Will we ever get back to how it was?
The COVID-19 pandemic has had a significant impact on the aviation industry due to travel restrictions and a slump in demand among travellers.
Significant reductions in passenger numbers have resulted in flights being cancelled or planes flying empty between airports, which in turn massively reduced revenues for airlines and forced many airlines to lay off employees or declare bankruptcy. Some have attempted to avoid refunding cancelled trips in order to diminish their losses. Airliner manufacturers and airport operators have also laid off employees.
In the history of the aviation industry, the ensuing crisis is the worst ever according to Airbus' Guillaume Faury, EasyJet's Johan Lundgren, United Airlines' Oscar Munoz, Qantas' Alan Joyce, and media outlets: the Financial Times, The New York Times, or The Independent
Government regulations in Europe and the United States mandated that airlines refund fares when flights are cancelled, but in many cases airlines have instead offered vouchers or travel credits that must be used by the end of the year. (Some airlines have extended the voucher window to May 2022.) Despite pleas from industry lobbyists to expand the regulations to allow travel credits, the US Department of Transportation has reiterated that airlines are obligated to provide refunds for cancelled flights. Travel vouchers are currently allowed when passengers cancel travel plans due to travel warnings, stay at home orders and other restrictions.
Aviation sector recorded an 80% decrease in flight movements across all geographic regions, including America, Europe, Asia-Pacific and Middle East as of 4 May 2020.
Many flights from Hong Kong were cancelled in March 2020 due to the pandemic.
Early March 2020 saw 10% of all flights cancelled compared to 2019. As the pandemic progressed, 40–60% fewer flight movements were recorded in late March with international flights affected the most. By April 2020, over 80% flight movements were restricted across all regions. Research shows that world recovery of passenger demand to pre-COVID-19 levels is estimated to take 2.4 years (recovery by late-2022), with the most optimistic estimate being 2 years (recovery by mid-2022), and the most pessimistic estimate 6 years (recovery in 2026). Large regional differences are detected: the Asia-Pacific has the shortest estimated average recovery time of 2.2 years, followed by North America in 2.5 years, and Europe 2.7 years. For air freight demand, a shorter average world recovery time of 2.2 years is predicted if compared to passenger demand. On the regional level, Europe and North America are comparable with average recovery times of 2.2 years, while the Asia-Pacific is predicted to recover faster in 2.1 years.
As passenger flights were cancelled, the cost of sending cargo by air changed rapidly. The cost of sending cargo across the Pacific Ocean tripled by late March 2020.
Adjusted cargo capacity fell by 4.4% in February 2020 while air cargo demand also fell by 9.1%, but the near-halt in passenger traffic cut capacity even deeper as half of global air cargo is carried in passenger jets' bellies. Air freight rates rose as a consequence, from $0.80 per kg for transatlantic cargoes to $2.50–4 per kg, enticing passenger airlines to operate cargo-only flights, while cargo airlines brought back into service fuel-guzzling stored aircraft, helped by falling oil prices. Passenger airlines were enticed to convert aircraft.
At the end of March 2020, cargo capacity was down by 35% compared to the previous year: North America to Asia Pacific capacity fall by 17% (19% in the opposite direction) Asia-Pacific to Europe was down by 30% (reverse: -32%), intra-Asia was down by 35%. Lagging the capacity reductions, demand was down by 23% in March, resulting in higher freight rates: from China/Hong Kong, between 2 March 2020 and 6 April 2020 +158% to Europe and +90.5% to North America. By May, freight rates from Shanghai were $12/kg to North America, $11/kg to Europe.
The cargo shortage may evaporate if the global economic crisis depresses demand: the WTO forecast a global trade contraction of 13–32% in 2020.
International mail between many countries stopped completely, either due to suspension of domestic service or lack of transportation.
Business aviation was less affected than airline traffic, in that top executives' travel is often considered essential. London Biggin Hill Airport reported traffic to be around 30% of 2019 levels, with transatlantic traffic strong. Once lockdown restrictions are eased, business aviation has an opportunity to capture premium passengers who might previously have chosen airlines, but who may prefer the social distancing afforded by a private jet.
United States air charter travel strongly increased in February and March as airlines slashed schedules, making commercial flights increasingly unpredictable; however, some charter operators such as JetSuite subsequently saw a drastic drop in business as widespread stay-at-home orders took effect in April 2020.
How will we get back to "normal"?
Significant reductions in passenger numbers have resulted in flights being cancelled or planes flying empty between airports, which in turn massively reduced revenues for airlines and forced many airlines to lay off employees or declare bankruptcy. Some have attempted to avoid refunding cancelled trips in order to diminish their losses. Airliner manufacturers and airport operators have also laid off employees.
In the history of the aviation industry, the ensuing crisis is the worst ever according to Airbus' Guillaume Faury, EasyJet's Johan Lundgren, United Airlines' Oscar Munoz, Qantas' Alan Joyce, and media outlets: the Financial Times, The New York Times, or The Independent
Government regulations in Europe and the United States mandated that airlines refund fares when flights are cancelled, but in many cases airlines have instead offered vouchers or travel credits that must be used by the end of the year. (Some airlines have extended the voucher window to May 2022.) Despite pleas from industry lobbyists to expand the regulations to allow travel credits, the US Department of Transportation has reiterated that airlines are obligated to provide refunds for cancelled flights. Travel vouchers are currently allowed when passengers cancel travel plans due to travel warnings, stay at home orders and other restrictions.
Aviation sector recorded an 80% decrease in flight movements across all geographic regions, including America, Europe, Asia-Pacific and Middle East as of 4 May 2020.
Many flights from Hong Kong were cancelled in March 2020 due to the pandemic.
Early March 2020 saw 10% of all flights cancelled compared to 2019. As the pandemic progressed, 40–60% fewer flight movements were recorded in late March with international flights affected the most. By April 2020, over 80% flight movements were restricted across all regions. Research shows that world recovery of passenger demand to pre-COVID-19 levels is estimated to take 2.4 years (recovery by late-2022), with the most optimistic estimate being 2 years (recovery by mid-2022), and the most pessimistic estimate 6 years (recovery in 2026). Large regional differences are detected: the Asia-Pacific has the shortest estimated average recovery time of 2.2 years, followed by North America in 2.5 years, and Europe 2.7 years. For air freight demand, a shorter average world recovery time of 2.2 years is predicted if compared to passenger demand. On the regional level, Europe and North America are comparable with average recovery times of 2.2 years, while the Asia-Pacific is predicted to recover faster in 2.1 years.
As passenger flights were cancelled, the cost of sending cargo by air changed rapidly. The cost of sending cargo across the Pacific Ocean tripled by late March 2020.
Adjusted cargo capacity fell by 4.4% in February 2020 while air cargo demand also fell by 9.1%, but the near-halt in passenger traffic cut capacity even deeper as half of global air cargo is carried in passenger jets' bellies. Air freight rates rose as a consequence, from $0.80 per kg for transatlantic cargoes to $2.50–4 per kg, enticing passenger airlines to operate cargo-only flights, while cargo airlines brought back into service fuel-guzzling stored aircraft, helped by falling oil prices. Passenger airlines were enticed to convert aircraft.
At the end of March 2020, cargo capacity was down by 35% compared to the previous year: North America to Asia Pacific capacity fall by 17% (19% in the opposite direction) Asia-Pacific to Europe was down by 30% (reverse: -32%), intra-Asia was down by 35%. Lagging the capacity reductions, demand was down by 23% in March, resulting in higher freight rates: from China/Hong Kong, between 2 March 2020 and 6 April 2020 +158% to Europe and +90.5% to North America. By May, freight rates from Shanghai were $12/kg to North America, $11/kg to Europe.
The cargo shortage may evaporate if the global economic crisis depresses demand: the WTO forecast a global trade contraction of 13–32% in 2020.
International mail between many countries stopped completely, either due to suspension of domestic service or lack of transportation.
Business aviation was less affected than airline traffic, in that top executives' travel is often considered essential. London Biggin Hill Airport reported traffic to be around 30% of 2019 levels, with transatlantic traffic strong. Once lockdown restrictions are eased, business aviation has an opportunity to capture premium passengers who might previously have chosen airlines, but who may prefer the social distancing afforded by a private jet.
United States air charter travel strongly increased in February and March as airlines slashed schedules, making commercial flights increasingly unpredictable; however, some charter operators such as JetSuite subsequently saw a drastic drop in business as widespread stay-at-home orders took effect in April 2020.
How will we get back to "normal"?
26-30, F
