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5 Ways COVID-19 Has Changed the Aviation and Airline Industry

  • by: Ryan Abbot
  • On: 14, Jul 2021
6 min read

It’s hard to estimate just how much the COVID-19 pandemic has devastated airlines. Aviation companies have had to innovate and adapt like never before to stay alive. With various lockdowns easing worldwide, the pandemic’s longer-term effects on the industry are starting to show.  

 

5 Ways COVID-19 Has Changed the Aviation and Airline Industry 

 

Safety, hygiene, and social distancing practices will be more stringent in aviation, and the focus will continue to be on digitalization – especially with the use of mobile apps. 

Following the announcement of the pandemic by WHO in March 2020, global revenue from air traffic has shrunk tremendously. Taking a plunge from $581 billion in early 2020 to a meager $231 billion at present. As new conditions unfold, the industry continues to shift and adapt to the new normal. But while change can be scary, it also opens doors to new avenues. 

With travel slowly starting to pick up and the end being in sight, VHR’s aviation specialists look at how the aviation and travel industry will return and the changes we can expect to see.  

 

1. Financial Impact  


The International Air Transport Association (IATA) released an updated global passenger forecast showing that the recovery in traffic has been slower than had been expected with countries like Indian and various countries in Europe locking back down. We can see that different regions and countries are at different points in their recovery, with some countries such as the USA declaring a profit for 2021 of passenger travel. 

The pandemic has had a devastating impact on the air travel industry. A reduction of 1 billion passengers hit the industry with a loss of $84.3 billion last year. Most of this is due to the travel restrictions imposed by governments across the globe, leading even the most successful airlines to rethink their business strategy.   

A change in business strategy has made airline companies initiate new practices. A small contribution from business traffic could necessitate a different pricing logic with more travellers becoming price sensitive.  

 

2. The Rise of Air Cargo 

Domestic flights are dealing with a slump in demand. Conversely, air cargo seems to be picking up speed. The increase in e-commerce has had a domino effect on shipping by air, shooting the demand up by 9% compared to the start of the pandemic. 

Cargo by air is fast and also cheaper than cargo by container at the moment, making it a reliable option for manufacturers, retailers, and businesses.  

 

3. A Shift in Culture 

The lack of travel has caused people to change the way they conduct business meetings and events. Many have hopped on the virtual event bandwagon as an alternative.  

Furthermore, the rise in work-from-home culture also reduces the need to travel, and this is how business is predicted to carry on as we progress into the future. 

Things may look grim for airlines at the moment, but it is not going to last forever. Virtual platforms are handy because of their easy access. However, there is no substitute for real face-to-face meetings.  

As the world adapts to the pandemic, it is expected that this virtual culture will die down, and air traffic will eventually resume as normal. 

 

4. Redundancies For Pilots  

The prices of airfare haven’t increased significantly amidst the outbreak of novel coronavirus. But as the industry is suffering, something has to give. Airlines had to cut down on the number of staff, causing many to lose their jobs.  

While pilots are facing job and salary cuts in some countries, others are experiencing a surge in demand. 

Countries like India, the USA, and recently announced the UK, for instance, are calling back their pilots to join the workforce. Showing a hopeful picture for those who are currently out of work. With the travel restrictions becoming less stringent, things seem to become smooth for airline staff. 

 

5. Lease or Buy? 

Buying an aircraft is a huge challenge for businesses in the airline and aviation sectors with a limited cash flow. Capital expenditure is not an option right now. When there is a crisis, there is an opportunity to come up with better, more efficient solutions resulting in the rise of aircraft leasing.  

Leasing is bound to play a vital part in reviving the industry. It is the most viable choice for airlines to meet the increase in demand without going bankrupt. 

 

Getting Back On Track   

As border travel barriers are being lifted, things are starting to recover. The rate of domestic travel is now gaining momentum as daily bookings move up to 74% of the pre-crisis level. If this tells you anything, it’s that air travel is irreplaceable.  

Sure, the aviation industry has seen its fair share of misfortune, but it is resilient, and it is bound to bounce back to full capacity after travel restrictions end. 

 

Looking for a job in aviation? Take a look at our opportunities

Take a look at the aviation brands that have  bounced back from crises

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