Covid-19’s Effect on the Airline Industry

We thought that it was bad when the SARS outbreak hit 29 countries in 2002, infecting 8000 with 800 deaths. That was until Covid-19 came along.

This new pandemic has shocked so many people. Up to date , the disease has spread to 212 countries and territories, infecting more than 3.5 million people and taken away about 248 thousand precious lives!

The airlines industry has also been a casualty in this pandemic, as people stopped travelling. According to IATA (International Air Transport Association), the Malaysian aviation industry could see a drop in demand of about 40 % involving around 25 million passengers within this year.

Along with many other bodies, IATA has urged the government to provide financial assistance to the airlines to keep them afloat. The Malaysian airline industry faces an estimated RM15 billion loss in revenue and affecting around 170,000 jobs. I too, have been a casualty.

In this global age, airlines have been the core of the tourism industry as social mobility and more disposable income meant that more people are able to travel anywhere they wish until Covid-19 struck.

For many countries, the national airlines generate a very high percentage of the country’s revenue, and thus – they have requested financial assistance as part of the economic recovery. Indeed, Air France-KLM has just secured at least USD9.7 billion in Government aid as this Franco-Dutch airline struggles to stay afloat amidst the Covid-19 pandemic

Many countries in the world are expected to bailout the major carriers. To date, there have been reports of at least 18 airlines having grounded their planes, affecting so very many jobs of the pilots, cabin crew and supporting staff.

It was reported that there are currently 60 new aircraft (including 18 Airbus A350 and the A330/A320 neos planes) stored at Airbus with no buyers in sight due to order cancellations.

Boeing is fairing just as badly and research has estimated that they are cutting 40% of its production. It has been reported that its two largest customers, Emirates and Etihad are cancelling their orders of 150 Boeing 777X’s and 10 Boeing 787’s.

The general forecast for September 2020 is bleak; there will be a minimum of 8,000 grounded planes, and affecting every individual that relies on the aviation industry for their livelihood.

The Pilot Community

There are many pilots who are grounded at the moment, with the exception of the few who operate cargo flights ferrying emergency PPE (personal protective equipment) around.

Those who still have a job, are on unpaid leave, and keep themselves occupied with on-line continuation training. As air transportation is an essential service, certain aircrew need to keep their flying licences current. As such, they are permitted to fly in the flight simulators. They have to follow stringent rules when carrying out these flight checks to renew their licenses.

The Movement Control Order (MCO) in Malaysia is a good time for aircrew to consolidate on their technical knowledge. I keep my time occupied by reviewing the systems of aircraft that I have operated (in fact, I enjoy the very interactive Computer Base Training). There are those who prefer to enrol on academic courses but I prefer to learn about the newer planes and their operation.

Aspiring pilots

Many aspiring pilots and flying graduates are worried about their employability, especially after having invested heavily in their flight training.

The flying career is a very volatile one. Its demand is cyclical – when times are good, airlines with contracts in hand, will approach flying schools to look for pilots but when times are bad, things can get very tough for the aspiring pilot.

The 2019 Boeing forecast of around 800,000 pilot positions for the next 40 years did not foresee the corona virus pandemic. The future is not as bleak as all that, according to some experts. The aviation industry will recover and there are at least 3 likely scenarios on the recovery to almost normalcy.

Firstly, there is a medium chance that this pandemic may last from 6 to 9 months. Here, passenger’s confidence may return fairly quickly with short haul air travel returning followed by long haul flights.

However, in a more conservative scenario, there is a higher chance that the recovery may take up to 12 to 18 months. Here, consumer confidence may take time to return which could result in economic recession.

The third scenario may be a medium chance that within the next 12 months, the pandemic may stabilise but the lockdown polices could be imposed for a longer period where travel is discouraged and air travel reduced. There will be a deeper economic recession with more severe and lasting disruption to the air travel industry.

In reality, it is difficult to forecast which scenario is likely to turn out. Meanwhile I hope you all will think positively and hope for the best.

Post Covid-19

As the forecast above suggests (and depending on which scenario one falls in the recovery period), passengers’ confidence to return to air travel may be very gradual.

According to the Director General of IATA, Juniac, ‘cheap travel is over’ due to the imposition of social distancing. As such, there may be a need to reconfigure airplane seating in the form of reducing the capacity by about 30 percent for short to medium haul planes.

One suggestion to overcome the above policy would be for airlines to require all passengers to have special travel attire like a PPE (Personal Protective Equipment) with masks and rubber gloves instead of imposing the social distancing restriction.

The first airline that comes up with a free and effective travel attire for its passengers could probably be the one that would survive in the end especially if it is cheap, attractive and practical.

Worldwide, the loss of passengers’ revenue is USD314 billion and a further USD61 billion is expected by the 2nd quarter of this year. The social distancing policy will definitely impact on the airlines when full flying resumes.

Physical and Mental Health

It is even more important to look after your physical and mental health during lockdown.

As for myself, I’ve incorporated into my daily exercise on the treadmill to keep up with my physical health at home. It enables me to achieve my 10,000 steps consistently.

I multi-task by reviewing interesting flying simulator exercises, browsing through aircraft technical notes and visualising the Mandarin character strokes to improve my language skills.

Hopefully after when all is done and over, I will not regret for not gainfully utilising my time under the restrictive order.

Conclusion

It looks like even if we recover from the Covid-19 pandemic, life will not be the same again. Aviation may face a loss of confidence from passengers over air travel due to the close contact with others.

Yes, health concerns might initially curb travellers’ inclination to fly but it cannot be denied that one must continue to go places, both for business and leisure. Business trips will pick up faster than those going for leisure.

I hope everyone will stay safe at home and wish for the speedy recovery of the Covid-19 pandemic.

Remember, stay at home for those where the lockdown is not lifted yet!

Monday, 04 May 2020 13:05