OP-ED: A better air transport industry will emerge
There was a successful start to 2020 but suddenly it was interrupted by the exceptional circumstances caused by the global spread of COVID-19.
On March 17, our airline, airBaltic, stopped scheduled passenger flights out of the Baltics. Since then, we have focused on repatriation, charter and cargo flights.
Looking at the situation globally, the impact of the airline industry is highly visible and there is a break in the value chain. Both business travel and the leisure industry are suffering. Restaurants and hotels are empty. Global events and conferences have been postponed or canceled. Millions of passengers’ travel plans are affected. The restrictions have completely changed how we live, build personal relationships and work and could continue to affect us for years. All of this will have a significant economic impact that will come in the next months.
In my opinion, we will see a lot of airlines restarting after lockdowns are lifted, but then realizing that new passenger demand is not sufficient to maintain their old business models. This will lead to mergers and insolvencies that will continue after the virus-related restrictions are gone.
A full return to the passenger demand growth forecast in 2019 will take years to happen because the economic impact will limit the ability for companies and individuals to afford travel. But airline networks and connections are also vital for economic development. This crisis demonstrates that without a functioning aviation infrastructure and connectivity, the impact on the global economy will be even more severe.
Naturally, there will be some people who will hesitate to fly because of safety concerns, and it will take them longer time to embrace flying. But there are those who want to fly. Already, we are seeing new bookings coming in for flights in October, November to places where people expect the situation to be over by then. Tourist travel will shift to destinations where people feel comfortable about taking a vacation and about being able to safely return regardless of quarantine rules. The return to normal flying might be made easier if certain health checks are conducted before the flight.
This crisis also gives us a chance to make our industry even better. Sustainability will become an important factor because the pause of flying and industrial production has made clear their environmental impact. New and even stricter health and safety travel procedures will improve things for passengers and those who work in this industry. Airlines are reviewing their business models, adjusting their networks and fleets. We all have to become more efficient and creative to recover from the toughest crisis for our industry.
Martin Gauss is CEO at Latvia-based airBaltic.