Introduction
Air transport is a small sector, but it has a significant effect on the Gross Domestic Product (GDP). The aviation industry, including airports and aircraft manufacturing, is a crucial enabler of many economic activities. The COVID-19 pandemic has adversely impacted various sectors of the economy because it was unexpected. There was a sudden drop in demand, reaching a record 90% for this form of transport due to the coronavirus disease (Schmidt). The virus’s containment measures further threatened the viability of this industry. The sector had previously faced many threats, including terrorist attacks, airline deregulation, and the oil embargo, but this global coronavirus pandemic has been the most severe. Many airlines and related firms have had to shift to low-cost models with the aim of reducing their expenses while trying to remain operational in the wake of this epidemic. Many other industries, such as hotels and tourism, have also experienced financial crises due to the pandemic. Although other sectors have been affected by the epidemic, the aviation industry’s labor relations have been hit the most, causing massive job losses and record-high unemployment rates.
Main body
The aviation sector has faced uncertainty shocks due to the current global pandemic, with reduced profit margins and high losses. The number of passengers being ferried was reduced to almost a third of standard capacity because of the World Health Organization’s guidelines regarding physical distancing protocols as a way of preventing the spread of the virus (Bauer and Weber 4). This health measure implied that airlines would struggle financially, which would mean lowering their significant expense; salaries for their labor force. At times, some carriers were forced to close down their operations because they would not be able to cope with the crisis. On the other hand, some resorted to only making domestic travels to remain active in the market. Either way, most firms related to the aviation sector were undergoing financial crunches, some of which closed down entirely while others have since recovered from the fiscal crisis. Therefore, the air travel industry will have to work under catastrophic circumstances at least until a lasting solution to the pandemic is found.
Moreover, the aviation industry has had to reduce the number of employees, skilled and unskilled, due to the pandemic, resulting in increased job losses. For example, in Germany, there was a 28% unemployment rate in the sector by the end of the second quarter of 2020 (Bauer and Weber 2). Most airlines had to lay off-air hostesses and some pilots in order to avoid incurring more costs through the payment of salaries to many employees. Additionally, those retained had to accept pay cuts to continue working with the carriers (Mandal et al. 12). For this reason, this pandemic has led to complete and partial unemployment in the aviation industry, causing adverse consequences to many livelihoods.
The G7 economies have also not been spared by the coronavirus pandemic. According to the UN’s International Labor Organization, the global outlook is not positive, and around 1.6 billion semi-skilled workers in the aviation industry could have their living standards immensely affected (Kretchmer). Apart from these, over half of the airlines’ employees could lose their jobs by the end of the year 2020 (Kretchmer). Unemployment Trends in the G7 economies are showing worrying patterns. For example, in the United States, over 4 million people have made unemployment claims, and almost half of them are from the aviation industry, and the Congressional Office anticipates 15% of workers could lose their jobs by the end of the year (Kretchmer). Canada has also experienced airline workplace closures due to the global coronavirus pandemic. According to Kretchmer, more than 7 million people in the aviation sector have applied for emergency unemployment help. The United Kingdom, Japan, France, Germany, and Italy have experienced similar trends too. Therefore, the COVID-19 pandemic has affected the G7 economies and caused a massive loss of jobs, thereby adversely affecting aviation labor relations.
The unskilled and semi-skilled airline employees in the United States face a higher risk of losing their jobs by the end of the year. In the past years, this sector has faced many crises, but the coronavirus pandemic has had more rapid and severe consequences (Sobieralski 4). The travel restrictions and other containment measures and guidelines set by the World Health Organization have forced most airline firms, including transport and aircraft manufacturing, into uncertainty shocks. This situation has compelled most parts of the aviation industry to reduce their operations, meaning massive job losses. Of those employees that have been affected, the unskilled and the less skilled ones have suffered the most. For example, many of those workers who deal with passengers’ flight operations and handling have been the hardest hit (Mandal et al. 16). However, management workers have somehow been spared during this uncertain period because of the sensitive nature of their work.
One of the critical factors leading to unemployment in the aviation industry following the coronavirus disease is the interaction between economic dynamics and pandemics. According to Sobieralski, the policies aimed at containing the epidemic have led to a reduction in the consumption of the aviation industry’s services (7). A decline in demand causes a drop in the supply of the product. Since airlines have been forced to carry below normal capacity, they cannot make enough profits to enable them to continue paying all their workers. Additionally, only a few passengers are plying various routes since most of them have feared contracting the virus (Mandal et al. 17). The main reason airlines were flying below half of their average capacity was to cater for such expenses as paying for their monthly cost for airport slots. This struggle to uphold its standards amid the pandemic has led most aviation sectors to uncertainty shocks. Most of them have adopted low-cost models, including reducing expenses, by all means, resulting in massive retrenchment of their staff. As a result, a significant number of workers have lost their jobs, and their future is apparently unpredictable.
Conclusion
In conclusion, the ongoing global pandemic has had adverse effects on the aviation industry. With the travel restrictions and physical distancing guidelines as measures to control the spread of the virus, many airlines have laid off most of their employees because they cannot pay their salaries. Moreover, the way the infection spreads has made people avoid traveling for the fear of contracting the virus. The result of this is a reduction in the demand for the services offered by the airlines, and some of them have been forced to carry below their average capacity. The measures have led to financial crises in the aviation sector. The hardest-hit employees are the unskilled and the semi-skilled, who mostly deal with flight operations and handling of passengers. Therefore, many industries have been affected by the pandemic, such as hotels and tourism, but the aviation industry has been hit the hardest, resulting in the downsizing of its labor force in many departments.
Works Cited
Bauer, Anja, and Enzo Weber. “COVID-19: how much unemployment was caused by the shutdown in Germany?” Applied Economics Letters, 2020, pp. 1-6.
Kretchmer, Harry. “How Coronavirus Has Hit Employment in G7 Economies.” World Economic Forum, 2020, Web.
Mandal et al. Prasad. Unemployment of Unskilled Labor Due to Covid-19 Led Restriction on Migration and Trade, 2020.
Schmidt, Sarah. “Airline Industry in Crisis Due to the COVID-19 Pandemic.” Market Research Blog, 2020, Web.
Sobieralski, Joseph B. “COVID-19 and airline employment: Insights from historical uncertainty shocks to the industry.” Transportation Research Interdisciplinary Perspectives, vol. 5, 2020, pp. 1-9.