After the unparalleled impact of Covid, the aviation industry is working to right itself and climb back to pre-2020 levels. But unfortunately, it’s not just a case of flicking a switch because the sector, and the wider world, have changed a lot in just 2 years.
The biggest airports are facing the biggest problems with rising costs and declining workforce both being particular sticking points in aviation. All the airlines want to recover, but how much do current market factors influence that recovery and when will we see it return back to normal?
The Here and Now
Covid has been the most disruptive thing to happen to the aviation industry. Ever. No other event has ever completely grounded fleets across the globe. As with any industry, there are peaks and troughs, particularly one largely supported by tourism, but Covid’s impact has left a mark.
The majority of experts predict a full recovery of the industry by 2024. Currently, around 83% of 2019’s volume of flights are running so while airlines have made ground quickly there is still a chunk of their business missing – and they’re feeling that pinch.
Wider factors such as the war in Ukraine, and closed airspace over Russia, mean that there is simply some business that currently cannot be recovered. This is especially scary when you consider the large loans that most airlines took out to stay afloat now need to be paid back.
What’s fueling the recovery at large though is leisure flights, with the appetite for business flights in steep decline with the world’s pivot to online meetings. That means that the aviation industry as a whole needs to focus on encouraging people to get back to regular holidays.
It’s a tricky spot to be in, never mind the risk that Covid could in some form return. But there are 3 things truly stopping the ship from being righted – staff, fuel, and tech.
In case you hadn’t spotted it in the news recently, many large airports are struggling with a lack of security and baggage personnel on the ground, as well as fewer cabin staff and pilots signing up to join them. Airport staff were run very lean before the pandemic so the drop-off in workers makes day-to-day operations an impossibility for all but a few of the biggest airlines.
So if aviation is in recovery, why aren’t people flocking back to their old jobs? Well, many of the staff who left have since found other roles and possibly in industries that they see as less volatile than aviation. The world of aviation can be disrupted very quickly so it can be seen as safer to be elsewhere. In the aviation industry, there is lots of shift work, but in other sectors, there are greater opportunities to have more comfortable working hours and this has played a big part in the shortage of frontline staff to cope with resurgent flight numbers.
Higher salaries and bonuses are the common ways to attract people but this causes its own problems for the people that aren’t offered that increased earning potential. That has led to industrial action, and those strikes have had a compounding effect. All this together has meant that airlines haven’t been able to cope with the market demand and we all rebound from the pandemic.
There are so many costs involved with running an airline because of the scale that they operate at. Because of that, as passengers, each and every part of our journey is monetized. But there is one cost that has the greatest impact on operations and that is fuel.
Fuel prices are a direct cost that can’t be avoided. More flights, mean more fuel, mean more cost and this increases ticket prices. Because the airlines buy fuel in advance, the effect of the spiking fuel prices is still dampened. For the future it can create a significant problem for the airlines.
Firstly, it puts up ticket prices and makes flights for leisure and pleasure less enticing to potential flyers. But, as fuel and energy prices climb, the amount of disposable income available to households decreases. This doubles the struggle for airlines and when they need people to book flights in pre-Covid numbers they could be seeing a drop in the near future.
Aviation is waiting for the next big innovation – electric aircraft. This will be a big step for them and that innovation may well spark greater interest in travel because of the sustainability benefits that can be marketed to customers.
Meanwhile, tech is being developed to make security quicker and easier. The goal is that people will be able to just walk through security seamlessly. This is an ongoing effort but it will change the speed at which people can move through airports.
What you’ll notice is that neither electric aircraft nor efficient security systems are here yet. On top of that, while other industries had to make big digital transformations to survive the pandemic – airlines remained largely the same. Their model hasn’t changed and it’s unlikely to because everything is built around airports and being on site.
Is It All Doom and Gloom?
In short – no. There is a clear appetite right now for flights across the world. Airline’s concerns around costs haven’t changed, fuel has always been an issue, there’s just more pressure now with looming survival loan repayments. Operating at the scale they do, airlines will find a way to encourage people to come back and work for them, either through better pay packets or more likely, better environments with regards to hours and workload. Technology will improve too and big innovations are likely to give aviation a much-needed boost.
The focus now will be to manage the work they do have, build back up steadily, and survive the wider financial issues the global economy is facing.
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