Fear of Flying Could Slowdown Aviation RecoveryBy Alicia Arizpe | Tue, 04/21/2020 - 11:00
The aviation industry’s recovery from the knockout punch that is the COVID-19 outbreak might be slower than expected due to a reluctance to fly caused by the widespread economic slowdown, warns the International Air Travel Association (IATA).
The COVID-19 pandemic has been a blight to many economic sectors. Measures to halt the spread of the virus sent individuals home and led to closures of retail stores, malls, restaurants, theaters, cinemas and many other businesses large and small. Containment measures also led to closures of manufacturing plants in areas affected by the outbreak, shaking supply chains across the globe. The outbreak heavily hurt tourism and aviation as governments closed their borders and restricted national and international travel. Together, these circumstances are rising fears of a global recession of an unprecedented scale. Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), warned that the institute is projecting that income per capita will shrink in over 170 countries during 2020, leading to “a global recession we have not seen in our lifetime.”
This spells bad news for the aviation industry, which is already operating at a fraction of its capacity and is expected to lose up to US$314 billion in revenue, putting 25 million jobs in danger. IATA warns that a global recession will endanger the industry’s recovery by lowering interest in travel. “Passenger confidence will suffer a double whammy even after the pandemic is contained—hit by personal economic concerns in the face of a looming recession on top of lingering concerns about the safety of travel,” said Alexander de Juniac, Director General and CEO of IATA. In a survey of recent travelers, the association discovered that 40 percent of them expressed a preference to wait at least six months after COVID-19 containments were lifted before traveling again. A further 69 percent indicated that they would wait until their financial situation stabilized before traveling again. IATA also indicated that it had seen a much smaller travel demand in areas with a low number of new cases, such as China and Australia, than before the outbreak, which could point to a much longer recovery period for airlines after the outbreak is contained.
The association indicated that during this week it would hold summits with governments and industry partners to plan for the re-start of the industry. “The industry re-start, however, must be built with trust and collaboration. And it must be guided by the best science we have available. Time is of the essence,” said de Juniac.