Article: Post-Pandemic Aviation Industry

Airlines in 2021

Credit: <a href="https://www.shutterstock.com/g/artdes">Shutterstock / YAKOBCHUK VIACHESLAV</a>

Mar. 26, 2021

by Babak Babali

From downsizing to novelty flights, airlines are looking for strategies to remain operational during these challenging times.

2020 was not a good year for the aviation industry, but before the pandemic the sector had high hopes for this decade.

The ever-growing interconnectivity of the world and the growth of the middle class in many developing countries was expected to translate into more customers for the industry.

However, with the beginning of the COVID-19 pandemic, the very factor which was supposed to drive the growth of the aviation industry—that is the interconnectivity of the world—became a curse, taking the novel coronavirus to all corners of the globe.

This led to the cancellation of many unnecessary flights, especially to the epicenters of the diseases. Later on, many airliners were grounded as a precautionary step to restrict the movement of the pathogen.

What is more, the emerging middle class of many developing countries, which formed the new customer base of airlines, lost a lot of its spending power in the wake of the pandemic and lockdowns, with many people losing their jobs.

In addition to the devastating pandemic grounding many airliners across the world—or at best forcing them to operate at half capacity—2020 also saw a higher-than-usual number of aviation accidents, which did not do the industry's public relations any favors.

In addition to several military and private air accidents, there was Pegasus Airlines Flight 2193 crash landing in Istanbul, the tragic crash of Sriwijaya Air Flight 182 in Indonesia, Pakistan International Airlines Flight 8303 in Karachi, and the case of Ukraine International Airlines Flight 752, which was mistakenly shot down by the Iranian air defense at the height of military tension between Iran and the US in January, 2020.

There is, therefore, no denying that the civil aviation industry as had a bad year replete with accidents, dropping demand, and increasing maintenance costs—airplanes not routinely flying still need a great deal of maintenance to stay flightworthy.

Airlines have responded to these difficult times in different ways. Thai Airways of Thailand, for instance, decided to lay off up to 50% of its personnel in the early 2021 and after a very challenging 2020, which pushed the once-prosperous airline to the verge of bankruptcy. “After months of tackling bankruptcy amid the COVID-19 pandemic, Thai Airways decided to lay off 395 pilots," according to The Thaiger.

Downsizing is a predictable response by companies during challenging times, but some airlines are resorting to more creative solutions to make ends meet while not losing their human resources. In order to promote internal tourism, the Australian flag carrier, Qantas, has come up with the idea of “mystery flights," or “flights to nowhere."

Simply put, Qantas will take a plane full of thrill-seeking Australians from Sydney, Melbourne, or Brisbane to unspecified domestic locations and back. While en route, the flights will travel at a low altitude so that the passengers will be able to enjoy the scenery—as long as they are not distracted by the free drinks served on the flight.

“Qantas's flights are a throwback to an earlier era: The airline last offered mystery flights in the 1990s, and other airlines in Australia and Germany have run similar excursions in years past," according to The Washington Post.

Yet other airlines have decided to quietly sidestep the long-established hub-and-spoke paradigm, which has served as the de facto model of running the global aviation industry for many years. In this model, certain strategically located airports including DXB in Dubai, IST in Istanbul, LHR in London, and ATL in Atlanta, among a few others, serve as international hubs. Flights from all over the world first head for the closest international hub, where there are plenty of scheduled transit flights to other corners of the globe.

However, with the decline in the number of passengers, many local airlines have decided to hold point-to-point (P2P) flights to as many destinations as it is possible. Although the P2P model makes little economic sense, especially in the long run, it may save some airlines from bankruptcy for the time being.

Among other strategies, employing the P2P model, launching novelty flights, and layoffs have been the main tactics airlines have used to remain operational, though some of these strategies such as novelty flights may even continue in the post-coronavirus world.

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