How Top Aviation Leaders See Future of Airline Industry

United Airlines Boeing 787-10 Dreamliner aircraft as seen on final approach landing at Amsterdam Schiphol Airport in the Netherlands, on July 2, 2020. (Photo by Nicolas Economou/NurPhoto via Getty Images) NURPHOTO VIA GETTY IMAGES

As an extension of that event, organizers held an interactive poll of 537 aviation professionals through June of this year – to give a broad look at how industry opinion is shaping up around a potential recovery from the COVID-19 crisis. Now the results of that poll have been published, and below is an exclusive first look at them.

How long do you believe it will take the global airline industry to return to 2019 total revenue levels? 

• 6 to 12 months - 7%
• 12 to 18 months - 19%
• 18 months to 3 years - 44%
• 3 years - 16%
• More than 3 years - 14%
• Don’t know – 1%

How well prepared do you believe the airline industry was for the COVID pandemic?

• Poorly prepared - 46%
• Could not prepare for such a Black Swan event - 41%
• Somewhat prepared - 12%
• Very well prepared - 1%
• Don’t know – 1%

Will the airline industry survive the COVID crisis?

• Yes, but fundamentally changed - 69%
• Yes, of course - 20%
• Will not recover as we know it - 7%
• Permanently damaged - 4%

Have global governments done enough to support the aviation industry?

• Yes, but only in some markets and regions - 40%
• Have helped, but not nearly enough - 36%
• No, absolutely not - 13%
• Yes, absolutely - 7%
• Don’t know - 5%

Which aspect of the aviation industry do you believe will recover fastest?

• Domestic Travel - 85% / International Travel - 15%.
• Business Travel - 69% / Leisure Travel - 31%.
• Point-to-point routes - 70% / Hub and spoke routes - 30%.
• Low cost carriers - 55% / Full service carriers - 45%.

Many of the results are not surprising, for instance the fact that domestic travel is largely predicted to recover more quickly than international – logical given ongoing and unpredictable border closures and travel restrictions.

The fact that 69% of respondents said business travel would recover more quickly than leisure travel, on the other hand, is fascinating – because most predictions so far have gone in the other direction. So far what we’ve seen is that leisure travel is driving much of the increase in flights this summer in Europe, for example – so it will be interesting to see what happens on that front when we get to the autumn.

Nick Careen, Senior Vice President for Airport, Passenger, Cargo and Security at the International Air Transport Association (IATA), thinks it’s too early to tell.

“Initial travel could be for leisure purposes – particularly to reconnect, or to reunite families. This is the experience observed in some countries where travel restrictions have been loosened. In the Northern Hemisphere, the peak summer holiday season may also induce some initial leisure travel, to the extent that borders are reopened and travel is possible. Such travel may not be sustained beyond this initial stage,” Careen said. 

“Indeed, for some – possibly many – the health risks will remain paramount even where the virus appears to have been contained. Leisure travellers may be reluctant to travel at all, or may seek alternative modes of travel for a period until they are confident that the health risks have diminished. Rising unemployment might also be a factor for some potential leisure travellers. These could all be reasons why survey respondents pointed to the recovery in business travel.” 

But Careen thinks eventually businesses will need to get their people out into the world, and meeting face to face, despite all the technology we have available to meet from home. 

“While businesses have managed through the crisis period with videoconferencing and other technological solutions, there is no substitute for being able to conduct face-to-face business meetings and to build professional relationships. In some regions more so than others, this is a business imperative and will be critical to restarting both businesses operations and economic activity.”

The poll also indicated that there is fairly broad agreement around how long it may take for the industry to recover to pre-COVID levels, with 60% estimating a period of 18 months up to 3 years. Though it is interesting that 26% were more optimistic, predicting it would happen by 2021 at the latest.

Joe Leader, CEO of Airline Passenger Experience Association (APEX), said that while flying remains a very safe way to get around, in order to really get the majority of people back in the air the world needs to develop a consistent and clear approach to testing air passengers.

“The United States has returned to stronger levels of air travel despite increasing COVID-19, this is because air travel remains the safest transport link, aside from one’s own personal vehicle,” said Leader. 

“Overall, we need a more consistent international air travel approach that requires passengers to show a COVID-19 negative test to prove they can travel, rather than forcing them to quarantine at the other end of their journey. Air travelers deserve certainty in exchange for their diligence and care.”

A vast majority (89%) said the industry would recover, although most of those (69%) thought it would emerge fundamentally changed. While it’s difficult to say what that will mean and how long it will take, there is a certain amount of optimism in the industry that this will be an opportunity to emerge stronger, healthier and much better prepared for future downturns.

“Outlooks and forecasts are changing day by day, and in the face of so many unknowns it’s hard to predict exactly what the future holds,” said Philip Balaam, President of Inmarsat Aviation. “This is by no means aviation’s first crisis, so we’re well versed in adapting to unexpected challenges.  Despite bracing for a slow recovery, the poll reveals a sense of optimism for the future, with only 1 in 20 respondents believing that the industry will be permanently damaged by COVID-19.”

And Balaam thinks digitalization will be at the heart of that recovery.

“The survey respondents – and many experts at FlightPlan – also predict that digitalization will drive aviation’s return to profitable growth. Learnings from other industries strongly support this view. At the turn of the 21st century, maritime faced its deepest recession since the thirties, with costs rising and revenues falling. 

Instead of hunkering down and cancelling new vessels, an industry notoriously slow at adopting technology turned to digitalization to deliver much needed efficiencies. If we can learn anything from the crisis response, it’s that digitalization can drive greater business efficiency, automation and intelligence, and deeper customer engagement.”

“While for many airlines near-term survival is the only item on the agenda, the stronger players are already planning for the reset and recovery phases ahead,” Balaam continued. “We believe that the crisis could prove a decisive moment for digital transformation in an industry that’s historically been behind the curve. Post COVID-19, we will see new leaders emerge because they took steps to enhance capabilities, some even unknowingly, ahead of the rest.”

-Forbes 

July 15, 2020