Airline Industry In Crisis Due To The COVID-19 Pandemic

According to the research during the COVID-19 crisis, many different sectors have been affected vigorously but among all, airlines have been impacted the most.

Euromonitor International has shared the same thing about travel and tourism saying that along with airlines, travels and tourism are on its knees and gave been hit the hardest. This coronavirus crisis has seen a loss of around 90 percent of passengers and airlines are facing a huge loss and are potentially bankrupt. According to Industry Oriented Research from Apelo Consulting

Even after the abolition of travel restrictions, the formerly lucrative business travel segment may change permanently as companies become accustomed to a cheaper, more efficient, and safer alternative to video conferencing. Rising unemployment is also stifling consumer spending on travel, with weak passenger confidence and a continuing negative press.

Due to the impact of COVID-19, some investors have completely avoided the aviation sector. Back in May, billionaire investor Warren Buffet famously sold his entire stake in Berkshire Hathaway in the United States, America, the Southwest, and the Delta, saying: "The world has changed for airlines."

Impact On Airline Industry Due To COVID-19

The revenue generated by airports is directly related to the level of traffic. As a result of denials and cancellations, the number of flights will decrease, so there will be less aviation revenue. Unlike other aviation operators, airports have limited scope for cost reduction as traffic demand declines. The costs of operating the airport infrastructure will remain the same and airports will not be able to close or relocate terminals and runways.

Another aspect that is important and necessary is non-aviation revenue because aviation revenue alone cannot cover all airport activities and capital costs. For hubs in some regions, non-profit organizations are the main source of revenue. Asian and Pacific airports earn around 45 percent of revenue from non-aviation sources. The decline in passenger numbers has a significant impact on the performance of the airport and the airport retailer.

It also has a human impact on the community and all staff working at the airport with different sectors and service providers. It has become common for retailers and airlines to ask their staff to take unpaid leave at this worrying time.

According to KOL Study for Business from Apelo Consulting

An industry that faced challenges

Before the pandemic, airlines tried to increase revenues, even if they had increased passenger and freight traffic. Over the past five years, according to IBISWorld, the global aviation industry has grown at a slower-than-expected pace due to volatile fuel prices, increasing competition, the spread of low-cost airline tickets, and declining world trade. Airlines known for their high fixed costs have often faced many serious market failures.

Mapping Potential Recovery

The current market environment is full of worrying reasons, but a potential improvement is expected for the global aviation industry.

A recent survey of 537 aviation experts, including aviation and airline managers from around the world, provides some perspective on the possible timing and nature of a possible recovery.

According to the survey, 60% thought that it could take industry 18 to 3 years to reach pre-COVID levels. A significant majority (89%) said that the industry would recover, but 69% said that the industry would be fundamentally changed.

This recovery schedule is roughly in line with the market research firm Frost & Sullivan's estimate that passenger numbers predict pre-pandemic levels in two or more years.

The Airline's Business Strategies During COVID-19

Although the recovery may not happen soon, there are some growth opportunities for airports and airlines.

Frost & Sullivan advises airlines to move in a number of ways during this uncertain period:

• Use digital solutions to exchange resources and increase up / down operations efficiently. Digital tools can help meet a variety of needs, including business efficiency, contactless boarding, revenue management, and network planning.
• Implement next-generation technologies. The Internet of Things and big data analysis help optimize the operations of airlines and airports and make health checks more efficient.
• Negotiations to conclude transactions to reduce fixed costs, implement budgetary discipline, and protect the well-being of workers.

Additional Airline Market Research

Looking for up-to-date analysis of the aviation industry? MarketResearch.com provides comprehensive, data-packed reports on almost any topic related to the aviation industry. We cover all regions of the globe, individual countries, and various market segments.

The situation regarding the response to COVID-19 remains smooth and the consequences for the emerging aviation industry are uncertain.

According to Market Research Service from Apelo Consulting