Atlantic Recovery
Redux — September 2021

While domestic markets have largely re-opened in the US and, to a lesser extent, Europe, the North Atlantic market remains very restricted. Occasionally It appears that progress towards normalisation is being made, then there are set-backs, the latest being the removal of the US from the EU’s “whitelist” meaning new quarantine rules. The Atlantic re-opening is going to be more complex for airlines than the domestic market restarts; some of the key issues are condensed in some comments on three key graphs.

Firstly, it is worth reemphasising the fact that long-haul, especially the North Atlantic, is much more important financially for network carriers than the passenger volumes might suggest. The US Legacies — United, Delta and American — are usually regarded as being primarily domestic operators, particularly by US-based analysts, 88% of their passenger volume is domestic but this segment represents only 68% of their revenues and profits. The North Atlantic accounted pre-pandemic for 18% of operating profits. The reliance on the North Atlantic is even greater for the European carriers who, unfortunately, are not required to reveal the regional breakdown of revenue or profits.