The coronavirus pandemic and necessary travel restrictions has had a tremendous impact on the airline and aviation industry. To give you a snapshot, Virgin Australia grounded all international flights and slashed domestic capacity by 50 per cent; EasyJet has temporarily grounded their entire fleet; British Airways suspended 96 per cent of their scheduled flights; German airline Lufthansa has grounded 700 of their 763 aircraft; Cathay Pacific has reduced capacity by 97 per cent across their flights; while Ryanair is operating at 1% of their normal capacity – and that is just to name a few.
So right now the big question is, what will travel and flying look like after the COVID-19? Some experts believe the travel industry will have no problems bouncing back but according to CAPA – the Centre for Aviation – there is ‘no more normal’.
After analysing the impact on the aviation sector, CAPA has acknowledged the crisis to be far worse than any they have faced before, saying COVID-19 has the ‘dimensions of a world war.’ Even after recovery – which will take longer due to the forecasted global recession in 2020/21 – ‘normal’ will not be the same as before, here’s why:
1. The impact on revenue is far greater than ever before
In the beginning, COVID-19 was expected to be like a previous crisis including 9/11 or SARS which both resulted in typical loss of traffic and revenue before returning to normal. However, the revenue reduction faced by airlines this year far exceeds the impact of the previous crisis and is not something that will easily be resolved without significant government help.
The International Air Transport Association (IATA) are estimating the global airline industry could lose USD$252 million in 2020 – 30 per cent of 2020 forecast revenue.
Making matters worse, is the forecast global recession which will mean the road to recovery will take a lot longer than hoped. IATA has predicted that the industry as a whole will burn through $61 billion of their cash reserves during the second quarter of the year. Airlines with insufficient access to liquidity will struggle to survive in a global recession.
2. Loss in confidence
With travel being one of the biggest factors contributing to the spread of the virus globally, it is expected that people will lose confidence in air travel and the idea of being in close quarters with others. There will be a residual unease about travel due to a fear of catching an illness.
There will be increasing pressure for airlines to protect and reassure passengers, perhaps starting with making hand sanitiser easily accessible throughout the airports and boarding gates. David Powell, IATA medical advisor, suggests there will also need to be reassurance about air filtering and general cleanliness in aircraft.
3. The impact of technology on business
The coronavirus has forced 2020 to be a year of change particularly to the way we run business and live our lives. With an increasing number of people working from home, technology has provided substitutes for face-to-face meetings and in some cases, even replaced the need to travel.
While we adapt to this new way of living, technologies and are continually evolving to meet business needs. The impact this will have on travel for business purposes, is currently unknown, but it is certainly suspected to make a dent.
