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5 NEWS 6.1.2022 2021 was the year aviation hoped to get back on its feet after the cata- strophic pandemic impacts of 2020. European aviation started 2021 in waiting mode as countries sought to roll out vaccines. Summer 2021 delivered a better than expected recovery, and despite a worsen- ing pandemic situation once more, as first Delta then Omicron have proven successful at evading vac- cines, the sector is well placed to re- cover fairly swiftly to close to 2019 levels if confidence returns. However, while the partial recov- ery has extended a lifeline to air- lines, airports, manufacturers and everyone connected to aviation, 2022 will prove crucial if the sector is to regain profitability – and make progress on sustainability. 2021 saw widespread agreement on core actions that need to be tak- en – yet tangible progress still lags behind. Traffic in 2021 began with Janu- ary recording a highly depressed -64% of 2019 flight levels, 9,241 average daily flights, but closed the year with December traffic at -22% with 20,028 average daily flights. Cumulatively, the year saw total traffic at -44% of 2019 levels, a total of 6.2 million flights oper- ated in 2021. at was better than 2020's 5.0 million flights, but still a long way from 2019's 11.1 million flights. 2020 and 2021 losses together make a total of 11.0 million fewer flights since the start of the pandemic. In January to April 2021, little progress was made as restrictions remained in place and countries struggled to make vaccinations widely available. Traffic remained stuck between -62% and -66% of 2019 levels. However, the swift pickup of vac- cination rates across larger popu- lations by May 2021, and the intro- duction of the EU Digital COVID Certificate in June, transformed the situation, restoring confidence at country and passenger level. Travel restrictions in participating coun- trie and beyond were softening or lifted, with a particularly strong recovery in intra-European travel (just -33% over June-September), although long-haul traffic flows and restrictions remained in place. After a 2020 of lockdowns and very limited travelling, as the 2021 summer season arrived, holiday destinations were quickly in high demand. Traffic progressively increased through June to August, peaking on 27 August with 26,773 flights (-28% of 2019's peak, and all-time network record, of 37,228 flights on 28.06.19). Post-summer, and despite a steady worsening of the pandemic once more as autumn turned into winter, the European aviation network has remained durable at between -20% and -25% of 2019 levels, unlike in 2020 when the summer bounce was followed by a precipitous drop to the year-end as new State restric- tions were applied across the net- work. Country focus Traffic was down in all European countries compared to 2019. For the second year running, the UK topped the list in terms of flights lost (-1.3 million flights, -62%), followed at quite some distance by Germany (-1.0 million flights, -50%), Spain (-742,000 flights, -44%), then France (-654,000 flights, -42%) and Italy (-616,000, -47%). However, in terms of the highest percentage of traffic loss, the UK, Finland and Ireland all saw -62% lower traffic in 2021. Malta lost 26,000 flights (-44%) compared to 2019. Geographically, the four worst af- fected countries – Ireland, Finland, UK and Sweden – with Denmark 7th – are all at the northern end of Europe, with Scandinavia (except Norway) most affected – Finland (-62%, -137,000 flights), Sweden (-56%, -228,000 flights) and Den- mark (-55%, -187,000 flights), with very weak intra-Scandinavian traf- fic. Least affected, on the other hand, are the countries towards the south and east of Europe. Albania, down just 8% (-2,000 flights), leads the recovery, with four more countries (Bosnia-Herzegovina, Armenia, Ukraine and Greece) all down un- der 30%. • Greater predictability and returning travel have helped airlines and airports stay afloat, without however bringing balance sheets back into the black. Airline losses for 2021 stood at €18.5 bn with 1.4 to 1.5 bn fewer passengers, even if this was not as heavy as 2020's disastrous losses (€22.2bn and €1.7 bn). Load factors (around 50-60%) are weighing on profitability, with the major airline groups operating 30-64% fewer flights. • Aviation showed its resilience in 2021 to a crisis that had paralysed economies in 2020. Despite rising infection levels and new COVID variants, European societies have learned to manage the crisis, and aviation has been able to provide basic connectivity, even if, at around 55%, flight choice within Europe lags well behind traffic levels. • While all aviation actors have embraced the need to build back more sustainably, the pace of change – particularly in making Sustainable Aviation Fuels more available – has not yet started to accelerate. Investment in new technological solutions must continue. • Omicron triggered travel restrictions that constrained flights in the first half of December to 75%, but eased in the second half (81%) owing to the holiday period. The situation for January is less clear however, and some major airlines are already displaying caution, cutting capacity by up to 30% in January. • 2022 traffic is expected to recover to 70- 90% of 2019 levels – even though right now, the evolving pandemic has seen traffic fall away from our optimistic forecast to converge increasingly on our baseline forecast • 2021 saw a partial but sustained traffic recovery in Europe, starting with -64% in January vs 2019 levels, and ending it at -22% of 2019 levels in December. Mass vaccinations and the EU Digital COVID certificate helped deliver a solid summer recovery, and traffic has remained relatively stable at over 70% since the summer. However, total 2021 traffic was -44% of 2019 levels, 4.9 million flights fewer than 2019 – and not substantially better than 2020 (6.1 million fewer). • The impacts of reduced traffic continued to be unevenly shared, with the five worst-impacted countries all in the north (-55% to -62% traffic), while the five least- impacted were all in the south (-8% to -27%). Countries - Traffic Loss (2021 vs .2019) Difference in flights (dep/arr -in '000 and %) Charting the European aviation recovery Aviation Intelligence Unit Think Paper #15 – 1 January 2022 Focus on States Traffic was down in all States compared to 2019 as shown in Figures 2 and 3. For the second year running, the UK tops the list in terms of flights lost (-1.3 million flights, -62%), followed at quite some distance by Germany (-1.0 million flights, -50%), Spain (-742,000 flights, -44%), then France (-654,000 flights, -42%) and Italy (-616,000, -47%). However, in terms of the highest percentage of traffic loss, the UK, Finland and Ireland all saw -62% lower traffic in 2021. In Figure 4A, we see very different rates of recovery with a clear divide between northern and southern Europe. In % terms (compared to 2019) the most affected State was Ireland (-62%, -183,000 flights) due to its critical reliance on flights to/from the UK (40% of its flights in 2019). Geographically, the four worst affected countries – Ireland, Finland, UK and Sweden – with Denmark 7 th – are all at the northern end of Europe, with Scandinavia (except Norway) most affected – Finland (-62%, -137,000 flights), Sweden (-56%, -228,000 flights) and Denmark (-55%, -187,000 flights), with very weak intra-Scandinavian traffic. Least affected, on the other hand, are the countries towards the south and east of Europe. Albania, down just 8% (-2,000 flights), leads the recovery, with four more countries (Bosnia-Herzegovina, Armenia, Ukraine and Greece) all down under 30%. At the peak of the summer season, some countries came very close to their 2019 levels, in particular Greece, where flight levels reached 94% of pre-pandemic traffic during August. FIGURE 2: TRAFFIC LOSS ACROSS STATES, 2021 vs. 2019 FIGURE 3: TOTAL TRAFFIC 2021 ACROSS STATES -2 -4 -6 -48 -125 -311 -7 -31 -29 -40 -186 -69 -29 -130 -11 -18 -37 -654 -174 -266 -742 -26 -190 -616 -30 -22 -15 -228 -98 -1,019 -17 -185 -70 -97 -187 -48 -95 -228 -1,318 -137 -183 -8% -20% -22% -26% -27% -30% -32% -33% -34% -35% -36% -37% -38% -38% -39% -39% -40% -42% -43% -44% -44% -44% -46% -47% -47% -47% -47% -47% -48% -50% -52% -52% -54% -55% -55% -55% -55% -56% -62% -62% -62% -100% -80% -60% -40% -20% 0% Albania Bosnia-Herzegovina Armenia Ukraine Greece Turkey North Macedonia Serbia & Montenegro Cyprus Croatia Norway Romania Luxembourg Belgium Moldova Georgia Bulgaria France Portugal Netherlands Spain Malta Poland Italy Lithuania Estonia Slovenia Switzerland Morocco Germany Slovakia Austria Hungary Israel Denmark Latvia Czech Republic Sweden United Kingdom Finland Ireland States - Traffic Loss (2021 vs .2019) Difference in flights (dep/arr - in '000 and %) 2022 outlook

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