OPINION: Aviation sector after Covid-19
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By Javed Malik
The past few years in the South African aviation sector the industry thought it had seen the worst of times, but after this Covid-19 pandemic, nobody knows how to handle the challenges ahead. The aviation and leisure sector is one of the hard hit sectors in the world.
Covid-19 has had a huge impact on the aviation industry due to travel restrictions and a slump in demand among travellers. We witnessed many airlines forced to cancel flights, severely reducing revenue.
This has forced many airlines to close down and retrench almost half of their work force. Other airlines have declared bankruptcy or gone in to business rescue.The question that remains in my mind is how we can survive and go through this period.
I believe we are going to start the year 2022 on the same page where we were on January 2020. Everyone is anxious about a future full of air travel business activity, but post-Covid-19 air operators in South Africa and across the globe may remain clueless of the future, further negatively impacting industry growth and expansion and the greater tourism industry.
Several things will have to be considered for the aviation industry in South Africa and internationally to bounce back, chief among them being how to reboot the low confidence and willingness of air travellers to begin to travel in large numbers.
When the situation gets back to normal, people won’t be able to fly immediately. There is likely to be an amount of undecidedness. Vigorous and widespread advertising and marketing would be needed to boost confidence among travellers.
I see a short-term outlook where most travellers are likely to take time to put their money in leisure vacations, leaving business travellers and other smaller, but significant travel niches like the government and NGOs among those most in need of travel by air.
Naturally, the three sectors’ have high and inevitable financial means or the potential to kick-start regular air travel globally.
The fact remains that in comparison with other travel niches as above stated, their numbers are only a small fraction of the overall or combined air travel figures.
This scenario will hit the aviation industry hard, forcing many players – both big and small – to remain uncertain of their future as is the current case.
It’s good to see some of the government supporting airline industries in their own countries by planning to ease out restrictions and gradually return to normality, even though aviation still looks far from recovering.
Over the past few months, governments have been providing their domestic industries with different types of financial support in the form of takeovers, relief packages and bailouts. Once again authorities left us alone like orphans to fight our own battles and they like to see how things are going to be. If we survive it’s good, if we don’t good luck.
At the same time we cannot blame the government because they have too many predicaments on their side.
Relief for the industry is the key for goodwill building, job retention and creation of a sense of belonging while ensuring help to the South African economy to remain stable and also influence the development of related and other industrial sectors down the line.
Needless to say that the aviation industry always welcomes and values government interventions at the policy level, bringing confidence and pride to the broader air transport and tourism industry.
During the pandemic most people in the industry have been forced to focus on their welfare, never mind that of others. Concern for what tomorrow holds for each one has become central to how decisions are taken, therefore, putting the collective principle on hold or in danger.
Lockdown is the time to find ways on how best to maximize aviation industry potential and growth. Questions likely to be asked by aviation industry experts and others would likely be like these: What does the future of aviation look like given the current status quo of the global economies? How far should insurance schemes for the aviation sector go to embrace the outcomes of diseases such as Covid-19 in the future? What about relief for the sector, in particular here in South Africa were currently no plans exist to capacitate airlines and key workers?
My fear, perhaps shared by others, is that the negative trend may continue in to the near future. This, despite the aviation sector year-in-year-out receiving millions of rands poured in by the government and private investors, a reality that always amuses me.
Loads of money is being lost annually and the industry’s long-term operational capacity remains unclear.
Besides the current health crisis, the other situations causing the South African aviation sector to struggle is the selling of seats when airlines are not making money, high interest costs on loans, volatile and crazy dancing fluctuating US dollar impacting fuel price, insufficient revenue and cash generation in relation to operating cost.
We pray that the South African skies will once again get busy with passenger air activity in contrast with the current situation where there are more cargo flights engaged in essential interventions.
Precaution must, however, be taken going into the future and shouldn’t blind aviators from any opportunities and possibilities that could exist, now or in the future.
It is also important for South Africa to open leisure travelling with precautions as soon as possible, even though it’s going to be difficult to attract leisure traveller and tourism.
In the end, the future of South African aviation will be determined with the right and positive thinking and perhaps above all, decision-making, keep praying and bringing more abilities.
Let’s all do all we can as individuals and stakeholders of the aviation sector and the rest of the community at national and provincial levels to flatten the Covid-19 curve and help our passenger flights back to serious business. Together we will win the war against the current pandemic and the economic downturn.
Javed Malik is the chairman of Cobra Aviation Group.