This past week I was privileged to be one of the panelists among a list of respected industry professionals in a webinar to talk about what the future of aviation might look like. When I was asked the question, one of the various topics I covered was precisely this, that the vaccine is key to the airline’s recovery.
This week United Airlines executive chairman Oscar Munoz speaking at the virtual World Aviation Festival on 24 September said that a vaccine that will protect travellers against the coronavirus will be key to the airline industry’s recovery.
Munoz says that the industry will experience little business improvement until an immunization is deemed safe and is globally available. Absent that, a testing regime that delivers rapid, reliable results is the next best thing.
“Nobody knows how long this will last,” he says. “Until a vaccine is brought forward and operationalized and distributed widely, we will still see demand suffering.” But until that happens – expected to be in early-to-mid 2021 – coronavirus testing should be ramped up, Munoz says.
I could not agree with Munoz more! This is what I have been thinking and saying for a while, travel demand will soar back once there is a Coronavirus vaccine.
Airports Council International (ACI), a trade group representing almost 2,000 airports worldwide, on 24 September joined IATA and other organisations in calling for coronavirus testing of passengers prior to departure as an alternative to any mandatory quarantine requirements.
Mandatory quarantine, particularly self-funded one in Australia at $3000 per person and unilateral decisions from governments are destroying efforts to restore air connectivity and, without the lifting of travel restrictions and quarantine, the aviation industry cannot rebuild and will not be able to drive the global economic recovery from the effects of the pandemic.
In addition to airlines, airports are also suffering under the drop-off in demand, and ACI (Airport Council International) expects 2020 global passenger numbers to be 5.6 billion lower than last year, with an unprecedented $104.5 billion reduction in revenue.
One of the other subjects I covered at the webinar was the airline dependency on state support which has become a new normal, for many of the world’s largest long-haul airlines suffering the devastating effects of the Covid-19 pandemic.
Small airlines have received less support from governments and they will need to work between very thin lines and manage the survival struggle, whilst bigger intercontinental airlines have received larger funding, but this does not mean that they will have to behave differently.
These large operators will need soon to start generating cash flow to operate the business otherwise if the current scenario persists, we may witness an epic change in the global aviation field.
Some of the large airlines are also in a good position as they employ a mix of measures to reduce its government debt, including fresh capital from financial markets and from asset sales, however, this measure will not be viable for the long term.
Governments, airlines, and airports must work together to ensure that testing are done rapidly at the airports, mandatory quarantine and unilateral decision from governments are reviewed and changed to restore air connectivity, whilst we wait for a vaccine to be released.