Impact of Covid-19 on the Aviation Sector

Corona virus disease-19 (Covid-19) has put the global

economy to the test, with air transport being
undoubtedly the hardest hit sector by the pandemic.
Containment and other movement-restricting measures
put in place to curb the spread of the virus have dealt an
abrupt and brutal blow to the whole activity. According to
the International Air Transport Association (IATA),
gathering more than 280 companies, the travel and
commercial air transport industry will have to wait until
2023-2024 before they can recover pre-crisis
performance.
IATA has presented that Covid-19 will set the aviation sector back 252 billion USD, a loss that does
not take into account future-lost earnings related to the interruption of the supply chain, the closure of
airports, the cessation of activities of aircraft manufacturers, companies specialized in aircraft
maintenance, repair and overhaul (MRO).

The actual impact of Covid-19 depends on several factors such as the duration and extent of the
pandemic, plans for de-containment and the level of passenger confidence in the airlines.

Passenger traffic will suffer a decrease ranging

between 35 and 65% in 2020. It is coupled with
new preventive measures designed to stem the
spread of virus inside the planes, particularly the
reduction in the number of passengers and
compliance with the social distancing protocol
imposed by the authorities on board the aircraft.

Other constraining factors can also affect the sector and lower its profitability, some of which are:
 the rise in air ticket prices from 50 to 100%,
 the reduced amount of cabin baggage,
 the reduction of aircraft capacities,
 the application of preventive measures to disinfect the aircraft; special cleaning processes, more
efficient air filters, etc.,
 the decline in the number of business trips,
 decreasing demand over the next three years.

As a result, many carriers have already declared themselves bankrupt, while others owe their survival
only to the intervention of their respective regulatory authority (e.g. Lufthansa, Alitalia, Air France,
KLM).

To keep costs as low as possible, airlines are also forced to drastically reduce their workforce.
According to IATA estimates, 25 million jobs in the aviation sector (including airlines, airports,
manufacturers, subcontractors, service, etc.) are threatened worldwide.
Aircraft manufacturers
Boeing and Airbus, the two main aircraft manufacturers, are also in shambles, with their production
rate being lowered and purchases brought to a standstill. According to a study, the drop in orders
would be between 40 and 60% over the next five years and would affect long-haul aircraft mainly.
Collateral victim of the crisis, the British manufacturer of aircraft engines Rolls-Royce is also
struggling. The engine manufacturer plans to cut 9 000 jobs, or 17% of its workforce.
Aircraft grounded and airports overstretched
Covid-19 appeared when airport aircraft parking lots were already overwhelmed by the immobilization
of hundreds of Boeing 737 MAX aircraft due to a technical defect. The Coronavirus pandemic has
actually compounded an already worrying situation. The financial burden of storing aircraft has
become a burden for airlines and airports. More than 8 000 planes, or a third of the world's fleet with
an insured value of 164 billion USD, are grounded.
Increase in freight operations
During the pandemic, cargo operations, particularly those pertaining to medical and humanitarian
supplies, have increased. The companies found themselves compelled to reconfigure the planes to
meet this unexpected demand, in compliance with safety and navigation requirements for all types
and uses of aircraft.

https://www.atlas-mag.net/en
https://www.bbc.com/news/uk-england-london-52089046