COVID-19 Could Be Worse Than 9/11 for Aviation Industry
By: Gading Widyantoro
Tags: Travel, Coronavirus, Aviation, Airplanes, Covid 19

The September 11 attacks (also referred to as 9/11) were a series of four coordinated terrorist attacks by the Islamic terrorist group al-Qaeda against the United States on the morning of Tuesday, September 11, 2001. The 9/11 terrorist attacks pushed the industry into a financial crisis after air travel dropped 20% over the September–December 2001 period compared to the same period in 2000. It took almost three years for the airline industry to fully recover from the demand shock created by 9/11.

While COVID pandemic which already happens since February could make airlines lose up to $113 billion in 2020. A study by the Official Aviation Guide (OAG) worldwide, the number of scheduled flights has decreased by 64% compared to the same week last year. Capacity reductions have continued in many of the major country markets. On the economic scale, the Aviation industry represents around 2.7 billion dollars globally. According to the World Tourism Organization (UNWTO), tourism will fall around 3% in the world, which will mean losses between 30 and 50 million dollars globally. In the case of airlines, the impact is not less, IATA estimates a drop in industry revenue of about $ 252 billion (44% compared to 2019). U.K. regional airline Flybe announced it had entered administration, due to the coronavirus outbreak’s impact on demand for travel as one of the reasons for its collapse. Meanwhile, data published Thursday by analytics firm ForwardKeys showed international flight bookings to Europe were down 79% year-on-year in the final week of February.

Given the weight that these industries have in their region, many governments appealing to the responsibility have announced support measures for the industry. Governments such as the North American and the Australian have announced support measures for airlines and tourism companies (hotels, cruises, etc.), in order to rescue these industries that are so relevant to the global economy. The Reuters news agency has confirmed that United States airlines are close to accepting the aid plan to cover the payroll. Some large US passenger airlines are about to accept the terms of a $25 billion offer for government payroll aid. Based on 2019 second and third quarter wages and benefits, American Airlines and United Airlines were eligible to receive approximately $6 billion in grants, Delta Air Lines about $5.6 billion, and Southwest Airlines about $4 billion.

Airbus, the French’s plane company has warned that the aviation industry could take as long as five years to recover to the levels seen before the coronavirus pandemic, as Airline such as British Airways tries to secure their survival by cutting thousands of jobs. However, despite the brutal short-term impact outlook was coupled with longer-term optimism that the aviation industry will rebound and grow. Before the crisis, the airline industry was forecasting steady growth in global air traffic. Some airlines view the crisis as “an opportunity” to accelerate the switch to newer planes with lower carbon emissions, he added, referring to the potentially greater long-term challenge for the industry of achieving carbon neutrality.