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ACMI Summer Overview – Europe

While the ACMI market has been turbulent since the pandemic, 2022 stands out as a year laden with challenges and opportunities. In this article, our Director of Leasing delves into the ACMI summer trends in Europe.

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Dave Williams

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While the ACMI market has been turbulent since the pandemic, 2022 stands out as a year laden with challenges and opportunities.

The year started with Omicron dulling any prospect of normality as rapidly-changing travel restrictions caused havoc to a period usually active with contract finalisations for summer capacity.

Shortly after, Russia began its war in Ukraine, which led European carriers to approach summer planning with further hesitation. The summer ACMI outlook seemed bleak due to the conflict combined with rising fuel prices.

However, the market sprang to life unexpectedly when the IATA summer season started at the end of March. Throughout April, consumer confidence returned and grew exponentially across Europe and North America.

Renewed confidence met with pent-up consumer demand, causing a highly-active summer over and above what many were anticipating. However, a handful of carriers foresaw the surge in demand and secured ACMI capacity well in advance of summer 2022. These carriers were able to capitalise on the heightened activity and organise damp leases so they could utilise in-house crews to operate their flights. 

While some airlines could organise ACMI capacity in advance to cater for the increased demand, many still relied on 1-2 month rolling ACMI contracts throughout April. Thankfully, ACMI suppliers remained flexible until mid-May. 

However, by June, the European aviation market was in chaos. Unforeseen passenger demand combined with deferred aircraft maintenance schedules, industry-spanning resourcing issues, and reduced ACMI capacity.

The challenges continued into July as demand continued to build. Making matters worse, some ACMI suppliers faced delivery and resourcing problems themselves, further exacerbating capacity issues.

By August, airports had begun implementing significant slot restrictions as they, too, struggled with resourcing problems. These slot restrictions forced airlines to cancel flights en masse across Europe, constricting the increased passenger demand experienced up until then. 

Late August and September saw a complete turnaround. Fewer passengers were travelling, and the ACMI market became saturated with over-supply.

Overall, 2022 was entirely unique. The market showed no seasonal patterns consistent with pre-pandemic years nor the years that followed. Typically, Q3 is the strongest period for European travel, with demand ramping up from early Q2. However, 2022 started dormant, leapt into life in Q2 and flattened completely in Q3.

For most, it was a year of challenges. Airlines, airports and border agencies held back preparations for scaling resources in response to lagging passenger confidence felt at the start of the year. As a result, staffing issues were felt throughout the industry when the summer rush began.

While many were dealing with staff shortages, the conflict in Ukraine impacted supply chains knocking on the delivery of new and aftermarket aircraft assets. In addition, many European aviation authorities struggled to deal with the influx of new aircraft registrations, further bottlenecking the much-needed capacity.

Amidst the chaos, ACC Aviation’s leasing teams have worked tirelessly with airlines and ACMI suppliers across the continent, sourcing ACMI capacity from the start of the year. 

Dave Williams, ACC Aviation, Director of Leasing commented, “Demand came from all types of airline customers – scheduled, low-cost, charter airlines, etc. We even saw requests from ACMI suppliers as they struggled with aircraft deliveries and needed support to cover pre-contracted flights.”

“Throughout June and July, with available narrowbody capacity limited or non-existent, we saw airlines utilise widebody units on an ACMI basis to cover routes.”

Contact ACC

In 2022, despite the challenges, ACC arranged over 41,000 block hours on behalf of airline clients. Choosing a provider with proven expertise is critical whether you’re considering a wet or dry lease.

Since 2002, ACC Aviation has delivered market-leading leasing solutions to the aviation industry. The peerless service and up-to-date market intelligence have made the firm one of the fastest-growing and most respected aviation service providers.

 

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