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By City A.M – Dec 30, 2023, 12:00 PM CST
- Airlines like Ryanair, Easyjet, IAG, TUI, and Jet2 reported record profits and significant business developments, despite facing various disruptions.
- Analysts warn of overconfidence in the sector, with concerns about the sustainability of the travel boom amid rising costs and geopolitical tensions.
- The industry faces uncertainties in 2024, including high oil prices, supply chain issues, and volatile market conditions, despite a slight increase in net profits forecasted by IATA.
It’s been a remarkable 2023 for Europe’s major airlines.
Travel demand has returned with a vengeance after years of Covid-related torment. Carriers across the board cashed in on a historic summer, announcing record profits, bumper dividends and a string of aircraft orders.
So-called ‘pent up demand’ — referring to holidaymakers desire for travel post-lockdown — stole the show despite a chaotic summer of disruption, which included a monumental slip-up at the UK’s National Air Traffic Services (NATS), European wildfires and continued airspace issues across the continent.
Here were the headline-grabbing moments at Britain’s most prominent airlines:
- Ryanair: Announced first-ever dividend for investors, forecast record annual post-tax profit, and placed a multi-billion dollar order for 300 Boeing 737 Max jets, burying the hatchet on an 18-month feud with the manufacturer.
- Easyjet: Reinstated the dividend, ordered 157 Airbus aircraft, and posted record profits over the busy summer period.
- British Airways owner the IAG: Record profits in two consecutive results, between January and October, and a forecast to return to pre-pandemic levels by the end of the year.
- TUI: Doubling profits despite a major hit from wildfires on the continent. London markets are shuddering at the thought of a potential delisting, revealed in its December results.
- Jet2: Survived turbulence created by the departure of its long-time chief and founder, Philip Meeson. Helped by half-year profits doubling in November.
What lies in store in 2024?
It says a lot that such a booming year of demand ultimately posed more questions than answers.
Disruption has been a feature of this year. Ryanair chief Michael O’Leary’s furious tirade against NATS in a commons committee hearing summed up the thoughts of the entire sector on the UK’s air traffic system.
Many of the issues were out of airlines’ control. Wildfires, war in Ukraine and the Middle East and air traffic control strikes in Europe can’t be legislated for. Aircraft delivery delays at Boeing and Airbus are also largely in the hands of the two manufacturers.
But analysts say carriers may be getting overconfident,
