The Aviation Industry is Still Suffering from Covid 19

Borderless Counsel Update by Faisal Khan

The COVID-19 pandemic has disrupted business operations in all industries globally. The first of all industries affected was the airline industry resulting in a full-scale global transportation crisis. Despite positive signs and prospects for recovery, COVID-19 remains an existential crisis for airports, airlines and their commercial partners. Airports and airlines are calling governments to partner with the industry to prepare to restart global connectivity. The pandemic brought airports around the world to a virtual halt in the second quarter of 2020, resulting in airport traffic and revenue losses across the globe.

In September 2020, the Air Transport Action Group (ATAG), estimated that the COVID-19 crisis will result in the loss of 46 million aviation-supported jobs (-52.5%) as well as a reduction of $1.8 trillion USD in economic activity supported by aviation (-51.5%). Many countries had to increase or re-instate partial lockdowns in an effort to control the spread of the infection and travelling from and to the red zone countries are still restricted. Travelers and industry stakeholders are eager to resume traveling.

Airports generate more than 95% of all revenue from two operating sources: aeronautical and non-aeronautical services, and air traffic is the lifeline of the airport business. More air traffic also means more contribution to ending poverty and boosting trade opportunities in poorer countries. After experiencing such huge losses, it’ll take time for the industry to make a full recovery. However, the covid-19 vaccinations are a ray of hope and a path to recovery. Experts have estimated that from the second half of 2021 things will be under control and the airline industry will start gaining some traffic. According to the International Air Transport Association's (IATA) forecast both revenue and passenger numbers will return to pre-covid levels by 2023.

However, there are still hurdles to be overcome, with many countries anticipating 4th and 5th variant driven waves of Covid 19. That being said, vaccination passports may be a solution for air travel. Canada has already reduced testing requirements for vaccinated travelers, who will begin being allowed into the country for tourism from September 7th as of now. In addition, the UK, US and a number of other countries are allowing vaccinated travelers to enter their borders. Vaccines are not a full cure for the pandemic however, and regulations concerning social distancing, safety during air travel, testing and airport/airline environmental safety (i.e. air purification) may need to be implemented for some time to come.