COVID-19 and the aviation industry – the start of the recovery

The aviation sector has been one of the most affected sectors due to the COVID-19 pandemic, suffering the biggest crisis in its history. Nevertheless, with the assistance of government measures and industry guidance, it seems that its slow recovery has started.

Pandemic milestones

Before we consider the recovery, it is necessary to reflect on the most significant milestones for the aviation industry:

• 31 January 2020, the World Health Organization (WHO) declared the International Health Emergency. At that time, many airline companies started to suspend international flights with China.
• At the end of February, the US suspended its flights with Europe and many airlines ceased their activities due to the advance of the virus.
• 11 March 2020, WHO declared the worldwide pandemic and countries suspended almost all flights as a consequence of national lockdowns and border closures. The impact was greater on the international flights than on the domestic flights.
• In April, air traffic was only at 8% of the usual rate, as only cargo operations, repatriations and emergency flights were carried out.
• At the beginning of July, the recovery of domestic flights started to be significant, although the total capacity was still restricted. Currently, the Chinese airlines are the ones leading the recovery of this domestic traffic.
  
  

European response

In order to assist the progressive recovery of the aviation industry, the European Union Aviation Safety Agency (EASA) and the European Centre for Disease Prevention and Control (ECDC) have issued guidelines that ensure the health and safety of the passengers, the crew and the rest of the workers at the airport.

These measures included social distancing, hand hygiene, face masks, health and safety material, cleaning and disinfection, temperature checks, reduced aircrew, special embarking and disembarking procedures.

The guidance also distinguishes the different phases through which passengers pass in order to catch a flight, identifying the measures that have to be taken before reaching the origin airport, within the airport, during boarding and upon arrival at the destination airport.

In Spain, these measures to manage passengers and aviation staff have been reflected in the Royal Decree Act 26/2020 7 July, which regulates the obligations and functions of all the operators (passengers, staff, etc.) related to the sector.

Slow progress

The recovery of sector is going to be slow and, according to the International Air Transport Association (IATA), the situation is not going to return to normal until 2024. Until then, it has been estimated that the number of passengers will increase slowly and gradually.

Among other measures, government aid to the airlines will be the key to the recovery of the sector. This is reflected by the Spanish Government assigning around €750 million to Iberia, €250 million to Vueling and €140 million to Air Europa. However, this is far below the aid that other European Governments have provided, such as the German Government which has assigned €9.000 million to Lufthansa and the French Government providing €7.000 million to Air France. Government aid will be different in each country, as no common European policy dealing with this situation exists.

Other important measures that the Spanish Government has taken to support the sector is through marketing campaigns to boost tourism and increase the demand of aviation services. Governments have also taken measures to prevent airlines having to face unnecessary administrative charges during the crisis.

On the opposite side of this crisis, it is important to highlight that one Spanish airport, Teruel, has become the largest aircraft parking in Europe and one of the largest in the world. It belongs to the Aragon Government (60%) and to the Teruel Town Hall (40%), but it is operated by Plataforma Aeroportuaria de Teruel (PLATA), and it is one of the few airports that has benefited from the COVID crisis as, due to fees paid by the airlines, it has increased its profits by 24%.

Comment

It is still very difficult to predict exactly how the recovery of the sector will evolve as uncertainty around the continuing impact of COVID-19 remains. It is, however, clear that any recovery is going to be slow as, regardless of government measures to avoid the bankruptcy of airlines, everything will depend on the development of the virus, differing country responses to cross border travel, and – mostly - on the passengers, as they are the ones that have to recover their trust and resume their air travels.

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