Grounded: Will global aviation emerge stronger?

BY DAVID ONJILI

In 2017, according to the International Civil Aviation Authority (ICAO) airlines transported an estimated 4.1 billion passengers globally. In the same year, 56 million tonnes of freight were airlifted on 36 million commercial flights. ICAO had projected that by the year 2036 aviation would generate 15.5million direct jobs while adding $1.5trillion to the global Gross Domestic Product (GDP). Factoring in the impact air travel has on tourism, more jobs would be created globally in the same period and more monies added to the global GDP.

With such impressive forecasts, the future of aviation has always looked bright despite a number of airlines suffering financially. Then the Coronavirus pandemic hit the world and as at March 2020 most commercial flights globally had been grounded plunging the industry into uncertainty. 

Does the future for aviation remain bleak? What previous lessons can we draw from other global disasters to help us forecast the future for the industry?

Adjustments

As at March, Emirates, Delta, American, Qatar, RwandAir and Kenya Airways amongst other major world airlines had grounded most of their airplanes. To illustrate the severity of the pandemic, Heathrow Airport closed one of its two main runways. Heathrow is the world’s busiest twin runway airport, with an estimated 1300 daily flights. This was unprecedented in world aviation, not even the terrorist attacks on the World Trade Centre in New York in 2001 could compare.

Premature goodbye to the Queen of the skies

The iconic Boeing 747 jets finally made their last passenger trips by their respective airlines, Qantas and KLM of Australia and the Dutch respectively. While the Qantas had planned to retire them at the end of this year and KLM in 2021, they both flew them commercially for the last time on the same date in March to mark the end of a nostalgic era for the Queen of the Skies.

With most travel cancelled due to the pandemic and airlines hard pressed on cash, it was tough to sustain the four-engine fuel-guzzling plane with an estimated 400 passenger capacity. This is especially uneconomical when there are more fuel efficient planes with an almost similar capacity in the skies like the Airbus A350 and the Boeing B777.

Airbus have not been spared too, their double decker Airbus A380 has stopped being produced and most airlines flying them have grounded the planes due to the high cost of both flying and maintenance.

Crude oil prices

April 20, and the price of crude oil traded below zero value for the first time in history. This drop by more than a third in value illustrated how the demand of oil had dropped in the period of the coronavirus pandemic. Whereas most airlines engage in future oil contracts, the existence of very low fuel prices in the last decade coupled with the production of fuel efficient planes with long range has really helped airlines maximize on profits.

The aviation industry thrives on low fuel prices and existence of fuel efficient long range planes. The kind of fuel contracts that airlines will sign for the next few months at low prices will surely come as a welcome relief in these hard economic times.

Cargo 

To mitigate on the effect of the pandemic, major carriers have transformed their passenger planes into freighters. With essential cargo like medical supplies, face masks, and ventilators needed across the globe; airlines have continued to fill this void by connecting affected nations. Ethiopian Airlines is a major beneficiary as it has transported a majority of donations into the African continent especially from the Jack Ma foundation.

National carrier, KQ, too has not been left behind, in April, they began transporting fresh vegetables and fruits to London after converting one of their Boeing 787 Dreamliners into a freighter to meet the demand. One major benefit of flying cargo to airlines is in the number of reduced crew needed in an airplane. Whereas a long haul commercial jet will need upwards of 12 crew, in a cargo plane you may need just two crew members; both pilots. This saves on costs and accommodation to the carriers while also meaning that a number of crew may just be rendered redundant in the meantime.

Bailouts

The biggest headache to airlines right now is cash flow problems. Many have openly sought for government assistance. This help will come in several forms. A government may choose to buy some equity in an airline; they may completely nationalize the airline or may give them loans.

To illustrate the severity of the crisis, whereas the European Union prohibits governments from injecting cash into any airline as they view this as enhancing unfair competition amongst airlines of member states, all caution has been thrown away during this pandemic and the Italian government has nationalised Alitalia. The Norwegian government has decided to inject $560m into their aviation industry to keep them afloat at this time.

Most African airlines save for Ethiopian were deep in debt and loss making. It explains why RwandAir had to partner with Qatar Airways so as to cushion themselves from the heavy costs of running an airline and competing effectively. Several of them like South African Airlines have already hinted at firing their staff and others have openly asked their respective governments to bail them out. The biggest downside to nationalization of airlines is the fact that it will lead to state bureaucracy in decision-making and the quality of services will deteriorate as most governments are usually inefficient and their models of business are not profit and efficiency focused.

In 2019, Thomas Cook stopped its operations and joined a number of airlines that already were struggling financially and had to go under. The aftermath of the coronavirus pandemic is going to see many airlines go out of business. This, however, will change the dynamics of the aviation industry as several aviation experts have observed.

As aforementioned, the Qatar and RwandAir merger is a typical example of what we can expect to see in the industry. Smaller airlines will be swallowed by those with better financial muscle, relieving them off the operational costs they need to remain in service. This restructuring will lead to a number of jobs being lost in a bid to eliminate duplicity of roles while others may be created

Drones 

In 2019, Kenya had banned the use of drones for commercial, photography or even medical reasons. This peculiar decision was because Parliament had claimed that there were privacy concerns and that public participation had not been done to the Bill on flying drones in the country. However, the director general of the Kenya Civil Aviation Authority (KCAA) was optimistic that the House was going to reverse the decision. With self-isolation and even quarantine being one of the recommendations by the World Health Organization as a means to help curb the spread of the coronavirus, the use of drones is just inevitable. 

Companies like Amazon are using drones to make deliveries of both food and medical equipment and supplies to the necessary recipients. Kenya cannot be left behind in this regard, drones present an exciting future for aviation, their reliability and efficiency is unparalleled and we can expect a growing number of startups to invest in them.

Business travel was one of aviation’s success main contributors, the number of organizations that allowed their staff to move across the globe for conferences and seminars brought good revenue to airlines. Yet, the rollout of the 5G internet and availability of cheap and fast connection may also eat into business travel. The covid-19 pandemic has allowed organizations to have meetings online through forums like Google hangouts and Zoom. This will be projected to continue with organizations that will be trying to remain frugal with expenses post a coronavirus pandemic economy. Airlines will need to come up with appealing offers to attract them back to flying.

Travellers are some of the biggest shoppers out here, the existence of duty free shops, eateries and restaurants all serve them. These premises capitalize on the millions of passengers using the airports. We also have taxi drivers and hotel owners who accommodate passengers. Aviation serves millions indirectly in their entire ecosystem and with flying almost grounded, many have lost their jobs.

Aviation has been at the forefront of innovation and it provides the safest mode of transport world over; transporting both people and cargo to where they are needed and promptly. The fear of the uncertain future post the coronavirus pandemic should not discourage aviators. When all this is done with, however long it takes, the skies will be back filled with traffic. Pilots will be needed, planes will need engineers and air traffic controllers will be employed. No calamity can ever kill the spirit of aviation no matter how long it takes.   

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