An Overview Of The Impact Of Covid-19 On Airlines.

Air travel has been one of the hardest-hit industries as a result of the COVID-19 pandemic. The airline industry have never before withnessed a shock of this magnitude affecting the entire world for what looks as if it will be a very long time.

Aviation Rountable blog takes a look at the critical issues. Will the airline industry be able to handle this predicament? What role will and should the governments play? And, when all this is over, what will have changed for good?

Almost as soon as news of the virus became widespread in late-January, travel demand to Asia from the rest of the world plummeted. Even before the containment was adopted across the globe, airlines began to drastically cut flights to China, and other locations in Asia as coronavirus-related anxieties and travel apathy led passengers to avoid travel to the region.

Within weeks, however, it became apparent that flights to Asia were not the only routes to see lower demand. As the virus spread to Europe, followed by the Americas and Africa, Passenger demand plummeted across the board.

People were second-guessing trips anywhere away from home, and were trying to avoid anything involving air travel, given the inherent close proximity to other people, some of whom could be carrying the virus.
Notably, people were also delaying buying tickets for future travel, due to the uncertainty surrounding the outbreak.As countries around the world have closed their borders, and many states and nations have locked down, air travel has declined significantly, with airlines suspending routes, grounding planes, and seeing low load factors on their few remaining flights.

The effect of covid-19 epidemic have put enormous strain on airlines leading to the collapse of some airlines. While Flybe had ongoing financial difficulties and was already on the brink, the coronavirus situation, and the associated decrease in bookings, served as the final nail in its coffin. Flybe operated about 40% of domestic flights in the UK.

Experts are warming of a looming bigger crises for airlines if the problem lingers for so long. Airlines began laying off some of their staff in a bid to stay afloat in view of the current operating realities.

What exactly can respective Governments and airlines do in this period of uncertainty?

We take a look at 3 options:
*Let the struggling private airlines fall as the case of Flybe with the obvious burden of job loss as a result of such collapse.
*Bail out funds to airlines to help weather the storm as the case of President Trump signing a $58 billion bailout fund for the airlines in US.
*Merger and acquisition of smaller airlines to become more formidable and competitive in the face of the enormous challenges.

Once the pandemic is over, flight frequency will be lower and planes might be emptier, depending on the fleet mix the surviving airlines will use until when a time when the existing apathy dissipate.

Whether prices will be higher or lower will depend on the interplay of demand and supply.Fewer airlines and fewer flights would tend to drive airfares up, while lower demand and lower fuel prices after what is shaping up to be a global recession would drive airfares down.

Airlines might also introduce an acceleration of product unbundling(food, drinks, baggage allowances and so on being sold separately), especially if recovery is slow and surviving airlines will be under pressure to cut costs.

In a nutshell, the aviation industry faces an uncertain future.It is absolutely imperative to note that the airline industry will wear the scars of the coronavirus pandemic for a very long time to come.