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Hazards of a Turbulent Pandemic on Aviation

Updated: Sep 10


The Aisle Rover team deep dives to realize the impact of COVID-19 to the Global Aviation Industry.



COVID 19 got the World businesses to an astounding halt. Some businesses perished while for a few it was an awkward pause. The Aviation industry has been one such large victim of the pandemic.

The pandemic has taught each one of us to adapt and make the most of the opportunities that we are presented with. Aviation industry is no different and we are confident that the “New Normal in Travel” will open doors to boundless possibilities and solutions.

The COVID-19 pandemic has made a significant impact on the aviation and the entire travel industry. This is mainly due to travel restrictions and a slump in demand among travellers due to safety reasons.


Airlines

Airlines around the world had to ground their entire fleet as countries closed their borders for foreign entrants to contain the spread of the disease. This dried up airline revenues and forced many airlines to initiate pay cuts, lay off employees or file for bankruptcy. Some airlines also attempted to avoid refunding cancelled trips in order to diminish their losses which added to the woes of travellers who are also facing cash crunch due to job losses. According to experts this ensuing crisis is the worst ever encountered in the history of the aviation industry.


Aircraft manufacturers

Aircraft manufacturers too could not escape the wrath of the pandemic. As demand for air travel plummeted, many airlines deferred their pre-placed orders or opted for a delayed delivery, where possible. This had a direct impact on the forecasted cash flows with manufacturers and in turn triggered a manpower reduction.

The resale values of aircrafts fell and leasing companies had to lower their rates to attract potential clients.


Aviation Insurers

As aviation insurers watch the events unfold, their concern on repayment grew with every day of the pandemic. According to a survey of insurers, the aviation sector carries the biggest risk of corporate default due to the pandemic. Aviation was amongst one of the primary sectors that concerned them the most. The impact of pandemic related insurance claims will be known only later this year or the year after as businesses struggle to get back on their feet.


Cargo

As passenger flights were cancelled, many airlines resorted to their next revenue generating arm, Cargo. Airlines converted their passenger aircrafts temporarily into Cargo planes. This was done by either making temporary modifications to the aircraft main deck/cabin by removing the seats entirely or by just covering the onboard electronics and seats with a protective film and fastening the cargo directly to the seats. This enabled the carriage of Protective equipment, ventilators and other medical supplies around the world. What was also significant was a surge in the freight rates which had an impact on the bill books of the consignors.

Restart..

As all aviation governing bodies geared up for the restarting of the aviation sector through “Air Bubbles”, “Travel Corridor”, “Frictionless travel” a joint publication with Airports Council International (ACI) and IATA released ‘Safely Restarting Aviation – ACI and IATA joint Approach’, developing this from the previous publication from IATA “Restarting aviation following COVID-19”. This considered medical evidence and multi-layered approaches to support the restart of operations. Suggestions included:

Temperature and symptom screening

Use of masks and PPE (Personal Protective Equipment)

Physical distancing

Cleaning and disinfecting infrastructure

COVID-19 testing and antibody testing

Immunity passports

Measures to assist contact tracing

As well as measures related to pilot and crew members and their layover experience.


The pandemic has taught each one of us to adapt and make the most of the opportunities that we are presented with. Aviation industry is no different and we are confident that the “New Normal in Travel” will open doors to boundless possibilities and solutions.

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