The Future of the Aviation Industry

Apr 6, 2021

2020 has been one of the worst years of aviation history due to the COVID-19 pandemic. But the year 2020 is now behind us, and we are looking forward to a brighter tomorrow. All industries, including aviation, are putting all their efforts towards reviving the economy and resuming proper operations. According to IATA (International Air Transport Association), 2020 recorded a 65.9% drop in global passenger traffic, which is by far the sharpest decline the aviation industry has yet experienced.

How has COVID-19 affected the aviation industry?

“Last year was a catastrophe. There is no other way to describe it. What recovery there was over the Northern hemisphere summer season stalled in autumn, and the situation turned dramatically worse over the year-end holiday season, as more severe travel restrictions were imposed in the face of new outbreaks and new strains of COVID-19.” said Alexandre de Juniac, former Director General and CEO of IATA.

Bookings in January 2021 are still down by 70% compared to a year ago, and according to IATA’s press release on February 3rd, 2021:

“IATA’s baseline forecast for 2021 is for a 50.4% improvement on 2020 demand that would bring the industry to 50.6% of 2019 levels. While this view remains unchanged, there is severe downside risk if more severe travel restrictions in response to new variants persist. Should such a scenario materialize, demand improvement could be limited to just 13% over 2020 levels, leaving the industry at 38% of 2019 levels.”

The drastic drop in demand for passenger air transport threatens many aviation-associated companies’ viability, with many jobs at stake. Aircraft manufacturing, leasing services, and the refined petroleum sector are only a few of the industries intertwined with the aviation industry. 

What is the future of the aviation industry?

Generally speaking, the aviation industry faces two obstacles in the future. Firstly, the costs related to health measures, and secondly, the revival of the demand for international travel.

Operational costs for the aviation industry will likely increase significantly, both concerning the carriers and the airports. For instance, mandatory health measures such as disinfection, masks, viral tests, and temperature checks all bear a high cost for the industry. Not to mention that social distancing measures could force the airlines to fly at only 50% passenger capacity. 

In terms of demand revival, it will largely depend on travel restrictions around the globe. Some countries are slowly opening borders, while others are shutting theirs down again. Additionally, the consumer trends are a little bit difficult to predict at this point. There’s a massive division between those who cannot wait to pack bags and check-in at the airports again and those who err on the side of caution. All things considered, it’s hard to imagine that the demand will return to pre-crisis levels, even as international travel restrictions ease.

It was hard for us to envision the havoc that this pandemic would wreak on a global scale. Even those who have been warning us about an impending catastrophe could not have predicted when, where, or how it would strike. It’s just as hard for us to predict what the world will be like after it. Will everyone be wearing masks indefinitely? Will vaccination become compulsory? Or will it cause a divide between people? Will people travel for business and leisure, or will we limit ourselves only to mandatory traveling? No one knows the answers to these questions. 

“Optimism that the arrival and initial distribution of vaccines would lead to a prompt and orderly restoration in global air travel have been dashed in the face of new outbreaks and new mutations of the disease. The world is more locked down today than at virtually any point in the past 12 months…[…]…We urge governments to work with industry to develop the standards for vaccination, testing, and validation that will enable governments to have confidence that borders can reopen and international air travel can resume once the virus threat has been neutralized. […] In the meantime, the airline industry will require continued financial support from governments in order to remain viable,” added Juniac who has since been replaced by Willie Walsh as Director General.

The hidden gem 

The good news is that the COVID-19 pandemic has pushed many industries towards digitalization and made evident the harm we are causing to planet Earth. Images of famous landmarks worldwide pre- and post-lockdowns have shocked many of us, making sustainability a priority. Major efforts have been made by the airline industries as far as digitalization and sustainability go. The pandemic has provided an opportunity for everyone to reassess and refresh a set that was previously severely lagging.