Undoubtedly, one of the areas that have been hit the worst after the rapid spread of Covid-19 is the aviation industry, which has never experienced such an unprecedented disruption for so little time. Everybody is looking into the Covid-19 crisis and analysing the ongoing impact on the air travel market, in order to understand the effects on the worldwide connectivity and possibly identify some signs of recovery. But how long will it take for the air travel to first get back to where it was before the global Coronavirus pandemic is definitely unsure and causes a lot of uncertainty for the whole travel ecosystem.
Using the latest travel data, presented by OAG, the world’s leading provider of digital flight information, this article will take a deeper look into the effect of the current Covid-19 epidemic on aviation capacity and discuss the changes and consequences for global and regional aviation.
Impact on global & regional aviation
The last two weeks mark major reductions in scheduled flights in most of the countries in the world, and especially across Western Europe. Thousands of passenger aircrafts have been grounded, flight attendants have gone on furlough or have been released, the air space has never been so quiet. According to OAG, the number of scheduled flights has decreased by 48% in the last week of March, compared to the same week last year. Just for one week, there has been a drop of 19% (from 23rd March to 30th March), which surely means that the bottoms of the capacity cuts haven’t been reached yet.
Looking at Europe, which is seriously in the grip of the virus at the moment, flights are down by over 60%, indicating nearly 6 million fewer seats. Both South Asia and the Southwest Pacific have also seen the biggest impacts with 64% and 61% reductions for the week of 30th March. Compared to other major markets, the US market has been slower to reduce flying and scheduled flights for the week are 23% below a year ago. In many of these countries, airlines are going to announce further capacity cuts, which is why these numbers are going to change for sure.
Serious implications for airlines
Just for the top 20 biggest carriers in the world, the combined capacity reduction is a total of 13 million fewer seats. To serve as an example, Ryanair alone is now operating 3 million fewer seats than they did this time last year, and Lufthansa has 1.5 million fewer passengers year on year. The biggest concern right now is that for many airlines these serious implications won’t be survivable. Many of the airlines, especially smaller ones, who operate very niche routes and are completely dependent on governmental funds, will be in need of help or assistance. The latest reports from OAG suggest that the average amount of cash in airlines who haven’t been able to achieve critical mass will keep them surviving for just another two months. Unless governments and the industry take some coordinated measures to avoid winding up whole businesses, many airlines will face an inevitable bankruptcy.
Signs of recovery from China
On a global scale, the dependence on China for international capacity is huge. The world is waiting for China to begin to recover to show us the optimism in the aviation community. While we haven’t reached the worst-case scenario for both airlines and the whole industry itself, there are tentative signs of recovery in China’s domestic market with frequency and capacity starting to come back. From a dramatic drop in scheduled flights of -70% in the week from the 17th February, there has been a significant indication that things will get better – capacity in China is now down by 44% (from 30th March). Potentially, the domestic market recovery will happen first, followed by internal growth but over what time period is yet unknown.
Looking back at the history
There is definitely no comparable situation that has paralyzed the air space so drastically. The aviation industry has never experienced a drop in a capacity like this before and this is making it rather difficult to use predictive approaches and draw conclusions about the future outcome of the crisis. However, if you look at the effect that the September 11 attacks had on the air travel back then, it took almost 3 years for the industry to recover fully. Having in mind that the Covid-19 pandemic has a much broader impact on nearly every aspect of the global economy, it could take much more time for the air travel to reach its previous levels. But the real question is: How long will it take for the customer confidence to come back?
Will it get back to normal?
Many experts think that passenger demand will bounce back right after the lockdown is lifted. But in reality, it’s too early to predict how fast the recovery will happen given the fact that different regions and countries are in different stages of the disease’s spread. There are still many uncertainties about how far frequency and capacity will fall and what the likely duration of this event will be.
But one thing is going to happen without any doubt – the customer behaviour will definitely shift. As the fear slowly changes our psychology, more and more Western passengers will consider the “Asian example” and start to implement face masks, gloves and hand sanitizers into their air travel routines. And who knows, wearing protection might even become the next air travel rule.
The aviation industry will suffer for several years to come but will eventually adapt, as it always does.
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