Airlines fear travel surge might not aid fast recovery

As the $800 billion airline industry prepares to get back to the skies after being grounded for almost a year, there are concerns that the “back to business” scenario may get a little overwhelming.
The logistics of handling the deluge of passengers that will again descend on near-empty air terminals, the preparedness of pilots and other ancillary staff, maintenance and more is both exciting and scary.

Airports industry body ACI World expects a “surge” in travel demand during the second half of 2021 but forecasts that global passenger numbers will still be down some 47.5% on pre-Covid predictions for the full year.

government stimulus airline industry leaders aid coronavirus

On average, there’s a 12.6% chance that airlines may cancel or defer planned deliveries from Airbus, according to an analysis by Bloomberg Intelligence. (Image: Pexels)

Pilots in British Airways and EasyJet have been continuously training on simulators and flying the few commercial airlines that are still allowed to operate to maintain their hours and skills. Similarly, the UK’s air traffic control service NATS has been using simulators to keep its staff tuned in to what it is to direct heavy traffic after months of quiet airspace. “It is easy to deal with little traffic, we don’t need to plan for that. What we do need to plan for is if North America suddenly opened up, how would we respond to that,” said Juliet Kennedy, operations director at NATS.

In the US, not too many pilots have been furloughed in the hopes of the skies opening. United Airlines chief executive Scott Kirby said the airline made a deal with its pilot union “to maintain current flying status to enable a quicker ramp-up in capacity as demand returns”.

American Airlines adjusted its pilot training schedule and has now recalled 2,000 furloughed pilots. But the American Airline’s Pilots Union says that this has caused a training logjam for pilots who need to cover a lot of hours by April.

Captain Dennis Tajer, spokesperson for America’s Pilot Union, said the “penny-wise, pound-foolish” changes have “clogged” the airline’s training schedule. About 350 pilots have training they need to complete in April. “We have pilots that are just awaiting training, and there’s no space,” he said. “The decisions that they made to save money today may jeopardize revenue in the future,” he added. “It’s like not having enough seats at the theatre, and you open the doors. Eventually, people will go to another theatre.”

Added to this is uncertainty that has cropped up again due to a resurgence in the virus and slower rollout of the vaccines. Nobody is sure about how many crew members need to be recalled.
Also, if more flights are schedules and the passengers do not turn up, then it is not cost-effective for an already beleaguered airline. The other fear is that they might miss the bus if they do not announce the resumption of flights to destinations.

“The cost load for an airline increases as flying is restored, and well before any significant revenues may be delivered,” said John Strickland, an aviation consultant.

Some airlines are dallying about to open flights on more routes or be conservative. Ryanair’s chief executive Michael O’Leary said, “These are judgment calls, I am not a forecaster. We’ve tried to manage the business with the best information we have.”

An expected 4.7 billion drop in traveler numbers in 2021 compared with pre-Covid estimates would lead to a loss in airport revenues of more than $94 billion by the end of 2021, ACI World said. “Hopefully, the darkest days are now behind us in terms of overall passenger declines,” said Patrick Lucas, ACI World’s director of economics, during a briefing.

ACI World director general Luis Felipe de Oliveira said, “Covid-19 remains an existential crisis for airports, airlines and their commercial partners and we need support and sensible policy decisions from governments to ensure that aviation can fuel the global economic recovery.

“Aviation’s recovery will not take-off… without a coordinated and globally-consistent approach to vaccination and testing, coupled with safe and interoperable methods of sharing testing and vaccination information,” he added.

Avatar
Anna Domanska
Anna Domanska is an Industry Leaders Magazine author possessing wide-range of knowledge for Business News. She is an avid reader and writer of Business and CEO Magazines and a rigorous follower of Business Leaders.

Recent Posts

JPMorgan earnings beat forecasts amid strengthening US economy

JPMorgan earnings beat forecasts amid strengthening US economy

JPMorgan Chase, the largest bank in America by assets reported favorable results on Wednesday, beating analysts’ estimates on trading revenue. It is the first major bank to repor
12 hours ago
Grab to take Spac route for a $40 billion listing in US

Grab to take Spac route for a $40 billion listing in US

Grab, south-east Asia’s super app that provides a wide array of services from food deliveries to digital payments is planning to list in the US through a special purpose acquisit
13 hours ago
Babcock facing writedowns of £1.7 billion, plans to cut 1000 jobs

Babcock facing writedowns of £1.7 billion, plans to cut 1000 jobs

Babcock International Group PLC, the UK defense contractor, said that a comet review for the financial year ending March 21 had identified impairments and charges totaling approxim
1 day ago
France’s water management utilities, Veolia and Suez, finally merge after long battle

France’s water management utilities, Veolia and Suez, finally merge after long battle

Veolia and arch-rival Suez, the two French waste management utility companies, have struck a deal worth nearly 13 billion euros ($15.44 billion)to merge after months of wrangling.
2 days ago
Impossible Foods mulling IPO at $10 billion valuation

Impossible Foods mulling IPO at $10 billion valuation

Impossible Foods, the makers of the widely popular plant-based burgers, plans to go public with a likely valuation of $10 billion. The vegan burger company was valued at $4 billion
2 days ago
Aramco sells minority stake to EIG Group-led consortium for $12.4 billion

Aramco sells minority stake to EIG Group-led consortium for $12.4 billion

Energy giant Saudi Aramco is selling a minority stake for 12.4-billion-dollar in a newly formed oil pipeline business to a consortium led by US-based EIG Global Energy Partners. Th
2 days ago