Due to coronavirus, there have been huge losses going on in the tourism industry. The safety, trust, and innovation are critical to airport transport sector revival, so a lot of thought is put in. Passengers’ safety is a priority of the air transport sector, while digital transformation, automation, and customer experience also lead to strategic priorities for airlines, airports, and partners. As passengers plan their journey to gain wonderful flying experience, the airlines, airports, and other air transport industry stakeholders will have to emphasize total safety and trust-building.
It has become a central part of the strategies that are being planned for recovery. Investment is another significant factor that comes into the limelight, and that is why priority is given to digital transformation, automation, and sustainability. The innovation and customer experience have to improve amid the threats of COVID-19. The new report has proper plans and ideas shared between the immediate future, future travel experience (FTE), and Airline passenger experience association (APEX).
The air transport sector stakeholders had already expected that COVID-19 is going to put a lot of pressure on the economy of all the countries. However, the tourist spots are suffering the most, as some countries heavily depend on the aviation industry. There will be a high impact on passengers’ volume and numbers, and other investment strategies have to be changed overall. According to the latest global survey, it has been observed that for the next two years, 68.4% of the stakeholders and respondents expect that there will be a high level of investment in digital transformation.
About 60.3% of people who are expecting investment taking place in automation and even artificial intelligence will be deployed. The AI technology will rise while 53.5% will be expecting a lot of investment in innovation that will further increase in the coming years. Simultaneously, a lot of money will also be invested in sustainability and initiatives for environmental issues. There is no doubt that a lot of money has to be supported to give customers the best experience. Some stakeholders believe that the investment has to come down one way or the other. While another half of the respondents who have been taking care of the survey believe the investment in aircraft orders may have to decrease in the coming years.
Air transport facing two to the three-year recovery period
There will be a decrease in terminal design and the constructions spend, and most of the stakeholders expect that to happen in the coming years. The findings of this survey show that the tourism industry is facing a significant impact on flight volumes and the number of passengers has drastically decreased. Simultaneously, the air transport sector’s revenues have drastically come down, and the recovery of the industry will depend on the policy of the Government, health factors, and keeping in mind the safety of passengers. They have to feel confident and save to take flights. They won’t feel like traveling to any destination. The collaboration between the big players in the industry has to be powerful, or recovery may take even more time. Many people expect that the tourism industry may take more than three years to recover, while others believe hard work can pay off before that.
Passengers will only feel safe when new procedures are maintained or planned for their safety. The report further suggests that 32% of the passengers will feel protected as soon as the coronavirus vaccine is released. In comparison, 11% will fly only if necessary, and 10% of passengers will wait for the World Health organization’s advices. There is no doubt that coronavirus impacts are going to last on people’s minds for some time and when all of it will be gone is hard to predict. The airports, airlines, and partners will have to take new steps and prepare for the new reality.
Health and safety efforts will have to be enhanced, but the stakeholders should also work hard in giving the passengers a thoroughly sanitized travel experience. There have to be some radical new approaches and strategies for a full recovery. The collaboration between all the concerned parties is also essential to achieve and make use of this vision. The air transport industry needs a lot of survival, and there is no doubt about it.
Drivers of economic recovery
The economic recovery has been the most discussed topic at this point, but the situation differs from one country to another. The nature of economic recovery will depend on the strategies and ideas implemented by each state and their Governments. There is a decline of 6% in the GDP of an economy due to the aviation industry’s losses. The GDP of some countries has fallen to 40% as some countries are more dependent on tourism.
The recovery path may take some time to follow, but many countries are at least looking to overcome initial roadblocks. There has to be a perfect momentum that needs to be followed. The tourism industry may take even more time to recover. Hopes are high for the vaccine, and many countries are already racing towards it. There could be these four sceneries for the air industry.
- The long goodbye (countries affected badly by pandemic)
- VIP economy (vibrant economy and rebounds)
- Safe but hungry for more (Pandemic eliminated but extended downturn)
- Inclusive abundance (Vibrant economic rebounds)
The critical forces have identified their plans and strategies for the possible road to recovery:
The lockdowns in various countries are already lifted, and consumer spending will now be increased. There are some countries where the incomes of people have not come down. If they plan to travel, it will give a boost to the tourism industry. Many of the passengers will be tempted when discounts and superior officers are provided for air tickets. They may want to visit those places that have a high level of safety procedures. If people feel nervous, they will most likely don’t plan for outdoor activities to forget about traveling to other countries.
Air transport sector recovery
Very close attention has to be given to recover the air transport sector. All the concerned authorities and stakeholders are coming up with their plans and ideas. Social distancing rules have come into play, and other safety features will be planned for all the passengers. They have to feel at ease, and if the vaccine arrives, things look even brighter.
It is a natural reaction that due to the pandemic, many stakeholders and other essential parties will not like to invest in the air transport sector. It happens to be in the most threatened and vulnerable sectors right now. Many people might lose and have already lost their jobs due to this crisis. There may be some optimistic businesses that are willing to invest in the industry, and the critical factor will be access to capital and loan lending.
How will the aviation industry recover?
Airlines face many international crises due to a pandemic, and there are estimates that the global industry will lose about $252 billion in 2020. We also know that many airlines have been cutting their flights as people are not willing to travel yet. The US Federal Government plans to give some incentives to the airline workers, and some loans have already been given to them. Even in the UK, the industry depends on 80% of salaries, but the Government has given them some loans to survive. The air industry has faced many crises during 9/11, too, but the airlines in Europe are suffering the most. The Government isn’t willing to help, and the economic hit airlines have to suffer the most. Does the question arise on how the travel industry will boost up their revenue now? The air transport industry experts are looking at the structure and response of the industry.
Many countries are now opening air traffic, but the commercial airlines’ demand is highly unlikely to revive anytime soon. There is a lot of impact on leisure traveling, and the need for new technology and innovation is always on the rise. Many analysts believe that bringing down the prices of air tickets may help a little. However, the profits will come down, and airlines may not recover fully in the next few years. The industry trackers also believe the resuming the airline services during a pandemic will not bring many profits. The 14-day quarantine and compulsory coronavirus tests may hinder the people coming out of their homes. The passengers’ cost will also increase, and it will not remain a perfect holiday. The 14-day quarantine and the cost of PCR tests will increase their budget too. In this situation, the airlines’ profit margin will come down, and the taxes will not exceed more than 0.2%. Airlines have to deal with such things in an appropriate way
Challenges and solutions for air transportation
Governments are persuading their state Governments to reduce the Value added tax (VAT). The jet fuel is costly, and the civil aviation factor has to struggle hard to come back. The value-added tax on the fuels will come down so the airlines can think about their survival plans. Some tax concessions will also be given on the parts of aircraft and other equipment types for the repairs and maintenance of the crafts. The revival of airlines is based on:
- There is a need to enhance the competitiveness inside the country, and the cost of air transport has to decrease
- Faster opportunities are given to promote tourism, agriculture, and other details
- Meet the growing demand for air transport (passenger as well as cargo)
Most of the people who love travelling will now have more apprehensions.How many flights will now operate will depend on many factors too. The plane whenever stands on the ground costs a lot more than expected. For example in India 650 planes are now not in use and loses in the aviation industry will add more pressure.
To move forward, the processes for the revival of airlines have now become a top priority. The task forces of pilots and aviation experts have to support each other, and there has to be a proper road plan to ensure that the airlines start operating with conviction. The task forces that are appointed can undertake and identify strategies for the revival in the aviation industry. The detailed agreements have to occur with aircraft manufacturers who have also supported their proposals, and the technical analysis has to come up with the best choices. The travel restrictions, grounded fleets, and uncertainty in the schedules are raising a lot of eyebrows on whether the aviation industry will survive or not.
With 290 Airlines, they have been handling 82% of global traffic, but they have been working under strict restrictions for the past many months. Singapore Airlines have announced for the ground of 96% of their fleets while the Changi airport has closed down one complete terminal for nearly a year. They are feeling that airport traffic is not going to increase within one year. For the airports in India, it will take even more time to handle their travel industry as the cases of COVID-19 seem to be rising every day. It will depend on how these airlines are planning to survive amid strict restrictions from the Government.
The crises that are being faced by the aviation industry this year are uncertain, and there is no definite prediction for it. Many don’t even have a clue about how to get the industry back on track. If we look at the previous details during 9/11, the aviation industry took a lot of time to come back. Some experts feel that it is not a matter of restrictions. Only many countries aren’t allowing visas, traveling is not being allowed, and airlines are also not allowed to function. Even when all these things are permitted, there will be a lot of apprehensions among people. Will they travel for business or leisure? Only time will tell.