Impact of the COVID-19 pandemic on aviation


The COVID-19 pandemic has had a significant impact on the aviation industry due to travel restrictions and a slump in demand among travelers.
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. According to some commentators, the ensuing crisis is the worst ever encountered in the history of the aviation industry.

Flight cancellations

Government regulations in Europe and the United States mandate airlines to 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. 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.
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 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, with the most optimistic estimate being 2 years, and the most pessimistic estimate 6 years. 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.

Air cargo

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.
Adjusted cargo capacity fell by 4.4% in February 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 bring back into service fuel-guzzling stored aircraft, helped by falling oil prices.
At the end of March, cargo capacity was down by 35% compared to the previous year: North America to Asia Pacific capacity fall by 17% Asia-Pacific to Europe was down by 30%, 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 March 2 and April 6, +158% to Europe and +90.5% to North America.
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

Business aviation was less affected than airline traffic, in that top executives' travel is often considered as 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.

Activity

On 5 March 2020, the International Air Transport Association estimated that the airline industry could lose between US$63 to 113 billion of revenues due to the reduced number of passengers. IATA had previously estimated revenue losses of around US$30 billion two weeks before their 5 March estimate. By 17 March, IATA had stated that its 5 March estimate was "outdated", and that airlines would require $200 billion in bailouts to survive the crisis. IATA further revised their revenue loss estimate in 24 March to be $252 billion globally, a 44 percent drop. Another further estimate was published on 14 April, which forecasted a revenue drop fo $314 billion and a traffic drop of 48 percent in passenger count for 2020.
Due to the sudden and large losses of revenue, airlines began to hold out against refunding cancelled flights and tickets to conserve cash, despite government regulations. In Europe, airlines had successfully negotiated to defer some $1.2 billion in air traffic control charges.
Oliver Wyman reported that Asian airlines reduced their available seat miles by 23 percent in March 2020. In Europe, the impact of the outbreak is expected to accelerate corporate consolidation in the airline industry. According to consultancy CAPA Centre for Aviation, most airlines would be bankrupted by the end of May 2020.
Air travel demand rose 2.4 percent year-on-year in January 2020, the lowest it has been since the April 2010 eruptions of Eyjafjallajökull, though travel disruptions due to coronavirus only began in late January. By March, the number of flights had plummeted, with about 280,000 flights reported between 24 and 30 March 2020 compared to around 780,000 in a similar period the previous year. Despite a lack of passengers, regulations regarding flight slots initially compelled British airlines to fly empty planes to European airports in order to avoid losing their slots. Fuel prices dropping by around a quarter could not compensate for the fall in demand. Google Trends indicate that airline customer service departments have received the largest rise in online searches between February and March 2020 than any other customer service department over that time period.
Analysts expect airlines to reduce the size of their fleets as a result of the downturn, and point out that this could be done either by modernising fleetshastening the retirement of older aircraft and maintaining planned deliveries of new, more fuel-efficient modelsor by retaining older planes and reducing capital expenditure on new aircraft.
By mid-April, the inactive fleet ballooned to almost 14,400, over two-thirds of the 22,000 mainline passenger airliners, leaving 7,635 in operation stood: predominantly in Europe, where less than 15% are operating, than in North America or Asia ; and affecting Narrow-body aircraft less than wide-body aircraft. Consequently, demand for aircraft storage increased to the point where runways and taxiways in normally busy airports such as Frankfurt Airport and Atlanta Airport were closed to make room for storage.
In April global passenger capacity is down 91%; the ICAO anticipates 1.2 billion fewer travellers by September 2020 compared to a typical year, a revenue fall of $160–253 billion for the first nine months of 2020.
While European airlines owe $10 billion for cancelled flights, IATA is predicting a 55% fall in revenue compared to 2019, a $89 billion hit, costing $452 billion on the wider economy.
Boeing anticipates passenger traffic recovering in two to three years to 2019 levels, but expects production to take longer.
The Airports Council International estimates 4.6 billion less passengers in 2020, down from 9.1 billion in 2019.
The IATA expects RPKs to be down by half from 2019 except in North America, down by 36%; for $314 billion lower revenues, a 55% fall.
The association forecast air travel to lag economic recovery by up to two years: air traffic in 2021 would still be down by 24% from 2019, and a return to 2019 levels would happen by 2023-2025.
By June 2020, the IATA was projecting a collective net loss of $84.3 billion yearly for Airlines, worse than the $30 billion loss during the financial crisis of 2008-2009, and projects that income will remain negative through 2021.
By mid-April, 14,500 mainline airliners were stored, leaving 7,400 active: one third of the whole fleet, even one fifth for European Carriers; down from 20,200 in active service and 1,800 in storage before.
By mid-June, 10,500 were still stored while 11,500 were active, with an average daily utilisation down by 35% from 2019; led by Asia-Pacific airlines with almost 75% of the fleet flying, then North America with a 50/50 split, then Europe with one third still stored.
Major airliner deliveries dropped from a typical 90-100 aircraft a month to an average of less than 40 in the first half of 2020.

By sector

Airlines

Aircraft manufacturers

As demand plummeted, values fell 2% to 22% between January and May 2020 for five-year old aircraft, and lease rates by 4% to 26%.
The use of aeroplanes by travelers has been implicated in the spread of the coronavirus. The World Health Organisation noted that "Transmission of infection may occur between passengers who are seated in the same area of an aircraft, usually as a result of the infected individual coughing or sneezing or by touch". Amidst the coronavirus pandemic, some individuals have purchased discounted airline tickets in order to travel. Some people, including those belonging to Generation Z, as well as Millennials, attended spring break celebrations despite warnings to remain at home. A multitude of young adults have tested positive for the coronavirus upon returning from spring break celebrations; among those from Texas vacationing in Cabo were forty-four positive persons.

Hazard controls

According to the U.S. Centers for Disease Control and Prevention, if a person becomes sick on an airplane, proper hazard controls to protect workers and other passengers include separating the sick person from others by a distance of 6 feet, designating one crew member to serve the sick person, and offering a face mask to the sick person or asking the sick person to cover their mouth and nose with tissues when coughing or sneezing. Cabin crew should wear disposable medical gloves when tending to a sick traveller or touching body fluids or potentially contaminated surfaces, and possibly additional personal protective equipment if the sick traveler has fever, persistent cough, or difficulty breathing. Gloves and other disposable items should be disposed of in a biohazard bag, and contaminated surfaces should be cleaned and disinfected afterwards.