Recession, what recession? European carriers say bookings are holding up

Rich Higgins /

There’s a lot of concern over rising inflation and cost pressures and how it will affect spending on air travel, but bookings are holding up so far, according to statements by major European airlines.  

IAG, which owns British Airways, Iberia, Aer Lingus and Vueling, said trading during the third quarter of 2022 was better than expected and bookings for the rest of the year are normal. 

“Forward bookings remain at expected levels for the time of year, with no indication of weakness, and accordingly our fourth quarter expectations remain unchanged as of today,” the group said in a brief statement to the stock exchange on October 13.  

Thanks to the strong summer performance, IAG said it expects a pre-exceptional operating profit of approximately €1.2 billion ($1.17 billion) for the third quarter to September 30, 2022.  

Summer 2023 bookings 

Meanwhile, low-cost carriers easyJet and Ryanair delivered some positive news too.  

easyJet gave an update on its financial results for its financial year, which ends on September 30, 2022. While it is predicting a loss before tax of between £170 million and £190 million ($190-$213 million) for the year as a whole, it returned to profit in the final quarter, which covers the key summer period. In the fourth quarter, easyJet expects headline earnings before interest and tax (EBIT) to be between £525 million and £545 million.  

For the first quarter of the new financial year, the budget carrier said UK capacity during the peak travel periods such as October half terms and Christmas was back to pre-pandemic levels. “Bookings continue to progress well with load factors ahead of the same point in FY19 and yields remain robust,” easyJet commented in the October 13 statement.  

Further ahead, chief executive Johan Lundgren said passengers were already snapping up tickets for summer 2023.  

“Our summer 23 season went on sale last week and we were filling the equivalent of more than four A320 aircraft a minute in the opening hours demonstrating the continued demand,” Lundgren commented.  

Trading down? 

Lundgren said easyJet was well placed to meet the uncertain economic backdrop. “easyJet is Europe’s largest operator at primary airports with one of the strongest balance sheets in the aviation industry. We face the uncertain macro-economic environment with many strengths through our brand, network and business model which enable us to provide low fares to millions despite the rising cost of living.” 

Ryanair, Europe’s largest airline, also sounded positive. Chief executive Michael O’Leary told the Reuters news agency that bookings for fall and Christmas were ahead of pre-pandemic levels.  

“At the moment they are surprisingly strong, we thought they would begin to ease off but actually forward bookings into the mid-term and into Christmas are stronger in terms of volume and pricing than they were pre-COVID,” O’Leary was quoted as saying in the interview on October 13, 2022.  

O’Leary added that he believed travel demand was being supported thanks to people having saved up money during the pandemic. He predicted that disposable incomes would be hit later into the European winter, but that people would trade down to lower cost airlines.  

IAG will publish full third-quarter results on October 28, 2022, while easyJet will report its full-year results on November 29, 2022.   

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