By Javed Malik
THE COVID-19 pandemic has had a profound impact across the world. As an industry that facilitates mobility and human interaction, travel and tourism has been among the hardest hit.
No one knows when we’ll see busy airports and full hotels. Globally, the aviation industry is in a coma.
The industry is now facing the most serious challenge of the post-war era as the sudden decline in activity across both advanced and developing countries has created a backdrop of higher unemployment and significant contractions in global output. The impact of the virus has also resulted in tighter financial markets with increased credit risk aversion.
Looking at the South African industry, when I see empty airports, and restaurants and shops that were shut down, that environment is akin to horror movie scenes. Air travel has fallen sharply, which has prompted airlines to cut capacity. Given the importance of airports to the development of cities, countries, and regions, the broader impact of Covid-19 on the global economy is enormous. It’s no longer business as usual; we need to keep tabs on the new ways of survival.
Before the pandemic hit, airlines struggled to boost revenue, even as they experienced increasing volumes of passengers and cargo traffic.
Over the past few years, earnings for the global airlines industry grew at a less-than-desirable pace due to unstable fuel prices, increasing competition, the prevalence of low-cost airfare and a drop in world trade.
Known for high fixed operational costs, airlines have often faced a variety of serious market challenges. Now airlines are struggling even more because this pandemic led to people getting retrenched, their salaries being cut down and working from home. This has become a familiar story.
Load factor and ticket per seat have been dropped. Survival has become very tough and we have seen one of the worst December periods. Airlines are fighting for survival in every corner of the world.
Nearly all airlines have been forced to reduce seat volumes drastically. Several airlines do not have the cash power needed to survive such a slump in demand.
Suddenly and unprepared, the once vibrant, economically attractive and viable travel industry screeched to a halt. Unprepared, and nursing economic shock, it didn’t know what to expect next.
The industry went into panic mode in the of process searching for revival or adaptive solutions.
It had to unwittingly move on and face a new world, new working demands and plans. Rules and policies changed so fast and communication almost became impossible for everyone. We witnessed what happened in December.
Travel restrictions and the cancellation of many planned visits, flights, business and leisure events were severely affecting many service sectors.
Beaches were shut down, people were forced to cancel domestic travel, and borders were closed. No one was allowed to travel from one place to another.
The new normal had ghosted in, and for the first time, travel and outdoor enthusiasts were forced to be homebound. Even the once-popular shot-lefts or domestic travel and tourism had to be forgotten or shelved indefinitely.
It dawned on us that viral pandemics have a much larger destructive impact on the travel industry and tourism industry.
Private and public policy support must be co-ordinated to sustain preCovid-19 operational levels of the tourism and travel sector.
The policies should include robust, aviation industry-friendly and specific financial windows. The journey will be long and the creation and planning of the policies have to start now.
Typically, predicting the future requires first understanding the past, the Covid-19 crisis, unprecedented and unpredictable nature, its short-term impact and likely long-term implications.
It seems that, with prolonged Covid-19 induced global travel restrictions, travel warnings and on-and-off flight services, the core of the aviation industry may still be prone to a lot of turbulence, threatening and slowing down both short and long-term revival plans, in all regions, simultaneously.
Airports and airlines must not overlook a crucial detail regarding this pandemic. Instead, they must work together as one and put competition aside as they are all suffering.
The government has to strike the balance between support for aviation and the need to preserve competition.
No one is to be blamed because the pandemic happened too fast.
As aviation companies, big or small, let’s stand together.
This is not the time to compete, but to co-operate and complement each other, since we all don’t know whether, in the next three to five years, the storm will be over or around.
I can’t even say may the best player win. All I can say is prayer and support, complemented by adaptive approaches and retention of and keeping pace with the new technology and other normal demands, diligent planning and best international practice will see us through.
Javed Malik is an avid aviator and strong advocate of transformation in South Africa , Chairperson of Cobra Aviation, a passenger and cargo operator
*The views expressed here are not necessarily those of IOL or for title sites
BUSINESS REPORT