Bumpy landing forecast for airline industry

Today’s move from Tui, Europe’s largest travel company, to raise up to E400m to shore up its business is just the latest sign of the havoc wrought upon an industry devastated by the pandemic. An uneven vaccination programme and an increase in infections and lockdowns have diluted hopes for the 2021 European summer season, fuelling pessimism among investors, who sent Tui’s shares down in morning trading more than 7% before they recovered to close 2% lower. The company has already gone through a series of refinancing deals and reported a E3.2b loss in the year to the end of September. Governments around the world meanwhile are striving to inject hope into the airline industry. In the UK, government proposals to allow travel to certain countries from May 17 were criticised for the caveat that travellers must undergo costly PCR Covid tests. The plans follow another week of uncertainty for a sector that lost $118.5b in 2020, the worst year in aviation history, with downgraded passenger forecasts from Ryanair and new state aid for Air France/KLM. A handful of entrepreneurs such as Nino Singh Judge, a former motorsport businessman who calls himself the “Sikh Michael O’Leary” have found inspiration amid the chaos, founding new airlines that can react quickly to new conditions rather than trying to adapt business models designed for very different times. <br/>