Introduction
The impact of the Covid-19 pandemic on the global airline industry became a worldwide obstacle to proper mobility. The dramatic effects of the health issues on transport communications across the globe are affecting people internationally, even two years after the initial breakthrough of the coronavirus (Bouwer et al., 2021). Hence, a multitude of flights was canceled in an attempt to prevent the further spread of the pandemic. The global damage of Covid-19 is tangible in many ways because of the high cost of economic and social harm caused by the pandemic. International Airport Review (2021) noted that quite a few companies in the airline industry have already gone bankrupt due to the monetary strain. More air carriers are struggling with the outcomes of the pandemic at the moment because of not having the opportunity to cope with the unpredictable nature of coronavirus and its spread dynamics. It was also supposed by Nižetić (2020) that many airline operators could expect to get back on the line, but projections would be rather unstable.
The current paper represents a detailed overview of the evidence on the subject of the impact of the pandemic on the global airline industry. From mobility trends to the process of stabilization and deployment of recommendations, the paper reflects the key areas of the impact of Covid-19 on airline companies and their customers. In addition to the data from recent research articles, a number of online sources were analyzed (e.g., International Air Transport Association and the Organization for Economic Co-operation and Development). Across different regions worldwide, the effects of the pandemic on the airline industry are relatively similar (Airport Council International, 2021). It was an essential element of discussion when outlining the future of global air transport mobility and delineating the possible policy changes that could improve the state of affairs. The main objective of the paper was to provide an evidence-based coverage of the impact of the Covid-19 pandemic on airline operations around the world and come up with relevant recommendations.
Predicted Global Mobility
Based on the existing evidence, it may be practically impossible to make any clear predictions on how the global mobility map is going to look during the first years of the post-Covid-19 era. Some of the restrictions are being lifted today in an attempt to improve the reach of numerous airlines and help people reach their destinations with minimal obstacles (Strauss et al., 2020). This is a clear sign of the improvement of global mobility. Notwithstanding, the Covid-19 pandemic has had numerous consequences that caused economic constraints to transpire and leave numerous carriers completely bankrupt. In line with Wollaston et al. (2021), this is a crucial aspect of airline operations that cannot be overlooked due to an increasing need for short-term solutions. On a worldwide scale, lasting decisions may not be as effective as expected because mobility restrictions are altered in a dynamic manner due to the unpredictable Covid-19 statistics across the globe. The following several years are going to shape the future for commercial airlines and create room for updates intended to mediate the negative influence of the pandemic.
The most recent investigations on the notion of global mobility prove that the pandemic is slowly reducing its pressure on airline operations. Within the next year, the number of travelers is expected to increase by 20-25% (International Air Transport Association, 2021). The changes that have been already made to the existing mobility pathways are most likely to remain active over the course of the next few years. The transformations in how airline operators treat their mobility are necessary to set up the ground for emergency responses to unprecedented effects of the pandemic. According to the Organization for Economic Co-operation and Development (2021), the economic impact of Covid-19 also has to be included in this discussion. This happens because certain nations rely on their airline transport, as more than 70% of their GDP comes from touristic arrivals by plane. Accordingly, the biggest obstacle to improved mobility is going to be the economic backlash of health constraints and rigid transport limitations. The pandemic will leave a strong trace on the industry and occasionally cause obstacles to global mobility.
Stabilization and Recovery Prospects
The evidence presented by Airport Council International (2021) suggests that the monetary reserves available to the majority of airline companies prior to the pandemic could only be enough to maintain operations for two months or less. Speaking of the aviation industry, revenue losses of approximately $130 billion have been recorded during the first half of 2020 (International Air Transport Association, 2021). This is an important finding because it shows that the global business climate does not welcome swift stabilization at the moment. The gravity of the challenge does not unlock any specific recovery prospects and makes it harder for the government to respond to the challenge as well (Organization for Economic Co-operation and Development, 2021). For the most part, planned interventions allowed bigger airline operators not to collapse during the first year of exposure to the pandemic. With a massive cash burn at hand, the supply of products and services reached a critical mark that became the new norm under the pandemic circumstances.
Consequently, government officials across the globe became interested in broadening the horizons for their local airline industries and came up with the idea to push an agenda containing rescue packages. The global amount of resources allocated to preserve worldwide airline operations was $123 billion (Dube et al., 2021). The fixed costs policy was altered in order to allow for aid and contribute to an increase in revenues generated by aviation. According to Wollaston et al. (2021), at least 25% and 15% of the rescue package was utilized to cover the expenses in North America and Europe, respectively. Nevertheless, the cash burn rate is still too high to make any risky decisions related to industry-wide expectations (Bouwer et al., 2021). Therefore, updated policy suggestions could create enough room for a much more favorable business environment where smaller air carriers would have the opportunity to survive.
Policy Suggestions
One of the key areas where intervention is required at the moment is the reduction of aviation taxes and the implementation of reasonable tax deferrals. The airline industry could significantly benefit from this approach to restoring the business. Even if larger air carriers had the opportunity to cover their expenses and survive the pandemic, there have been numerous smaller airlines that experienced monetary constraints (Dube et al., 2021). The existing evidence also suggests that quite a few countries already benefit from similar policies where spare parts for air carrier fleet are purchased from import taxes (International Air Transport Association, 2021). A globalized approach to such policies might protect airline operators of all sizes from unexpected events similar to the pandemic. Another positive effect of this generalized tax policy would be closer communication with the government during crisis events. In the future, domestic flights with a reduced number of passengers could be paired with a jet fuel tax reduction (Maneenop & Kotcharin, 2020). In order to achieve enough stability across the industry, stakeholders and top managers will have to engage in practices that presuppose sustainability.
On the other hand, there should be so-called relief packages provided to the airline operators that suffered from the effects of a certain natural calamity or an unexpected event the most. For example, landing and parking fees could be reduced in order to make sure that the negative events do not spark a wave of unemployment or organizational discontent (Nižetić, 2020). More flexible conditions should be implemented by the government for loan access in order to help airlines protect their workforce and limit the number of potential lay-offs. In the light of the existing pandemic, unpaid leave looks like a much more effective response to the corporate challenges than complex lay-off policies. The burden of coping with the pandemic should not be placed on the shoulders of workforce members because their contribution to the local economy is immeasurable (Maneenop & Kotcharin, 2020). Low-cost carriers should rely on similar policies while also negotiating special employment support for their workers. Yet, the strength of the financial distress caused by the pandemic cannot be minimized due to plenty of carriers not being able to establish any alternative approaches to their operations.
Conclusion
Prolonged travel restrictions are causing trouble across the globe, with the aviation industry suffering from the consequences of the pandemic the most. From major downgrades to bankruptcy, there have been numerous outcomes met by air carriers worldwide. Despite the presence of response strategies, most organizations were unprepared for Covid-19, meaning that more than half of airline operators could not ensure sustainability on time. Renewed strategies of addressing operational efficiency do not seem to be a panacea as well. Therefore, the existing evidence suggests that the financial and environmental costs of air transportation represent a crucial pitfall. The latter has to be addressed if air carriers expect to make the best use of available alternatives and come prepared for another iteration of the pandemic or any other natural calamity.
A sustainable future should be created in order to promote a different approach to the industry and deploy solutions that are not contingent completely on monetary resources. This factor also hints at the idea that upcoming safety protocols should be as generalized as possible. This would allow airline operators from different countries to ensure uniformity even under pressure. Additional flexibility and transparency are required as well if air carrier companies expect to attain customer satisfaction. This would also prevent smaller airline businesses from exposure to larger debts and potential bankruptcy. Overall, it may be claimed that the situation is slowly becoming normalized, with airline operators worldwide doing everything to achieve biosecurity and restore the pre-pandemic demand for traveling by plane. The proposed measures and policy revisions will be the most effective in the case where health and safety conditions are going to remain prioritized over corporate profits.
References
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