Aviation

The project business of decorative ceramics and dinnerware started off 2022 with a strong performance in the wake of the pandemic, with increased private consumption also making for a positive trend in incoming orders. The upward trajectory continued into the next quarter bringing sales for the first six months 29 percent higher year on year.

Technical ceramics also managed to increase total revenue by around 13 percent in the first six months of 2022 year on year, regaining its pre-pandemic level. The situation among automotive component suppliers could have a negative impact on sales in some segments down the line.

Sanitary ceramics enjoyed a steady intake of orders, as it had already in 2021 and during much of the pandemic.

The tile industry continued its upward trajectory of 2021, with total revenue growing further and orders also pointing up and expected to remain positive for the rest of the year.

All in all, the ceramics industry recorded rising sales and incoming orders in the first six months of 2022, continuing its recovery from the first year of the pandemic.

The current volatility caused by Putin’s attack on Ukraine, sanctions and the current logistics problems in Chinese ports and elsewhere may well put an end to the current upwind in the industry. The upward trend among private consumers could well flatten out in the autumn months with possible new developments in the pandemic and rising inflation, which could also deflate project business for dinnerware in particular. Postponed and cancelled construction projects have a direct impact on sanitary ceramics. The industry is thus expected to grow at a slower pace over the next few months.

Furthermore, the energy-intensive ceramics industry is greatly affected by the energy crisis and the associated rise in gas prices which translates into a competitive disadvantage.

In addition, the carbon pricing scheme introduced in Germany for small plants is distorting competition, particularly in the fine ceramics industry as these are classified as operators of small plants not covered by the EU ETS. Policymakers have thus created substantial competitive disadvantages for German ceramic companies.

Contact: Jenny Tanner / Phone: +49 9287 808 25 / Mail: tanner@keramverband.de

Aviation

The situation of the commercial German aviation sector is mixed in the second half of 2022. While companies that publish their figures are reporting improved earnings, travel in and through Germany is lagging behind the overall trend in Europe. After a strong boom in 2021, air freight joined the general economic trend and was down on the previous year.

Trend in air travel: In summer 2022, air travel stabilised considerably in Europe. The number of seats available to, from and within Europe (EU / EEA / UK) was 85 percent as high as in the pre-crisis summer of 2019. Excluding travel to, from and within Germany, the recovery was at 87 percent; in travel to, from and within Germany, seats available were at 75 percent their pre-crisis level. Recovery is set to

continue over the winter 2022/2023. The scheduled seats available in the European countries referenced above corresponds to 94 percent of the level in the pre-crisis winter (2018/2019) and in Germany, the volume is back to 76 percent of its pre-crisis level.

The trend in passenger numbers is following the same path as available seats. In September, overall passenger demand to, from and within Germany was at 64 percent that of 2019.

There are several reasons behind this development:

▪ European point-to-point carriers have recovered well in Europe but have, at the same time, shifted extensive capacities from Germany to other European countries. The airports of Berlin,

Düsseldorf, Stuttgart and Frankfurt are particularly affected by this trend. Carriers that are moving their flights away from German cities are doing to because the ratio between demand, willingness to pay and costs for charges and fees in Germany no longer adds up.

▪ Local air travel within Germany (flights that both start and end in Germany) contracted: the volume of air travel is at around 25 percent of its pre-crisis level. The use of alternative ground transport (car and rail) and digital methods of communication have risen instead. The frequency density of domestic flights within Germany has fallen steeply, also because of the withdrawal of carriers.

▪ Air travel is strongly influenced by the many congresses and trade fairs held in Germany, many of which did not take place on account of Covid.

▪ Travel to and from Asia had still not recovered by the summer.

Tourist travel, in contrast, trended positively and almost regained its pre-crisis level. The portion of domestic air travel that mainly transports transfer passengers to the major German hubs has largely followed the upward trajectory of intercontinental air travel. The hubs in Frankfurt and Munich were able to benefit from their status as collection points for intercontinental flights, with Frankfurt outpacing the overall average for Germany in particular.

The booming demand in air freight has tailed off. Following a very strong performance in 2021, demand was well below the previous year (accumulated: down four to five percent / 6.4 percent below the very weak pre-crisis year 2019) and further decline is on the horizon with supply chain problems, risk of war, energy shortage, inflation and a looming recession all curbing demand.

The earnings of the listed corporations Lufthansa and Fraport have recovered. Lufthansa published group earnings of 0.5 billion euros (up 2.4 billion euros year on year) and, above all, a strong summer with rising revenues per passenger. Fraport also reported EBIT of 0.5 billion euros (up 186 million euros) for the first three quarters of 2022. Both groups have managed to leave the losses caused by the pandemic behind them.

Contact: Norbert Lübben / Phone: +49 30 5200 771 30 / Mail: Norbert.Luebben@bdl.aero