Airline Transportation

   When COVID started to create huge concern, governments across the world decided to ban or regulate air travel. However, this is not a new crisis; in 2003, SARS, a severe acute respiratory syndrome, caused a decrease in aviation passengers and profits. Revenue dropped severely for airlines across the world. Regulations and guidelines were put in place to accommodate COVID’s impact. 


Revenue

   COVID brought about the worst decline in passenger traffic ever seen across the world. Well, according to the International Civil Aviation Organization (ICAO), in 2019, air passenger traffic was down by 50%, in 2020 it was at an all-time low of 60% passenger traffic, and now in 2021, traffic has increased by only having 49% of total passengers. As a result, in 2019, "approx. USD 371 billion loss of gross passenger operating revenues of airlines" and in 2020, "approx. USD 323 to 327 billion loss of gross passenger operating revenues of airlines." By far the greatest revenue loss in airline history was caused by an epidemic.The SARS crisis only had a cost of US $40 billion for the Asia Pacific region alone, according to the article "Airline networks and the international diffusion of severe acute respiratory syndrome (SARS)", compared to Covid-19, which had a US $120 billion cost in revenue for the same region shown in the image below.



Business Travel

There is a concern about business travel and whether it will ever recover, or if video conferencing has taken out the point of business travel. The article "An early assessment of the impact of COVID-19 on air transport: Just another crisis or the end of aviation as we know it?" suggests business travel related to MICE will take longer to recover because "many events have already been cancelled or postponed, and the marketing and travel budgets of companies will be significantly reduced as economic activity slowly recovers in the coming few years". Early research from 2004, the article "Impacts of videoconferencing on business travel: the Norwegian experience" shows no negative impact on business travel, but nowadays, with increasing digital connectivity, it poses the concern of "... reducing the propensity of some executives to fly, especially for meetings with staff members of the same company where relationships and trust already exist." It is unclear how these lock downs may affect business travel, but"... Some argue that even if the impact on the reduction of business travel were as small as 5% or 10%, that would be enough to have a serious impact on airlines."


Leisure Travel

   What about leisure travel? It was reported that global tourism suffered its worst year on record in 2020, with international arrivals dropping by 74%. In the article "An early assessment of the impact of COVID-19 on air transport: Just another crisis or the end of aviation as we know it?" Airport representatives mention that "support from cities, regions, and tourism authorities in the form of marketing aid would be essential to help airlines restart tourism-related air services in a context of weakened demand." It was also noted that "leisure demand might recover earlier than business demand, but the reduced disposable income associated with a slow economic recovery will mean consumers will travel less." The rate of growth at which vacational travel increases really depends on how people feel about traveling due to potential health risks and other factors like lower household income. Interviews mentioned that they'd rather have a "staycation."


Regulations

   Countries around the world have started closing their borders, some partially and some completely. They have also started implementing restrictions and regulations. The ICAO data shows that "as of May 18, 2020, 100% of all world destinations have travel restrictions." Around 185 (85%) destinations have closed their borders completely or partially, while 11 (5%) have suspended completely or partially international flights.As a result, airlines had to have a mass cancelation of tickets. Instead, "airlines offered vouchers for subsequent use as a way to protect their financial situation and avoid imminent bankruptcy." In response, the EC published EU passenger rights regulations for European airlines during the pandemic. The guidelines forced airlines to reimburse or re-route passengers. Unfortunately, these guidelines were not followed and 12 governments urged the EC to suspend these regulations. In addition to regulations, airlines would need to settle on ticket prices. Passengers seem to have the benefit here. It looks like airlines will lead to lower prices because of demand, oil pricing plummeting and lower costs for aircraft leasing. But airlines will need to make significant adjustments to combat COVIDS' impact and revenue loss. Some airlines are at the point of taking government aid to fight against these losses.

 

 


SARS-2003 and COVID-19

   So how does Covid-19 compare to SARs? Between November 2002 and July 2003, approximately 8100 people were infected with severe acute respiratory syndrome (SARS), with nearly 800 people dying as a result (World Health Organization (WHO) 2004). "( WHO developed a three-stage containment strategy for SARs.First stage: "WHO released its initial warning of the SARS virus and recommended that international travellers worldwide bound for Asia be informed of the warning signs and symptoms of the disease." Second stage, "WHO recommended that in all areas of local transmission, each departing passenger be asked by airline personnel: if he or she had had contact with people with SARS; if he or she had any symptoms of SARS, including fever and dry cough; if any family member had had contact with the disease". Similarly, at airports during COVID-19, regulators like temperature checks or even quick antibody tests for COVID-19 were put in place. Social distancing was put in place. Some airlines offered empty middle seats. Masks were required as well. The COVID-19 pandemic is on a whole different level, and to be honest, it is not a lot of crisis compared to its impact.

 

 

Bibliography

“An Early Assessment Of the Impact Of COVID-19 On Air Transport:.” PubMed Central (PMC), Www.ncbi.nlm.nih.gov, 1 June. 2020, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7269949/#bb7000.


BOWEN, JOHN  T, and CHRISTIAN  LAROE . “Airline Networks And the International Diffusion Of Severe Acute Respiratory Syndrome (SARS).” PubMed Central (PMC), Www.ncbi.nlm.nih.gov, 1 June. 2006, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7194177/#b2.


Cseres, Katalin J, and Agustin Reyna. “EU State Aid Law And Consumer Protection: An Unsettled Relationship In Times Of Crisis | Journal Of European Competition Law & Practice | Oxford Academic.” OUP Academic, Academic.oup.com, 1 October. 2021, https://academic.oup.com/jeclap/article/12/8/617/6273236?login=true.


ICAO. “Economic Development – Air Transport Bureau.” Effects Of Novel Coronavirus  (COVID‐19) On Civil Aviation: Economic Impact Analysis, 2 November. 2021, https://www.icao.int/sustainability/Documents/COVID-19/ICAO_Coronavirus_Econ_Impact.pdf.




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