Sunday, June 20, 2021

Aviation Industry: Searching For The Silver Lining

by Jitender Bhargava

The airline industry is currently in an extremely mauled state due to Coronavirus with airlines worldwide losing an unprecedented $126.4bn in 2020.

The gradual resumption of flights on a limited scale, in and around May 2020, after an almost complete cessation of operations in March 2020, as governments banned flights in a desperate bid to contain the spread of the virus in their respective countries, had given hope of revival but the situation, unfortunately, continues to remain grim even a year later.

Net post-tax losses forecast for 2021: $47.7bn.

Even as domestic operations in various countries had shown a steady growth (till the virus re-erupted with greater ferocity like in India in April 2020), international operations have continued to be at an abysmal level when compared to 2019.

This is even though IATA and ICAO have been working with governments to facilitate smooth resumption and scaling up of operations – keeping the interests of the airlines in particular and revival of the global economy in general.

If 7-14 days quarantine stipulation at arrival airports was a huge hindrance to growth in air travel, the requirement of a negative test report to bypass quarantine requirements did encourage more people to fly but it was simply not enough to spur any significant growth in air travel.

This was essential because the cost of PCR testing at US$100 in many countries and the requirement for multiple tests for a single journey made flying unaffordable for individuals and families.

One, however, cannot fault the countries imposing rigid conditions of quarantine or PCR tests because the arrival of even one infected passenger on a flight had the potential to infect several others. Countries in South East Asia like Hong Kong, Singapore, and countries down under – Australia and New Zealand, have indeed been particularly strict; and rightly so, because these countries have thus far seen relatively fewer infection cases and consequent fatalities.

Learning to live with it

The growing acknowledgment of the fact that COVID-19 will become pandemic, and unlikely to disappear soon, has made the industry realise the need to learn to live with it. IATA- the representative body of airlines, which strongly supports risk-based measures to safely manage international travel, has been proactively engaging with governments to find a solution.

Compounding the governmental restrictions leading to fewer air passengers have been the inherent fear in prospective air travellers of getting infected during travel and the absence of a trigger that makes a person travel.

Lockdowns, still in place in several countries have barred numerous normal activities that used to act as a trigger for travel. Business meetings, conferences, leisure travel, and social visits are just not on anyone’s agenda as many are busy battling the Covid-vitiated environment and economy-inflicted challenges.

Ray of hope

The end of misery is now beginning to appear in sight. With the biggest vaccination campaign in history now underway and more than 1 billion doses having been administered across 172 countries, normalcy should return soon as 6.7% of the global population has already been vaccinated and 19.2 million doses are being administered every day.

Pessimists can aver that at the current pace of 19.2 million a day, it would take years to achieve a significant level of global immunity. The good part, however, is that the rate is steadily increasing, and new vaccines are being produced to enhance the availability.

As Europe and North America would have vaccinated the high-risk and healthcare population by July and 75% of the population by October 2021, one can expect international flights to start between these countries to be the harbinger of good times for the airlines.

IATA Travel Pass

While vaccination will provide the requisite impetus, IATA in its bid to ensure seamless travel without the need to undergo PCR tests every time one undertakes travel has developed the IATA Travel Pass, a mobile app. This app will be a personal secure digital wallet solution that can be used by passengers to obtain and store their COVID-19 test results from accredited laboratories.

The industry will thus be ready with the IATA Travel Pass to manage testing and vaccination documentation for travel. Twenty airlines have accepted the concept and trials are currently underway. Singapore Airlines, the first to complete the trials successfully, has ensured that Singapore health and border control authorities accept the IATA Travel Pass as a valid form of presentation of COVID-19 pre-departure test results for entry into Singapore.

World Health Organisation (WHO) has been requested to produce interim guidance and tools related to standardisation of paper and digital documentation of COVID-19 travel-related risk reduction measures (vaccination status, SARS-COV-2 testing, and COVID-19 recovery status) in the context of international travel, and acceptable to all governments.

The coordinated approach of various global agencies to find an early solution is indeed commendable.

With a significant number of the fully vaccinated population likely to relinquish their fear of getting infected during travel, IATA Travel Pass obviating the need for multiple PCR tests during travel, airlines can hope to see an impressive growth soon.

The airlines can also expect full normalcy in the air only when activities on the ground viz business, leisure, social functions that trigger air travel also get normalised.

One hopes it will be sooner than later!

About the author: Jitender Bhargava is a former executive director, Air India & author of The Descent of Air India.


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