Aviation industry’s scars run deep, but have started to heal after pandemic

DUBAI: Few industries, if any, could escape scars of the last two years that saw the global economy collapse under the drastic impact of Covid-19. For the aviation industry, scars were even deeper amidst lockdowns and severe travel restrictions that translated into massive downsizing and airlines coming to a complete or partial halt in many parts of the world.

Fortunately, the world is now seeing the global aviation sector cautiously finding its wings and gradually trying to cover lost ground during the pandemic.

The mood is quite different, though. There is optimism, of course, but it is masked with a guarded approach: strategies designed to be bold yet based on caution given the foggy future of industry and the uncertainties that cloud it.

On a brighter note, the industry is seeing a huge influx of people desperate to travel, and with the ease on travel restrictions, a massive number has made its way back to the airports. In fact, according to the Air Transport Association, the traveller number is expected to reach 4 billion in 2024, signifying a pent-up demand for travel and a somewhat positive outlook for the industry.

So how are the airlines evolving post-pandemic to meet the unprecedented challenges they faced in the wake of it? More importantly, how are they padding themselves against unforeseen disaster, the likes of Covid-19?

There’s no single answer with each airline going for the best fit given its circumstances, resources, government policies and travel restrictions, among other factors. How the aviation industry will sustain itself is a challenge that may take years to figure out as airlines tinker with innovative concepts and experiment with new ideas in search of feasibility.

The question came under discussion at the recently held Arabian Travel Market in Dubai, UAE, which saw stakeholders across the global travel sector converge under one roof.

Speaking at the event, Adel Abdullah Al Ali, Group Chief Executive Officer of Air Arabia, said, “It has been a difficult two years, but I believe as an industry, we have adapted to meet those challenges. The period also forced the airline industry to reflect on what was working and what wasn’t.”

One of the lessons learnt from Covid was the need for sufficient liquidity which plays a decisive role in staying afloat or being pulled down.

Resultantly, strongest players in the aviation market are now understanding the importance and are focusing on cost-cutting and strengthening their reserves to counter unforeseen financial crisis. The rise in fuel prices due to Russia-Ukraine war, for instance, is taking its toll on the vulnerable recovery process with many airlines already burdened with debt accumulated over the past two years.

Another key word has been efficiency. One thing Covid taught the aviation industry was the ability to react quickly to changing situations, such as abrupt airport closures and fluctuating travel regulations that differ from country to country. With such a fluid market, airlines now need to come up with quick solutions that are a departure from the traditional route and grab opportunities. For instance, in a scenario where one country shuts down travel due to pandemic, airlines need to look for another country that is opening its airports and re-route flights accordingly.

Perhaps, the biggest success story that has emerged from the last two years is the way low-budget carriers have dominated the skies. Riding on low fare, these have proved to be resilient and efficient, and above all, demonstrated their survival skills.

One such example is that of flydubai, which reported a profit of US$229 million in 2021 and the total revenue increasing by 86 percent. With traffic returning to the airports, low-cost airlines are likely to gain more popularity since travellers are still cautious about loosening their purse strings and now, more than ever, are in search of good deals.

Abu Dhabi’s Etihad too, jumped on to the bandwagon, partnering with Air Arabia, the low-budget airline operating from Sharjah. The joint-venture, Air Arabia Abu Dhabi, has opened several new routes, allowing travellers more choice and flexibility in terms of both costs and destinations.

“It makes sense when you think about it. Traditionally, a low-cost carrier can operate those routes at a cost that a full-service carrier can’t. So, it actually blends itself well together, and you can now book yourself from an Air Arabia flight directly on to Etihad flight and it gives customers a greater choice,” said Terry Daly, Executive Director Guest Experience, Brand and Marketing at Etihad Airways.

The low-budget carriers have also brought clarity to what really works with the customer and one can see a conscious effort to simplify the fleet. For example, while there’s a growing demand for business class travel – more for leisure than business – airlines are still reluctant to go all out and bring back fleets that cater to luxury unless the financial equation balances.

The environmental impact too has taken a front-seat with airlines finding different ways to reduce carbon emission, such as giving up single-use plastic and going back to stainless steel knives and forks.

Progress is underway towards creating a ‘greener’ air transport and the rise in carbon and fuel cost have simply acted as a catalyst to find more eco-friendly modes of air travel, such as electric and hybrid aviation. The concept is still new but promising. Boeing, for example, is working on a multi-faceted strategy to decarbonise aerospace that includes sustainable aviation fuels (SAF) which are the key to reducing C02 in long-term and at a large scale.

“To really make an impact, airlines, governments, manufacturers, regulators and policy makers – as well as consumers – need to work together to make a significant environmental impact,” said Tony Douglas, Group Chief Executive Officer, Etihad Aviation Group.

From the consumer’s perspective, travel needs to be less intimidating to create a more seamless experience. To achieve that, airlines are now keeping travel information updated in terms of required documents, including quarantines rules and PCR tests as well as trying to automate the process. Collaborations between hospitality and aviation sector has also returned.

Held in Dubai, UAE, the 29th Arabian Travel Market (ATM) brought together travel industry experts from more than 158 countries. The trade fair was hybrid with the in-person event taking place from 9th to 12th of May at the Dubai World Trade Centre and a virtual event scheduled for 17th and 18th May. The live event featured hosted 1,500 exhibitors and a footfall of more than 23,000 visitors. This year’s ATM is more than 85% larger than the one hosted in 2021 in terms of floorspace.

The event, which featured industry leaders, live sessions and a competition, aimed to strengthen the travel industry and facilitate important business connections. The huge success of in-person ATM proved that the world is ready to travel again.

Copyright Business Recorder, 2022