Background
The aviation sector is a big player in global trade, logistics, economy, transportation and human safety, and evacuation operations. It is at the heart of global logistics, economic growth, and sustainability. The sector is also one of the most stricken domains in the global economy. Currently, the COVID-19 pandemic has shaken the global economy, and air transport remains one of the most affected sectors. The unprecedented decline in domestic and global passengers has been the biggest hit on the domain, prompting airlines to take dreadful actions. Air transportation players were forced to make tough decisions to avoid losses and cope with the pandemic’s effects while striving to remain in business. The future of the global aviation domain is subject to the pandemic containment and mitigation measures put in place by governments worldwide. The rejuvenation of the sector is predominantly reactive and might take a long time to bear fruits.
Role Of Airlines In The Spread Of COVID-19 Pandemic
The COVID-19 pandemic is by far the most devastating challenge facing the planet in the twenty-first century. It has affected over 200 million people and claimed over 4 million lives worldwide (Dube et al., 2021). Some parts of the globe have been affected more than others, and so did the airlines. The effects of the pandemic cut across all disciplines and domains of human life, and the consequences are foreseeably long-lasting.
The COVID-19 pandemic was first reported in China and spread globally, striking fear, economic recession, and loss of lives. Due to the pandemics’ ability to claim lives, China was compelled to impose a total lockdown on Wuhan, which impacted all economic activities. The lockdown was imposed after the government stopped airline services in and out of Wuhan. Global aviation services were continued in other parts of the country, which was responsible for the global spread of the coronavirus. Due to their convenience and speed, Airlines played a key tool in evacuating nationals from China and other heavily infected countries. Because the COVID-19 is an invisible enemy, the evacuation process significantly contributed to the further spread of the virus in every other country on the planet. The full-blown resumption of air travel operations should be carried out cautiously to avoid similar repercussions on the aviation domain in the future.
What Can The Airlines Do Resume Normal Operations
Airlines play a significant role in national economic development, growth, and pride like any other investment. Most airlines are state-owned corporations that are heavily subsidized by taxpayers’ money to remain competitive. The effects of the pandemic on the global aviation sector are not going away any soon, and the airlines must be prepared to face the challenging times ahead. International efforts to curb the spread of the virus have been employed globally. They include enforcement of COVID-19 containment measures, and the development of vaccines has seen the world ease the effects of the virus. Governments also provided stimulus cheques to their citizens to ease the cost of living. As a result, some countries have slowly embraced the resumption of sports, international events, and full-blown reopening of economies.
Firstly, airlines should shape their financial and marketing strategies to service in the constantly competitive business environment. The cost of doing business is a significant determinant of overall success. High costs of operations coincide with low revenues is a time-ticking bomb that could push airlines into financial crisis and subsequent collapse. The cost of operations constitutes several employees, fleet, cost of jet fuel, and other fees which are directly funded from the airline accounts. Most airlines generate revenue from passenger tickets. However, the number of global and domestic passengers has significantly decreased due to the current economic recession. As a result, airlines need to take agreeable retrenchment measures to reduce the operation costs.
Most airlines operate on hired planes which might not be economically viable during this pandemic time. The aircraft owners expect the airlines to honor their partnerships’ terms and conditions, subsequently pushing the airlines into a financial crisis. The airlines should renegotiate the lease terms with the aircraft owners to reach favorable conclusions in such scenarios. It could include lowering the monthly or annual fees or even returning the planes to the owners.
The presence of several domestic and intentional carriers operating in the same hubs poses great competition to airlines. For instance, major international hubs such as New York, London, Dubai, Tokyo, Shanghai, Manila, and Singapore also provide domestic flights. International airlines tend to provide cheaper and more luxurious services, posing a great threat to local competitors. Such scenarios call for innovative marketing strategies, investment charters, and the provision of high-quality services to customers. Most airlines will need to lower their fares both locally and internationally to attract more customers. However, the resolution should not be blindly taken as it could result in unexpected losses. The airlines should also focus on specific routes that attract huge volumes of passengers and present them with affordable deals.
During the pandemic’s peak, most airlines were forced to lay down staff to minimize unnecessary expenditures. In this context, the airlines need to keep a close eye on the rate at which global travel and businesses resume and harness the power of every available resource. The airlines should focus on recruiting high-performance taken among the crew. Employee skills are an essential tool that can be used by airlines to attract and retain customers. The management of airlines is an essential resource that can be harnessed to help resume normal operations. The management personnel is tasked with making executive and operational decisions that directly influence the performance of the airlines and resumption to normalcy. The airlines should recruit skilled and innovative leadership to oversee their management and investment plans of the airlines.
Global political relationships between nations highly influence global aviation routes and destinations. The airlines might threaten the lives of their crew or passengers while flying some airspaces or landing in some destinations. They should liaise with their home governments to ensure an amicable diplomatic relationship exists between the states. For example, there has been significant tension among some nations in the middle east, which has seen some airlines banned from flying in some air spaces. Such tensions have far-reaching consequences on the performance of state-owned airlines and could subsequently result in huge losses or even the collapse of the airlines.
Domestic and international flights are highly influenced by holidays and seasons. Airlines can take advantage of the seasons and other significant events to attract more customers with lucrative travel deals. For instance, the Muslim communities travel to the holy cities during the Dhu’al-Hijjah. Intentional airlines can take advantage of this season and celebrations to raise more revenues. Although most international events have been held remotely, the world is slowly adapting to the new norm, and such events will resume physical meetings soon. Domestic flights can also exploit the same opportunities in other parts of the world to boost their operations.
Challenges To The Resumption Of Airline Operations
The COVID-19 pandemic is likely to haunt the global economy for a very long time. The emergence of new coronavirus variants poses a significant risk to global health in the future. It means the variants might force governments to impose more containment measures, consequently challenging the rate of economic growth. The spread of these new variants in third-world countries has provoked a harsh reaction from the developed countries, especially in the western hemisphere. The British government has been at the forefront in banning visitors from various countries worldwide, even after vaccinating a large percentage of its population. It is and might remain a significant blow to national airlines of the affected countries. It is also a great challenge to all other service providers connecting through any major hubs in black-listed countries. For example, the Jomo Kenyatta International Airport in Nairobi, Kenya, is the major international hub in eastern and central Africa. The ban of passengers using the Kenyan Airspace from entering Britain risks every other airline connecting through Kenya.
Competition among airlines is not something new and is projected to remain a major challenge for several decades to come. Competition is at the heart of any business and determines whether one succeeds or falls out of the business. While global aviation companies make risky decisions to remain afloat, competition is likely to be a major problem and could consequently paralyze their operations. The global economy is not yet fully recovered, and the need for domestic and international flights remains low. Most airlines remain still face the challenges of low economic recovery and competition from other dominant airlines.
The unpredictable fluctuation in global oil prices has always been a major barrier to expanding aviation services locally and internationally. COVID-19 affected the demand for global oil supplies, which in turn resulted in low oil prices. As businesses resume normal operations, oil prices are expected to rise, impacting the aviation sector’s cost. The prevailing change in prices has seen airlines increase or decrease fares between destinations. The changes affect the passengers’ ability to afford air tickets between designations, prompting them to opt for other means of transport. Fuel prices are also subject to local and international taxation tariffs, which might disadvantage some airlines, forcing them to avoid certain destinations.
The success of an operation is not assured to any airline or business organization whatsoever. The management of airlines is the driving force towards the success or failure of the airlines. For instance, when the COVID-19 was declared a global pandemic, many airlines grounded their fleet, while others took decisive risks and continued to generate revenue by transporting essential equipment globally. The management of airlines is likely to be the bottleneck to their operations and success. The airline companies should embrace management who focuses on liquidity and raising revenues while redrawing the company budgets on major processes and projects.
The Chinese and New Zealand airlines are the most successful airlines at the moment. Their managements were keen to focus on global cargo services, which made them remain profitable. Although the airlines do not operate as they did before the pandemic, they provide a distinctive reference point for other airlines worldwide. Airlines’ cooperation and governments, adherence to regulatory advisories, and the providence of cash incentives to passengers have also seen the airlines thrive. The approach can be embraced by other airlines to resume operations and raise revenues.
Reference
Dube, K., Nhamo, G., & Chikodzi, D. (2021). COVID-19 pandemic and prospects for recovery of the global aviation industry. Journal of Air Transport Management, 92, 102022.