Opinion: The Aviation Industry May Never Recover From Its Current Crisis

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Opinion: Announcements of early fleet retirements and significant staff lay-offs have produced some reasonably dramatic headlines over the past few weeks. Singapore’s Terminal 2 is closed, easyJet is grounded, Delta is losing $60 million a day, and Lufthansa has decommissioned 32 aircraft. Still, the mood in the industry appears cautiously optimistic as though the current blip, while severe, is still just a blip. Your author believes this is wrong; here’s why I think commercial aviation in the Western world may never recover.

757 landing into the sunset
Do we see the sunset of the aviation industry as we know it? Photo: Getty Images

Environmentalism and flight shame

Last week, I presented the view that the outbreak of COVID-19 will accelerate the spread of ‘flygskam’ or flight shame. This will have a marked effect on the Western world, where flight shame is already disrupting the German domestic market and curbing European flight growth.

But that is only one of how aviation will change. Indeed, there will be several more negative pressures on the airline industry, which will never be the same as pre-COVID-19.

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Tourism

Airlines benefit strongly from tourism. This is because tourism is, at the same time, both a luxury and a necessity. On the one hand, rising population growth raises GDP, which increases incomes and leads to more demand for travel. Air travel is quick, increasingly inexpensive, even glamorous. At the same time, social media is fueling travel demand as National Geographic noted years ago.

And yet, COVID-19 has put an abrupt stop to most travel. Even before governments imposed restrictions, demand plummeted as people engaged in bottom-up social distancing. In the short-term, I believe the travel halt is here to stay. But I also think that, in the long run, air travel will not entirely be as it was before COVID-19.

The economic downturn that we are swiftly entering will likely depress the incomes of a broad base of people all over the world. JPMorgan anticipates a “sharply negative” slowdown in the US and warns of a potential global recession too.

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At the same time, I believe travel may no longer be seen as risk-free, as we have come to think it is. The UK Government estimates 15 million people (almost a quarter of the population) live with a long-term health condition. It is not for sure that all these people will willingly jump back onto aircraft when travel restrictions are lifted, not even if COVID-19 is defeated globally within the next year (which, in reality, is highly unlikely).

austrian-airlines-boeing-767-getty
The CEO of Austrian Airlines already noted that the airline needs to start adjusting to a change in the way tourism will be done after COVID-19. Photo: Getty Images

It is becoming clear that demand will be highly unlikely to return by this summer. But even when restrictions are lifted, or when a vaccine is found, that doesn’t guarantee an automatic return to where we were before. I believe that the outright ban on traveling we see right now will permanently change patterns of air travel.

Imperial College London researchers suggest travel restrictions should come and go as COVID-19 cases fluctuate, as a matter of public health policy. Health checks at airports across the world might become a routine procedure, just like thorough security screening did after 9/11. Insurance premiums could rise in line with the increased perceived risks of travel. For some passengers, the sheer hassle of all this could be enough to inspire a staycation.

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737 MAX
With growing adverse pressures on-demand in the aviation industry, will we ever need as much aircraft capacity as we had before COVID-19? Photo: Getty Images

Technology

It would be foolish to suggest that business travel will stop after lockdown restrictions are lifted. Corporate travel will always exist at a certain fundamental level since video calls do not allow for the same rapport building as face-to-face meetings.

But the current travel restrictions will not be lifted soon, and companies are finding it necessary to figure out ways to work around them. As such, I believe that business travel will become an increasing issue of corporate social responsibility. I think this way because paying employees to fly will become increasingly costly for the public image of the company.

Growing pressures on companies to make net-zero carbon output pledges will not circumvent paying employees to fly on business trips. The Guardian has already written about this.

For all these reasons, I believe that commercial aviation may never again be the way it was before COVID-19. Do you agree? Let us know in the comments.

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