Friday, 5 June 2020

Impact of Covid-19 on Airlines Industry

What is the “Impact of Covid-19 on Airlines Industry
 ·      The COVID-19 pandemic has had a significant impact on aviation industry due to the resulting travel restrictions as well as slump in demand among travellers. 
·      Significant reductions in passenger numbers have resulted in planes flying empty between airports and the cancellation of flights, which in turn massively reduced revenues for airlines and forced many airlines to lay off employees or declare bankruptcy. In turn, this impacted airline manufacturers and airport operators, who also laid off employees. According to some commentators, the ensuing crisis is the worst ever encountered in the history of the aviation industry.
·      Impact on Global Aviation industry due to COVID-19 Pandemic, Deviation & Trends Analysis Report: Segmentation (Passenger Airlines, Cargo Airlines, Aircraft manufacturing companies, Airports managing companies, and Catering & other service providing companies) and Forecast 2019-2025.
 ·      The Global Aviation Industry is concerned with the manufacturing and operations of all types of aircraft and related services during transportation. According to the World Bank Organization, in 2018, around 4.2 billion passengers were carried around all across the globe. Factors that were driving the aviation industry before the COVID-19 pandemic include increasing disposable income all across the globe, the introduction of low-fare airlines, increasing global economic activities, new travel trends, and many more. Moreover, replacement of aging commercial aircraft has also contributed significantly to the market growth.
 ·      The key factors affecting the aviation industry after the pandemic include the decline in tours and travels as a large number of international as well as domestic flights are getting cancelled all across the globe to curb the transmission of the virus. The government all across the globe are cancelling the visa of foreign people and locking down affected areas which is also one of the major reasons behind the slowing down of the aviation industry.
 ·      The global Aviation industry report is segmented into passenger airlines, cargo airlines, aircraft manufacturing companies, airports managing companies, and catering & other service providing companies. Out of which, the passenger airline segment is expected to get affected most along with catering & other service providing companies. Cancellation of airplane order may also be witnessed in the near future by the airline companies affecting the airplane manufacturing companies.
 ·      Effect of COVID-19 on the aviation industry can be observed in each region including North America, Europe, Asia-Pacific and Rest of the World. For instance, in the US, since the national health emergency due to the COVID-19 outbreak, most of the region is on complete lockdown, which is in turn restricting the domestic travel in the country. Countries such as Italy, France, Spain, and India are under complete lockdown and all kinds of flights are stopped until further notice.
·      Key companies of the aviation industry that are getting affected globally include Qatar Airways, Emirates, China Eastern Airlines, Lufthansa, Boeing, Airbus, American Airlines Group Inc., and Delta Air Lines. For instance, Qatar Airways suspended all of its flights to and from Italy that was one of the worst-hit countries by the pandemic of COVID-19. Additionally, the company has also decided to scale back its operation which includes cutting flights and removing less economical aircraft. Qatar Airways grounded all its ten A380 aircraft until 31 of May 2020, as a precautionary measure of COVID-19 outbreak.
 ·      Moreover, Emirates also halted most of its passenger operation as a result of the pandemic. Now, airlines and airport management companies are seeking bailout packages from the government. For instance, airport managing companies in Europe are expected to incur a loss of $15.4 billion due to pandemic. It is estimated that airports in Europe will receive 700 million fewer passengers which are 28% less as expected earlier.

Shweta Upreti MBA
Manager HR (Internship InCharge)
Aircrews Aviation Pvt Ltd
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