By Rafiq Jan
We witnessed far too many planes aloft in the skies than the flocks of birds in the last two decades or so, prompting the manufacturers to burn the midnight oil in meeting the demands of producing planes for airlines, also because of the burgeoning global travel industry.
But then struck the unseen enemy -COVID-19 late last year– bringing tens of thousands aircraft across the globe to a grinding halt, inflicting irreparable damage to the economies around the globe. It left busy skies eerily empty in a ruthless way. The unprecedented financial bleeding continues with uncertainty staring many airlines in the face.
Since the emergence of the dreaded COVID-19, almost all countries across the globe shut down borders and limited domestic travel as a response to the global pandemic. Thus, cancelling almost all flights to contain the spread of the virus has affected the entire airline industry globally.
During the week of April 20, 2020, the number of scheduled flights worldwide decreased by 66 percent in comparison to the same week last year. Yet, with high cross-country variations. In some countries the year-on-year decline in the number of passenger flights reaches over 90 percent. On March 22, 2020, airline capacity in Europe was down by almost 88 percent compared to the same day in 2019. Moreover, in the first half of 2020, Chinese passenger travel is expected to decline by approximately 87 million passengers. Therefore, the aviation industry is anticipated to experience a severe V-shaped decline throughout 2020.
Pleas and Pledges
In response to the economic shut , various governments have promised to bail out premium airlines in different forms.
- The Dutch government has promised $ 4 billion to support KLM
- The French government will support Air France-KLM group with 7 Billion Euros
- The Singapore Airline (SIAL.SI) also expecting relief package of $13 billion from investors
- The US government has pledged to support its Big-three, American Airline, Delta and Southwest, with up to USD 50 Billion
Although, the Airlines reckon the stimulus offered by governments may not come without strings, yet the industry – already reeling from the massive crunch – has no choice but to grab the offers to keep their operations at the subsistence level once the business recovers.
“There are decades where nothing happens; and there are weeks where decades happen”. Vladimir Ilyich Lenin
These words by Soviet Union’s great revolutionary leader ‘Lenin’ almost 100 years ago sound like prophetic for the destruction caused by COVID19. Lenin would have never imagined another universal revolution, mightier than his time, which would jolt the entire globe with an invisible microbe instead of guns and action.
Corona’s effect on airlines dwarfs the 9/11 economic fallout. It also surpassed the toll of SARS pandemic that killed less than a thousand across the continents.
Commercial air transport is at the forefront of COVID-19. No industry has been hit so hard as the air travel and the airplanes. Once roaring and buzzing the skies with their sonic and supersonic speeds, are now unprecedently forced to stay aground due to no demand.
Adequate Storage Dilemma:
There are roughly around 25,000 commercial planes in the world. Covid-19 has forced the airlines to halt almost 90-95% of passenger flight operation.
Haunting pictures of empty airports and grounded airplanes at the peak of COVID-19 pandemic shows the airlines industry at the lowest point since the WW2. More than 20,000 planes are reportedly sitting on ground to find a suitable parking space at the airports worldwide.
The stillness around parked aircraft is sad indeed also for the simple reason that aeroplanes are a marvel of human innovation; they dominate the air while airborne, but now left as the most vulnerable species when on ground. They are alive in air but dead on ground. An airplane is an intricate and extremely complex piece of machine built to meet the highest safety standards. It needs special care and maintenance both during operation as well as on ground. But with the pandemic around, only fewer staff is available, particularly in Europe to take care of the idle aircraft.
Taxiways, maintenance hangars and even runways of airports are transformed into parking lots. Though, still airlines scramble for proper storage facilities to accommodate gigantic fleets of airplanes.
Major airlines are overwhelmed with challenges of how to keep themselves airworthy and ready for operation, once the travelling gets restored. Proper storage/preservation of planes involves heavy cost too. A moot point for owners, stakeholders, and the governments is either to surrender or stay abreast with the developments while keeping the plane flight-ready, no matter what it costs.
Airlines Facing Extinction:
International Air Travel Association “IATA” had already warned in March that if the epidemic continues for few more months and no vaccine is discovered, the loss to aviation industry alone will surpass the figure of US $300 billion. Unfortunately, few vanity airlines already foresee a bleak future and a possible bankruptcy. Governments, more concerned about the health and safety of people against deadly attacks of COVID-19, seem helpless in offering stimulus to airlines. The situation seems dreary at present and if no solution is found by the end of 2020; many premium airlines will go functionally bankrupt .
Air travel business rose exponentially after 9/11 recovery. Growth rate was nearly 7% worldwide, while some premium carriers in the Middle east and Gulf region, having strong state sponsorship like Emirates, Etihad, and Qatar Airways, followed a trend of competitive policy towards expansion. They spent recklessly on fleet expansion, state-of-the-art cabin, entertainment systems and unique customer services in order to woo customers and maintain a frenzy of one-upmanship in winning the so-called star awards.
Etihad, Emirates and Qatar Airways being the poster children of their wealthy Gulf states proudly carry their national flags to showcase their countries around the world. They captured the air travel market by offering unparalleled luxuries to worldwide customer base. They have been a bit too entrepreneurial in showing their international presence by trying few risky ventures of buying stakes in foreign airlines. That did not work well, and the plans finally tanked, resulting in heavy losses. All that looked so fancy because the going was good, and the cash injection was not a worthy tool.
There’s no doubt that the world will overcome this challenge. What is not yet clear is that how long it will be until travel restrictions are lifted and airlines can start flying again. Though, there is a small reason for optimism in the domestic market of China, which has begun to show signs of recovery. The freight market has also seen a surge with some players seeing a 50 percent increase in utilization in the past couple months. For those diversified operators with freight operations, this has presented an opportunity to at least offset some of the lost passenger revenue.
However, speaking of global impact, the massive hit to everyone’s pocket could mean that consumer demand for flying could take a long time to regain momentum before returning to pre-COVID-19 traffic level. Hopefully, many of the grounded birds would soon be taking to the skies as humans learn as to how to coexist with the deadly virus and resume normal life.
The author Rafiq Jan is an experienced Aviation analyst, current affairs blogger and a freelance writer.