COVID-19 Is Over: Reliving March 2020-2021 Part 8

COVID-19 Is Over: Reliving March 2020-2021 Part 8

The World Health Organization (WHO) stated that COVID-19 is no longer a global health emergency. Let’s take a look back at how the pandemic affected the aviation industry.

In March 2021, AviationSource released a book called “Aviation & COVID-19”, where we documented what the effect of the pandemic was on each individual segue of aviation.

The book particularly looked at the time period of March 2020-2021.

Over the course of today, each Chapter from the book will be released for our audience to read for free.

Without further ado, let’s get into it!

Aviation & COVID-19 Chapter 8: The Recovery & Concluding Remarks…

COVID-19 Is Over: Reliving March 2020-2021 Part 1

The chapter on recovery is something that will be considered short, especially with the continued alterations of when recovery will actually take place.

July 2020 saw the International Air Transport Association announce that global passenger traffic will not “return to pre-COVID-19 levels until 2024”, with “the recovery in short-haul travel… expected to happen faster than for long-haul travel” (IATA, 2020).

However, the good news at the time of writing is that IATA itself believes that recovery is expected “to start by mid-year 2021”, with “leisure travelers – whether they are going to the beach or visiting friends or relatives” leading that recovery (Russell, 2021).

It is understood that, as stated in the consumer confidence chapter that “business travel is expected to lag by as much as 18 months”, which will be a given on the basis of businesses globally having to cut costs of which business traveling will be hard hit for the time being.

The IATA Director-General Alexandre de Juniac believes that the vaccination roll-out will encourage a much-needed Summer of revenue being secured (ibid):

“When we look at the rollout of the vaccination policy in many developed countries, I think it’s compatible with the reopening plan that would allow the summer season to be, at least, a decent season for air transport,”

That being said, as will be stated in the conclusion of this book, there are other areas of the industry that have not been covered in this book that will face a considerable lag across the board.

With there currently being “fewer planes sold, fewer flying hours and older aircraft retiring early as fleets are pruned”, The Economist (2021) dubs this as a “triple blow” for the engineering industry as keeping such aircraft in the air supply most of the profits through engine servicing deals, etc.

With planes being retired earlier, that is a substantial business that the likes of General Electric, Rolls Royce, and Pratt & Whitney are missing out on.

Engine manufacturers are scrambling to secure business which will help assist and reduce losses made over the next few years.

Rolls Royce is a big example of this, having recently “extended an exclusive deal” with Airbus “to provide engines for the A350-900 to 2030”, fending off any chance of competitive battles for the next decade at least (Hepher & Young, 2021).

Debts are at an all-time high within the industry and have even encouraged two of the largest leasing giants in the world, GECAS & AerCap, to merge via a $30 billion deal to bring down debt and consolidate the over 3,000 aircraft it has in its backlog (Josephs, 2021).

The timeline for recovery, even with roadmaps thought through by governments, is still subject to change. So, it will be easy to assume that any roadmap you hear will not be accurate.

As governments open up, there is a lot being staked on the vaccine being effective and keeping case numbers down whilst all parts of global economies open up, irrespective of the odds of catching the virus in an airplane.

It is about those on the ground. If the conditions on the ground behave, then it can make way for a full-scale recovery which will see far quicker rates than seen in the financial crash and after 9/11.

That being said, the COVID-19 pandemic has, of course, produced “the worst financial results in aviation history,” with early 2021 projections being listed as $15.8 billion across the industry (EUROCONTROL, 2020).

But in order for recovery to work, de Juniac states in the EUROCONTROL article that governments may need to stop playing it safe when it comes to restrictions (ibid):

“To keep COVID-19 outside their countries, many governments have simply closed their borders. Others kept their borders open but imposed a quarantine on travelers. The effect is the same – it halts travel, so we are not making progress in restoring the fundamental right of movement, and the travel and tourism economy is effectively stopped. We must learn to live with this virus. The Stop-Go-Stop approach to lifting and reimposing restrictions does not bring us closer to that, nor will it enable economic recovery.”

With the significant statistic that “airline job supports a further 14 jobs in the wider economy” (ibid), this needs to work properly otherwise, we could see millions, if not tens of millions, of jobs sacrificed as a result of the industry and global governments not doing the right thing.

Recovery could always happen earlier than what is predicted because of such consumer behavior. Whilst confidence may be quite low at the moment, it is rising at a steady rate, as discussed in the Consumer Confidence chapter.

We need to ensure that the number continues to rise at a steady rate, if not faster, in order to make up for the lost time and revenue caused by this pandemic. As de Juniac rightly says (ibid), such experiences, whether in work or at leisure, is not the same as actually being there:

“But, as much as we are connecting through Zoom, Teams, Houseparty, or other technologies, it is not the same as being there. Flying is freedom, and travel is freedom.”

That is what the industry is banking on. For humans to use that pent-up set of emotions and energy, to go free and see the world. It is the passenger that we rely on and will continue to rely on in order to make this industry financially successful.

Concluding Remarks

Where we need to go now…

As mentioned in the previous chapter, we did not go through all aspects of the industry but most. We, of course, missed out on leasing companies, engine manufacturers, supply chains, and much more.

But the fact is that irrespective of whether those areas are covered in this book or not, it is the case that the same outcome is presented as a result.

2020 was an incredibly hard year for the industry, and 2021 offers a glimpse of hope that this is the tail-end of the crisis. Of course, COVID-19 will continue to remain on this planet for many years to come, with the perspective of treating it as a conventional flu.

We have seen millions of jobs lost, not just in the industry but in the global employment arena. People have lost their homes, their lives, and much more. Their true self of identity. That brings us to where we need to go now.

What the world needs to do is utilize aviation. For leisure, business, or just a casual joyride. We need to support this industry like we never have done before. It is, of course, a larger magnitude than the likes of the financial crash and 9/11 in terms of such disruption.

The more we support this industry now, the more people we can put back into employment. As again stated in the previous chapter, every aviation job provides 14 indirect jobs.

That is a significant statistic. If you use the example of the New York Times (Yeginsu, 2021), which stated that four million travel jobs were lost in 2020. That means that 56 million indirect jobs were lost as a result of the surge in unemployment.

Such a figure highlights the sheer importance of this sector, not just economically but socially, culturally, and even to me, personally as someone who has followed this industry over the last half a decade.

This book has looked at the effects the pandemic has had on airlines, airports, consumers, governments, manufacturers, and workers. It has shown that even if we are in a new year, the same problems are there, and if the wrong decisions are made, it could result in even more permanent scarring than there needs to be.

To finish, there is only one keyword that reflects what we should all be doing in 2021 and on the way to recovery:

Support

References for The Whole Book…

  • Blalock et al (2007), The Impact of Post-9/11 Airport Security Measures on the Demand for Air Travel, Cornell University, http://blalock.dyson.cornell.edu/wp/JLE_6301.pdf [Last Accessed 27th February 2021]
  • Blunk et al (2006), Evaluating the Long-run Impacts of the 9/11 Terrorist Attacks on US Domestic Airline Travel, Applied Economics, Vol. 38, No. 4, pp. 363-370
  • Gittell, JH. (2004), The Southwest Airlines Way, Summaries.com, https://d1wqtxts1xzle7.cloudfront.net/39799702/thesouthwestairlinesway.pdf?1446998784=&response- content- disposition=inline%3B+filename%3DThesouthwestair linesway.pdf&Expires=1611095940&Signature=Ckixw bsDhdDcDnIx6iiznxS4RqXd91dnweRn- 4pDjoUx5J92DbmAUrpTi-48f- yt18Ka9cvsrQdJPZ9ojcG4KkIYpGztnRWPi99n2sM- Pxks2dRbRhSVuhyzo5ZewOiD5zRS8u5ENi93Eo7NxTH NSnNFf2w8ArvE~bg7npowPJ~3xNLf6je3PkCp45yQgc ToSYiMQi3KIE3LdnoIvmu7VRedWXzGTpXo4bNc4QT wlc- EKVptna9UK1k5M0cSb7n0AO4wn9xofD~GsuP649Ox PE-NzGDMh2ZWAw5GKuPLci-tcn6PhU0nEJ5yEHPCa9Ohxh2lKvp4bV-f9bVPL-DyMg &Key-Pair-Id=APKAJLOHF5GGSLRBV4ZA [Last Accessed 2nd March 2021]

*The majority of references acquired from Airways Magazine were as a result of the author’s previous employment at the company as Editor-at-Large.

**It is acknowledged that other carriers such as Wizz Air have received relief from the UK government, but the focus is on the long-standing UK-based carriers.

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