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An early assessment of the impact of COVID-19 on air transport: Just another crisis or the end of aviation as we know it?

Along with other sectors of the economy, air traffic is vulnerable to external factors, such as oil crises, natural disasters, armed conflicts, terrorist attacks, economic recessions and disease outbreaks. These outside influences seem to have a more severe and more rapid impact on air traffic numbers as sudden increases in flight cancellations, aircraft groundings, travel bans and border closures are quickly felt in lower load factors and yields for airlines, while airports lose non- aeronautical revenues (Voltes-Dorta and Pagliari, 2012). Before Covid-19, the most important disease outbreak in terms of impact on air traffic was SARS in 2003. According to IATA (IATA, 2020a), in May 2003, at the height of the SARS outbreak, monthly revenue passenger kilometres (RPKs) of Asia-Pacific airlines were 35% lower than their pre-crisis levels. Covid-19 has gone well beyond these levels and is currently taking the aviation industry into uncharted territory. As of 24 March 2020, 98% of global passenger revenues were accounted for by air transport markets with severe restrictions (i.e., quarantine for arriving passengers, partial travel bans, and border closures), many airlines have been brought to a complete stop and, to make matters worse, the provisionally-observed recovery pattern for Covid-19 is turning out to be slower than the short-sharp V-shaped pattern observed in 2003. The authors' paper does not deal with the epidemiological/transport aspects of the current pandemic but, instead they focus on estimates of the medium- and long-term impacts of Covid-19 as seen within the aviation industry itself. They do that by discussing the results of a series of in-depth interviews with senior industry executives. These interviews were conducted during the first weeks of the crisis, as the governments all over the world started to implement widespread lockdown measures. It was a period of extreme uncertainty, hence the authors' analysis does not deal with specific recovery scenarios. Instead, the focus is placed on identifying structural aspects of the aviation industry that will shape its medium- and long-term response to sudden changes in passenger and cargo traffic. These structural elements incorporate supply, demand, regulation and business ethics. Understanding these structural dimensions, via comments of survey respondents and though links to recent research, can provide more confidence in efforts to predict the future context. Since the views of senior stakeholders might change as the crisis evolves, a record of their early assessments represents a valuable reference for future analysis. The remainder of this paper is structured as follows: in Section 2 the authors describe their methodology to carry out the interviews. Section 3 provides an overall picture of the major traffic impacts of Covid-19 during the first four months of 2020. Section 4 discusses the interview results in relation to the supply-side on the industry. Section 5 examines the long-term changes of in demand and passenger behaviour. Section 6 deals with regulatory aspects. Section 7 reviews the major uncertainties identified by the experts. Section 8 discusses some of the opportunities identified by the interviewees to transform the aviation industry and discusses some ethical aspects. Finally, Section 9 presents the conclusions.

Language

  • English

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Filing Info

  • Accession Number: 01744353
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Jun 29 2020 11:21AM