“We are not expecting passenger demand to return to 2019 levels until 2024”

Rebuilding an industry

Challenges, changes, and hopes for aviation in the wake of the pandemic

 


MARCH 2021 Feature / Text by Justin McCurry


The aviation industry has been one of the most visible commercial victims of Covid-19, as countries around the world have attempted to keep the spread of the virus in check with a raft of restrictions on international travel.

Now, just over a year since the start of the pandemic, airlines have a reason for cautious optimism. With safe and effective vaccines starting to be administered around the world, there is potential for a rise in international travel as countries end lockdowns and loosen restrictions.

But with experts warning that the virus will be with us for some time — particularly in countries still struggling with high caseloads and poor access to vaccines — the industry is under no illusions about the turbulent times ahead as it attempts to ensure passenger safety while turning around its finances.

The pandemic has also raised questions about the future of aviation. Will it accelerate efforts to cut carbon emissions? And will people who won’t — or can’t — be inoculated be banned from aircraft in favour of those with “vaccine passports”?

According to the International Air Transport Association (IATA), 2020 was the worst year in the industry’s history. Measured by the number of kilometres travelled by paying passengers, global air travel demand fell 66% compared with 2019, while international passenger demand was 76% below 2019 levels.

The figures for Japan are equally grim. Passenger numbers on international routes plummeted 81% to 4.3 million in 2020 compared with 2019, according to the Ministry of Land, Infrastructure, Transport and Tourism.

Albert Tjoeng, IATA’s head of corporate communications for the Asia–Pacific region, notes that 2021 started worse than 2020 ended due to increased travel restrictions imposed by governments in response to the emergence of new, more transmissible variants of the virus.

“We are not expecting passenger demand to return to 2019 levels until 2024,” he says.

Under IATA’s most optimistic scenario, some travel restrictions will be lifted once vulnerable populations in developed countries have been vaccinated, “but only in time to facilitate tepid demand over the peak summer travel season in the northern hemisphere”, he adds.

According to a more pessimistic scenario, airlines will lose $95 billion over the course of this year if significant travel restrictions remain in place throughout the summer, keeping demand at just 33% of 2019 levels.

Airlines are pinning their hopes on digital vaccination and test certificates that can confirm passengers’ negative Covid-19 status.

“The key to unlocking international air travel is not only to accelerate vaccination efforts around the globe, but for authorities to allow more comprehensive testing — and to push for internationally recognised digital vaccination and test certificates — instead of ordering mandatory quarantine for inbound passengers or restricting entry into their country altogether,” says Donald Bunkenburg, senior director for Japan and Korea at the Lufthansa Group, noting that 2020 had been “tough and painful” for airlines and their employees.

“Now we must do everything we can, together with governments worldwide, to unlock international air travel while ensuring the safety and wellbeing of passengers along the entire travel chain,” he adds.

Among these efforts are well-established hygiene measures, such as onboard filters that continuously clean cabin air.

“Finnair has focused on ensuring we have a path out of the crisis,” says Hiroaki Nagahara, general manager of Finnair Japan. “We have comprehensive health and safety measures in place to ensure safe travel can continue during the pandemic. These include obligatory mask usage on board and at the airport, intensified cleaning of aircraft, and adjustments in our processes and service procedures to limit contact between people during their travels.”

Although the pandemic is forcing airlines to cut costs in several areas, it is also encouraging them to make more sustainable choices.

“The pandemic has impacted our investment capability, but as we ramp up our operations, we will build back better — emissions will not increase at pace with increasing flights,” says Nagahara. “Fuel efficiency has been a factor when choosing which aircraft to operate and which to park during the pandemic, and we have carefully matched aircraft size to demand.”

Bunkenburg says sustainability remains a “top priority” for Lufthansa, despite the additional challenges posed by the pandemic.

“The crisis offers an opportunity to become more sustainable by, for example, accelerating the modernisation of our fleet and pushing for an increased use of sustainable aviation fuels,” he says. “Our responsibility is to capitalise on this opportunity. We can now reduce emissions faster than we thought possible before the pandemic. By 2030, the Lufthansa Group aims to halve CO2 emissions compared with 2019, and to become carbon neutral by 2050.”

In terms of traveller numbers and revenues, airlines are expecting a slow recovery and a shift in the passenger makeup.

“The recovery will be slow and gradual,” says Massimo Allegri, country manager for Japan and Asia–Pacific at Alitalia. “The traffic mix is also likely to see a less intense recovery in business travel than in leisure. European airlines have suffered significant damage, comparable to that of the rest of the world, especially for carriers most exposed to long hauls.”

Through a combination of health and safety measures, open borders, and more uniform regulations, Allegri is certain that the travelling public will again demonstrate its confidence in aviation, which, “even in this health crisis, has proved able to guarantee — at the highest level — the safety and health of travellers,” he says.

For European and other airlines, recovery — expected to begin this summer — will look less like a rebound than a gradual ascent. Its progress will be dependent on how quickly travel restrictions and quarantine requirements are replaced by proof of vaccination or of a negative Covid-19 test.

“We know that our customers’ desire and need to travel has not disappeared,” Nagahara said, noting the benefits air travel brings to economies, particularly those that depend on tourism. “This is why we believe travel will bounce back. We intend to come out of the crisis stronger.” 

“our customers’ desire and need to travel has not disappeared”