The pandemic has wreaked havoc on economies around the world and aviation has been one of the industries that was hardest hit. Aviation is often a bellwether for economic crises and is frequently one of the last segments of the economy to recover in good times. It looks like that might be the case for the pandemic as well.
Aside from the usual problems that aviation faces in a bad economy, the pandemic introduces others as well. Demand for air travel is much lower than normal because few people want to sit in a crowded metal tube for hours on end during an infectious disease crisis. Travel restrictions especially for international flights, have further reduced demand.
As bad as things are now in the aviation world, it was worse a few months ago. In late March and April, few planes were in the air but those who did venture aloft had to consider the possibility of ATC Zero, when outbreaks at air traffic control facilities often meant that entire segments of urban airspace became uncontrolled for hours at a time until the facility could be sanitized or backup facilities could take over. There were scattered instances of ATC Zero around the US, even in New York, the busiest airspace in the country.
ATC Zero means that adjacent sectors will stop or greatly slow the flow of traffic into the affected areas. This in turn means that inbound aircraft have to enter holding patterns and possibly divert to alternate airports. This, in turn, disrupts airline schedules and inconveniences passengers.
In the US, the federal government required most airlines to keep flying during the pandemic, even if they were flying empty, but many foreign carriers simply parked their unneeded airplanes and canceled flights. One enterprising airline in Taiwan offered virtual flights during the crisis since they couldn’t fly internationally.
China Airlines, based in the Republic of China (i.e. Taiwan), offered passengers a virtual travel experience reported Forbes. Passengers could book a trip to nowhere on the company’s Airbus A330 which includes a trip to the airport with check-in, security screening, and customs checks. Passengers then boarded the plane and were treated to “in-fight” snacks, a trivia quiz, and a water cannon salute by airport fire trucks.
If getting all dressed up with no place to go sounds like a horrible experience that combines the worst of airline travel with none of the good stuff (except the water cannon salute) then Eva Air, a competitor of China Airlines, has another option. The company offered a three-hour sightseeing flight over the north coast of Taiwan and the Japanese Ryukyu Islands. The $183 coach ticket includes an in-flight meal by three-Michelin-starred chef Motokazu Nakamura.
China Airlines does offer its own airborne round-robin trip as well. A flight package aimed at children teaches kids to be cabin crewmembers. The fantasy flight includes a training course, the chance to wear airline uniforms, and a two-hour trip around Taiwan.
Other airlines are dealing with the slow period by shifting their business from hauling people to hauling boxes. There are many dedicated freight-hauling airlines but even major passenger carriers often run a side business flying cargo. Now, with few passengers to fly, some companies are converting their empty people-haulers into cargo transports.
Called the “COVID combi,” converting passenger liners to freighters made a lot of sense for companies trying to stay afloat in a worldwide shutdown. While there is little demand for passenger travel, a lot of cargo is still being moved around the world by air. Some companies went so far as to remove seats and interiors to allow large shipping containers to be secured to the floor in cabins, but Lufthansa merely belted boxes into passenger seats. Airbus created a formal process for the conversions back in March.
The COVID combis got their start with Asian airlines such as Cathay Pacific but domestic airlines adopted the strategy as well. American Airlines operated its first all-cargo flight in 25 years in March and plans to operate 1,000 cargo-only flights in September. Delta and United have ramped up their cargo operations as well.
Unfortunately, the boost from cargo has not been enough to overcome the loss of passenger revenue and demand. Airlines have been parking airplanes left and right and some entire fleets will never fly again. American Airlines accelerated the retirement of five fleets, including its Boeing 757s and 767s. British Airways and Qantas retired their 747 fleets with the last Qantas 747 drawing a kangaroo in the sky on its farewell flight. The retirement of the Airbus A380 fleet is looming after only 15 years in service as the world says goodbye to widebody jets. US airlines are expected to retire as many as 1,000 airplanes.
There is already a long list of airlines around the world that have gone out of business due to the pandemic. The list includes several US-based airlines. Miami Air International, a charter operator of Boeing 737s that depended heavily on the similarly ailing cruise industry and two regional feeder airlines, Trans States and Compass Airlines, have closed their doors permanently and left their employees jobless.
Surviving airlines are preparing to lay off employees. The Paycheck Protection Program expires in September for American companies. When it does, participating companies will be free to lay off unneeded workers. CBS News reported that US airlines are poised to furlough some 80,000 workers if Congress does not act to extend the PPP. That number includes pilots and flight attendants as well as ramp workers, baggage handlers, gate agents, and others.
The job losses will extend beyond the airlines as the world economy stagnates. Corporate airplanes are often the first thing to go when a company experience financial hard times, and, although many travelers would prefer to fly private jets than airlines during the pandemic, charter companies are finding that fewer people have the wherewithal to hire a private plane.
Aircraft manufacturing is also being hit hard. Both Airbus and Boeing are reporting numerous canceled orders from airlines that no longer need new planes. Boeing also has to contend with a flood of cancellations for its star-crossed 737 Max 8. Airbus is cutting 15,000 workers while Boeing has plans to furlough a similar number.
There is no way to know how long the aviation industry, which was booming only six months ago, will be in decline. The one thing observers agree on is that it won’t be soon. Moody’s forecasts that passenger travel might return to 2019 levels by the end of 2023, but that is contingent upon a vaccine or effective treatment for COVID-19.
One thing to take away from the upheaval in the aviation industry, which affects the entire world and not just the US, is that Coronavirus is a global crisis. It is not a fiction crafted by the media to “get” Donald Trump. It is real, it is global, and it is devastating.
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