The Global Aviation Industry is in for a rough ride in the coming months. Smart business strategies and governmental bailouts are needed to prevent a bloodbath in a sector that depends on passenger perceptions of availability and safety.
The COVID-19 Pandemic has wreaked havoc in the global economy, and this is especially apparent in the Global Travel and Tourism Industry where the closure of borders and shutting down of air travel and resultant lack in tourist activity has been disruptive and depressed demand. As nations first scrambled to ban international flights in the immediate aftermath of the COVID induced lockdowns, this sector went into a tailspin and with minimal pickup so far, the future is bleak.
Watch: The Coronavirus-induced Airline crisis
A recent news report makes it clear that Air Travel is not expected to recover until 2024, which only serves to highlight the challenges facing this industry. Moreover, even the handful of countries, such as Greece, which have opened up to tourists, are doing so with abundant caution and with so many restrictions that the uptake is limited. Furthermore, tourists anticipating a return to normal would be disappointed and feel impinged upon by the multi-faceted tests and paperwork that would mar an otherwise enjoyable vacation.
How Passenger Psychology over Contracting COVID Can Ground the Airline Sector
Adding to the beleaguered sector’s woes, major airlines such as Air Canada have delayed or even cancelled their orders for aircraft from leading manufacturers such as Boeing and Airbus. Even the premium airline, Emirates, known for its Gung-ho attitude to expansion and aggressive business tactics has found that in a recent flight in Airbus 380, nearly 10% of the passengers subsequently tested positive for COVID-19. If nothing else, such fears of contagion would deter prospective passengers in the future.
Watch: Airlines take steps to make flying safer amid the pandemic
On the subject of the psychological impacts on passengers, and how such news can have a detrimental affect on the Airline industry, there have been a slew of reports which indicate that Airlines are likely to leave the Middle Seats empty in order to reassure passengers about their safety. However, if the Middle Seats are left vacant, then it isn’t clear how airlines are expected to make a decent profit on a per flight basis. Added to these issues are the costs and inconveniences of the laborious tests and checks at departure and arrival.
More airlines to shutdown in the coming months
What then, is likely to happen to the Global Airline and Tourism industry? Are we going to have a repeat of the slump that occurred in the aftermath of the 9/11 attacks, when major airlines folded and filed for Chapter 11 bankruptcy? More so, are we going to end up with heavily indebted airlines and their high flying owners such as Richard Branson of Virgin become like India’s Vijay Mallaya (another former airline tycoon known for his flamboyance) and more Kingfishers in a sea of dwindling catch?You will find more infographics at Statista
How Smart Business Strategies Can Help, While Still Prioritising Passenger Safety
Such dire prognoses are not inevitable, as a combination of governmental bailouts and smart business strategies can help avoid these most dire of scenarios. For instance, airlines can fly to new, little known tourist spots in Africa and Latin America where the COVID-19 outbreak is limited. This would help the airlines, as well as the destinations in developing and reinventing themselves. Moreover, by focusing on first and business class segments, the airlines can benefit from increased prices. On the other end, they can entice coach class passengers to premium classes through smart pricing.
A combination of governmental bailouts and smart business strategies can help avoid the unprecedented bloodbath in aviation.
While the skies are turbulent and the terrain for landing rough, the global airline industry can weather the storm. However, incidents such as the crash of the Air India Express flight in Kozhikode over the weekend should serve as a wakeup call that the safety and security of passengers are paramount. It will take visionaries to steer Global Airlines in these difficult and challenging times, and avoid aircraft fleets ending up as worthless scrap.