billions of dollars in losses, including a $1.1 billion loss in 2021, expects to return to profitability in 2022.
“At this point, I’m happy to report that we’re making money,” Clarke said. “Unless something else extraordinary happens, I think Emirates will be profitable this fiscal year.”