Has COVID-19 infected international travel for good

Has COVID-19 infected international travel for good
Has COVID-19 infected international travel for good

The impact of the coronavirus on the aviation industry will transform global travel in myriad ways.

Highlights:

  • The coronavirus pandemic is causing a massive strain on the aviation industry due to restrictions on travel.

  • In India, the biggest impact will be felt by state-owned Air India.

  • A series of interim solutions are being looked into by governments around the world to try and keep grounded airlines afloat and save the cash-poor ones from bankruptcy.

The one standout outcome of the coronavirus pandemic, which continues to wreak havoc around the world, has been the grounding of airlines in swift succession as countries began closing borders in an attempt to get some sort of a grip on the rapidly spreading outbreak.

Overnight, the concept of a globalised world where booking a flight to a remote, or not-so-remote, destination was one of the very basic activities of our daily lives suddenly ground to a halt in a world in lockdown. Airlines, many of them already under considerable strain in an increasingly carbon-footprint-conscious world, were hit with a crisis like never before - far worse than the 2008 financial crisis, the 9/11 New York terror attack and even the SARS epidemic in 2003, which at the time had seemed like the worst kind of global health crisis.

Bad timing

In India, which grounded all international flights until at least mid-April in its fight against the deadly virus, the biggest impact will be felt by state-owned Air India. The national carrier was in the midst of a second, more hopeful, round of privatisation after the civil aviation ministry took the call to sell off not just a percentage of the airline but put up the entire chunk for sale in an effort to revive its loss-making fortunes.

The government has extended the deadline for preliminary bids amid the ongoing crisis, but the COVID-19 impact would mean that any investors seriously weighing up a buyout will now expect a considerable price cut. Meanwhile, the government will have to continue to bear the brunt of additional costs as it shores up the airline with interim funding.

While the passenger numbers have completely dried up, some of Air India's fleet will remain airborne as it is among the many international carriers being deployed for airlifting travellers stranded away from their home countries as a result of the worldwide travel clampdown.

Interim solutions

A series of interim solutions are being looked into by governments around the world to try and keep grounded airlines afloat and save the cash-poor ones from bankruptcy. The Federation of Indian Chambers of Commerce and Industry (FICCI) recommends in its cross-sector COVID-19 report that the governments must step in with some relief in the form of waivers and grants. The report notes: “Globally, many countries are giving special packages for the aviation sector. “As this is a Force Majeure event, as pronounced through government notification, payment of Annual Fee to AAI [Airports Authority of India] can be waived till the event is revoked with further notification.” It also recommends possible grants to recover fixed cost and increased operating expenses.

Long-term impact

However, experts across the world over warn that, ultimately, governments constrained with prioritising immediate health and livelihood costs may not be able to save each and every struggling airline. According to Paul Charles, Founder and CEO of The PC Agency travel industry consultancy, the impact of the pandemic on the aviation industry is of “seismic” proportions because of its global rather than regional nature. The truth is that some airlines will have to fail, he warns. But on a more optimistic note, he believes that the “inherent desire” among human beings to travel will eventually help revive the industry's fortunes.

Flying out of the crisis

Airline analysts believe that business travel is likely to recover quicker than leisure travel. But understandably, consumers are likely to take some time before taking up any attractive pricing offers made by airlines to try and lure back the lost traffic until the anxiety around the highly infectious nature of coronavirus dies down. Just as the 11 September 2001 terror attacks of large jumbo jets being flown into the World Trade Centre in New York transformed our security experience at airports, COVID-19 is likely to have a similar impact in the form of enhanced screenings for latent infections - at least for the foreseeable future.
Nadia Hatink is a UK-based columnist with a focus on South Asian affairs.
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