Aviation Industry after COVID

Updated: Sep 2, 2021

The Coronavirus Pandemic came with one significant feature – empty airports. The lockdown around the world meant airplanes were grounded and there were far fewer flights, limited to the most essential of all travels.

Image Source: BBC

The airline industry was significantly damaged by COVID-19 and its restrictions. Perhaps the biggest of all the challenges of the past year was the uncertainty that came with the restrictions. No one knew for sure when this was going to end. There was no way of telling when flights would be allowed to take off and when bookings could commence.

Worse of all this was the inconsistencies in opening. Authorities around the world would open-up for a few days or weeks or months, only to ground all flights unceremoniously. This hurt planning and sales for most airline companies.

In spite of all these difficulties, some trends have been picked up in the past year that can be used to position companies in the aviation industry. These patterns explain some logical sequences through which the pandemic and its restrictions could end. And they can be used to reasonably project trends in the future and make some strategic choices that will be helpful to various stakeholders.

Trend 1: Bookings are Picking Up, driven by Reunion-Themed Travels

After a year of uncertainty and inconsistencies, bookings have started picking up. Numbers are rising and this is mainly driven by travels. The average traveler will want to visit a relative they have not seen in a long time. People want to visit families and friends in distant locations. Couples want to get away and experience some break after being cooped up for too long.

Trend 2: Business Travel Has been Hit, and may Fall Further

Business travel is at the heart of the Aviation Industry. The highest paying segment of the market often happen to be business travelers who want add-on services and are most likely to pursue luxurious packages that can be written off by the companies they represent.

COVID-19 forced business executives to utilize other proven methods of communication over long distances – including videoconferencing and other forms of virtual contact. This has invariably sown a seed of doubts in the minds of business executives and most are likely to use this mode of communication until the entire pandemic is ended.

It is difficult to predict the long-term impacts of virtual contact on business travel. However, it is reasonable to note that corporate personnel are more likely to rely more on online communication in the foreseeable future and less on business travel. This means business travel will be reserved for the most essential and most significant activities in the future.

Trend 3: Tourism and Vaccine Regulations

Tourism could have been boosted significantly with a vaccine passport regime that was regulated properly. However, this process is still ongoing and there is some kind of dilemma about whether to go along with it and bear the cost or wait till this ends.

This kind of “ball-watching” has defined the entire period of the COVID-19 Pandemic. Many stakeholders and regulators feel impeded by the fact that this is temporary and will pass away. Therefore, they drag their feet in seeking significant solutions for events related to particular highpoints of the pandemic.

At the same time, issues and problems continue to persist. What might happen would be an airline-led solution to the problem of vaccine checks and vaccine passports. This is mainly due to the fact that governments are normally slow to react to such needs. Hence, the airline industry itself will have to convene to find solutions to this problem.

In the meantime, airlines are left with nothing, but pragmatic solutions in a contingent manner. This will mean using a firefighting approach to detect opportunities for change and follow the path of least resistance to acquire tourism-based clients.

Trend 4: Confidence restoration must be Collective

Airline companies will ultimately have to collaborate and work together to restore trust in the airline industry. This will require airlines and other entities to work together in a concerted effort to secure air-travel and render it COVID-free. In this quest, companies will have to cut down on their rivalry and seek a common solution in resuming flights and providing guarantees to different stakeholders.

Strategic Implications

“Perfect” is the enemy of “good”. The pandemic has been portrayed as a major disaster that must be resolved in totality before vital industries like aviation can be opened-up. This has led to blanket and totalitarian bans and restrictions which appear to go against useful proactive solutions that will keep the aviation industry in motion. Some sectors like business travel have been hit significantly and will take time to be resolved. However, other sectors like family and individual themed travels as well as tourism could be resumed with some pragmatic measures to ensure passenger safety at this time of the COVID-19 Pandemic. Collaboration and cooperation among key stakeholders in the aviation industry can help commence travel for some segments. After this, lessons can be learnt, documented and utilized to improve air travel.

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