Logistics & Transport Trends

#BizTrends2021: How the aviation industry is taking off during the pandemic

From closed borders to changing travel behaviour, decreased passenger numbers and even heightened safety concerns - the aviation industry has, and continues to face challenges that threaten its survival.
Anand Yedery
Anand Yedery

The aviation industry was hard-hit by the pandemic and subsequent lockdowns, almost crippling global economies. The effects of this have impacted a range of sectors, including tourism, which makes up a significant percentage of any country's annual gross domestic product (GDP).

According to the 2019 South African Tourism Annual Report, the economic impact of tourism (measured through tourism's total contribution to GDP) was R425 billion in 2018, accounting for 8.6% of the economy. Furthermore, tourism contributed about 1.5 million jobs to the economy (about 9.2% of South Africa's total employment at the time).

Stricken by the pandemic, we can definitely see how this still holds true for the country. President Cyril Ramaphosa's announcement on 11 November 2020 to reopen South Africa's borders to all countries, therefore, offered a glimmer of hope and signs of recovery for the country's tourism sector as well as the aviation industry.

Domestic travel and inter-African travel, saw an earlier and a more positive resumption, coupled with demand to travel. The South African Tourism industry also witnessed an increase in volume of passengers travelling especially during the festive and holiday months. The gradual progress of domestic travel in the country, and the launch of a new domestic airline indicates the confidence the industry has in the market and the consumer’s willingness to travel.

Challenges that have kept the aviation industry grounded

According to the International Air Transport Association (IATA), passenger air transport measured as revenue passenger kilometres (RPK) was down 90% year-on-year in April 2020.

Airlines still have numerous hurdles to overcome before they can begin making a stable recovery. Most industry analysts are forecasting very gradual recoveries over a protracted period, and IATA is forecasting that it will be 2024 at the earliest before international passenger demand returns to pre-crisis levels. Airlines are still incurring significant operational and assets management costs.

These costs are likely to continue increasing for both airlines and airports as a result of health and safety measures, like investing in disinfectants, safety gear, conducting temperature checks that are all aimed at keeping passengers, crew and staff safe. Adding to this are changes in air travel behaviour for both leisure, and business passengers especially with travellers preferring to take short-medium haul flights instead of long-haul flights as well and business passengers using video conferencing tools to conduct business instead of travelling.

There's also the possibility of a resurgence of the pandemic, which might force governments to contract economic activities and impose new air travel restrictions to tackle a potential second wave of infections. These are all factors that are prolonging the industry's return to pre-crisis demand levels.
How airlines are helping the tourism sector takeoff

To speed up the industry's recovery and promote air travel again, airlines are now introducing strict measures to ensure passenger, employee and service personnel safety. Safety protocol, like Cathay Pacific's Cathay Care, for example, which comprises contactless check-in and boarding, mandatory face masks, blocking off of seats and ramping up sanitisation and across touchpoints, as well as the HEPA filtration system on-board reduces the risk of infection risks between origin and destination countries.

Airlines have also had to reimagine travel policies. For instance, Cathay Pacific has introduced Covid-19 insurance for passengers that is automatically applied to a customer’s ticket. The insurance offers to cover medical expenses related to a Covid-19 diagnosis incurred while overseas and specific polymerase chain reaction (PCR) tests, quarantine costs as well as evacuation and repatriation.

While implementing these safety measures are key, it is also equally important for the industry to implement a comprehensive communication plan that addresses the initiatives taken to protect travellers and employees. Airlines are proactively communicating with customers and trade partners regarding the safety measures and policy changes taken by the airline.

Here too, Cathay Pacific has been using mediums such as their social media pages, websites, mobile apps, newsletters to communicate with passengers, whereas the trade partners are informed using multiple workshops, newsletters as well as briefing books.

Restarting the sector through travel bubbles

Countries have been searching for ways to restore the diminishing inbound cash flow stream that would have resulted from international tourism and travel.

One of the solutions has been the travel bubble concept, which establishes exclusive partnerships between neighbouring countries that have demonstrated considerable success in combating the Covid-19 pandemic within their borders.

The agreement eliminates the need for travellers to undergo on-arrival quarantine. Travel bubbles prioritise safety through extensive requirements that passengers must adhere to.

As more countries continue to flatten the curve, governments have identified travel bubbles as the next feasible step to help boost economies, enable the airline industry's recovery and recreate the seamless travel experience passengers had before the pandemic.

What flying looks like during the pandemic

Flying during the pandemic is already taking shape. The travel bubble, borders reopening and the swift development of a Covid-19 vaccine are paving the way for even more travellers to take to the skies.

Of course, safety will remain a concern for some time. Airports will need to maintain safety measures to mitigate infections, such as e-boarding passes, self-check-in kiosks, bio-metric gates, contactless payments as well as placements of hand sanitisers and foot markings across the airports.

Airports around the world have also stepped up measures to protect the health of everyone who works at and uses their facilities. Hong Kong International Airport, for instance, is one of the few airlines in Asia Pacific that to be accredited by the Airport Health Accreditation programme of the Airports Council International, recognising the high standard in upholding health and safety of HKIA’s operations.

Apart from introducing dedicated Covid-19 testing centres at the airport, HKIA has also invested in a full-body disinfection channel as well as the innovative Intelligent Sterilisation Robots (ISR) that sanitise passenger terminals.

Similarly, airports in South Africa, have also implemented in numerous safety measures including mandatory temperature screening and sanitisation at all terminals, as well as installing vending machines that are used exclusively for the sale of masks. Both inbound and outbound passengers can also take advantage of the mobile-van testing services set up by the National Health Laboratory services outside major airports like O.R. Tambo, King Shaka International Airport in Durban and Cape Town International Airport.

While there is a change in the buying patterns and consumer’s preferences, the tourism industry across the world including South Africa is slowly beginning to take off. And going forward the airlines, airports, tourism boards and governments will need to continue working together to not only reassure the consumers at every step through communication but also for a healthy recovery.

About Anand Yedery

Anand Yedery is Regional Head of Marketing and Sales, South Asia, Middle East and Africa (SAMEA) for Cathay Pacific.

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