The least we can say is that the airline industry was hit hard by the ongoing pandemic.
The numerous travel restrictions have impacted many people’s lives and have even destroyed
them.
In this video, you will discover the top 10 biggest changes in the airline industry due
to the pandemic!
At the end of the video, I would like you guys to react to this situation by leaving
a comment so that we can discuss the current issues of our industry, so please make sure
you watch the video until the end.
Hit that like and subscribe button, and let’s get started!
Number 10!
100 million jobs at risk.
Michael Gill, the executive director of the Air Transport Action Group voiced his concerns
about the widespread job crisis in the aviation sector due to the pandemic.
Mr. Gill stated 2020 saw less than half the number of passengers taking flights compared
to 2019.
He estimates that 4.8 million jobs will be directly affected by the pandemic, this is
a 43% reduction from pre-COVID levels.
More shockingly, this number grows to 46 million, when including jobs that aviation supports
like hotel staff and tourism-based businesses.
Unfortunately, the damage doesn’t stop there as these hotels and businesses support other
sectors such as catering and hospitality.
The United Nations World Tourism Organisation claims that the knock-on effect the pandemic
has had could leave over 100 million jobs at risk!
This number is absolutely depressing, isn’t it?
Number 9!
One Third of the global fleet is grounded.
When the pandemic first started in March 2020 there were an estimated 20,000 planes mid-flight.
This number has drastically decreased, as flight radar is now only reporting 5,000 planes
mid-flight.
The lack of available routes has meant that nearly all carriers have had to ground some
of their fleet for the foreseeable future.
British Airways and Qantas have begun to accelerate the retirement of some of their fleet including
all 31 of BA’s infamous 747’s.
The day after the pandemic hit, 28% of planes were grounded globally, BBC says this number
had risen to nearly 70% in the height of the pandemic.
Travel has improved from then and now only a third of the world fleet is grounded, still
a huge number.
Number 8!
$100 Billion in Government funding.
It is no secret that airlines have been struggling massively during the pandemic, to prevent
them from collapsing most of the world’s governments have provided extra funding.
It is a bad look for flag-carrying airlines to go bust and governments will do what is
necessary to keep them afloat.
Before the virus hit, 2020 was off to a better start, at least for the aviation industry,
but obviously this did not last, and an extra money injection was needed.
The biggest contributor is the U.S who have injected $80 billion into their airlines,
the same as all other countries combined times 4.
This is a staggering amount of money; it shows the confidence that America has in the Aviation
world to recover back to the highs of 2019.
Number 7!
Pilot Job Loses.
The European Cockpit Association estimates that over 18,000 pilots have lost their jobs
over the course of the pandemic.
Nearly all major airlines have announced further redundancies suspected to be in the tens of
thousands.
Many more have been placed on furlough or taken pay cuts of up to 50% of their pre-pandemic
salary, and this is significant, especially for low-experience pilots.
Bear in mind that a freshly graduated first officer that has just started flying for an
airline, has also his CPL training loan to pay back, which can go up to €800 per month.
Therefore, such a drastic pay-cut simply leaves many pilots with this profile at a huge precarity.
Some airlines were already struggling, Thomas Cook and Flybe both declared bankruptcy prior
to the pandemic.
As a result, most pilots flying for the airlines lost their job without any warning.
Pilots who were involved in self-employment schemes were the first to lose their jobs,
and in Europe this is around 1 in 5.
Axing atypical jobs requires no consultancy with unions, no warning period, or unemployed
benefits.
As a result, around 6,500 atypically employed pilots lost their jobs immediately without
any warning.
Number 6!
-60% in global traffic.
The ban on flying has had an impact so large that it has caused financial hardship to nearly
every industry on the planet.
The tourism industry was hit the hardest of all as international travel was down 64%!
This equates to 1.3 billion passengers, $252 Billion in lost revenue by the airlines and
111 Billion in lost airport revenue.
ICAO states International travel makes up for around 8% of global GDP and thus $2.7
Trillion has been lost because of airlines not being able to fly.
Tourism is essential to the economic growth of some counties and can make up 20% of their
revenue.
This helps to alleviate poverty and provide jobs.
Not allowing Airlines to fly has crippled and ruined many people’s businesses and
livelihoods.
Number 5!
More expensive tickets.
With airlines amassing huge debts and being left economically destroyed from the pandemic
they will be forced to charge higher rates to customers.
British Airways alone has £2 Billion in debt.
Unfortunately, this will likely be reflected in their ticket prices once demand returns
to normal.
This is not certain; however, the world’s airlines are burning through $7 Billion every
day.
This cash-burning is not sustainable and eventually, airlines will have to recoup their losses
by making more cash.
Now that airlines have seen the devasting effect of a pandemic they are more likely
to prioritise stock-piling cash and they will make safer investments.
This combined with the massive couped up demand that many are predicting could lead to some
hefty price tags on popular routes.
Let’s wait and see!
Number 4!
More cargo flights.
The tourism industry in ruins has caused a spike in cargo aircraft flights.
Before COVID only 13% of annual revenue came from cargo flights.
This is because passenger flights were responsible for delivering around half of the world’s
cargo.
As some of these flights are no longer running, cargo demand has increased to around 30% of
total revenue.
Additionally, e-commerce sales have skyrocketed due to COVID restrictions and Amazon’s increased
popularity.
Over the previous 10 years, cargo has been mostly unprofitable for many airlines and
they have scaled back their fleets.
It appears that now cargo flights have been the lifeline for many airlines during the
pandemic.
Some may consider increasing their cargo fleets for additional security.
Number 3!
Aircraft markets will be over-supplied.
Before the pandemic, the aviation world was predicting massive growth.
As a result, more planes were produced by both Boeing and Airbus.
Both produced the most planes in their history in 2019, showing the huge number of orders
they received.
As we know, this growth did not come in 2020 leaving many aircraft redundant and useless.
Prices for aircraft leases have plummeted due to the unprofitability in the sector.
The monthly lease rate for a 2016 777-300 was $1.2 million but because of the saturation
in the market, this number has fallen to around $800,000.
Incredibly, newer aircraft are rumoured to be available at even bigger discounts.
Number 2!
Less demand for business flights?
The recent online revolution has left business flights in a sticky situation.
Services like zoom and skype have drastically reduced the need for business flights.
Previous business travellers have been left no choice but to have online meetings.
Many have come to the realisation that the cost of flying on business flights is simply
not worth it.
Online meetings using the services mentioned have little cost and are extremely well built
for their needs.
On the contrary, there is no way to learn the inner workings of a business and discuss
fine details over dinner.
So, there is still hope for business travel as many prefer to meet face to face, especially
when discussing sensitive information.
And here’s our number 1 of this top 10, that we’re probably all eagerly waiting
for.
If you have enjoyed the video so far, make sure to hit the like button and subscribe
to my channel if you haven’t it so far.
Number 1!
The Recovery.
The largest change we will see to the current situation is the recovery of the airline industry.
Nearly everyone accepts the fact that airlines will recover back to all-time highs within
the next 5 years.
During this time, airlines will gradually grow and recover from the economic difficulties
suffered throughout the pandemic.
IATA suggests that carriers in the Asia-Pacific region will recover first followed by the
US and Europe, and that’s exactly the trend we are seeing right now.
They will gradually expand their fleets, hire new employees (like they’re doing right
now in the United States in airlines such as United or Spirit Airlines), and open new
routes until being financially stable.
As more people are vaccinated, more countries will open their borders to international travel.
The current vaccination rates are good enough that the EU predicts recovery volume to be
at least 70% by 2022 in most major countries.
Do you think the airline industry will recover within the next 2 years?
Let me know by leaving a comment down below!
If you wanna watch more aviation top 10’s, click on any of the videos you see on your
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Thank you all for watching, and I’ll see you in the next one!