We have become used to traveling freely in an open world, but with COVID-19, borders add a layer of uncertainty that may hamper aviation for years to come.
Since the beginning of the pandemic, the airline industry has understandably focused on measures that mitigate virus transmission risks in airports and aircraft. However, the role of travel as a facilitator of the spread of a virus may be a larger obstacle and one that the aviation industry can control less.
Europe’s Center for Disease Prevention and Control released a set of travel guidelines in late May to provide a common framework for facilitating travel. They are pragmatic, reasonable guidelines that airlines can live with, such as encouraging hygiene, mask-wearing and keeping middle seats empty “where possible.”
However, the document also provides some sobering reading. It notes that none of the measures that could prevent infected passengers from traveling—such as “immunity passports” or pretravel/arrival testing—are either sufficiently effective or economical.
The document also highlights challenges of managing and coordinating case tracking across borders, considerations each country needs to make:
- What are standards for when to open/close borders?
- What is the level of cases? Are they trending up or down?
- What are the accepted approaches to measuring cases?
- What would be the effects on the local health system if there is a local outbreak?
- How can case- and contact-tracking information be coordinated while maintaining privacy?
While keeping safe control over all this, governments also must try to stay agile to accommodate travelers and the travel industry. The result is borders opening soon, perhaps a bit later or closing on short notice, all in line with fluctuating local case trends. Neither airlines nor passengers are ready to cope with this extra layer of uncertainty.
Quarantine measures are one of the top reasons travelers choose not to fly. Assurances about the accessibility and safety of destinations are also indispensable for travelers.
Airlines as we knew them were incredibly optimized operations based on long-term planning and sophisticated data-driven insight into supply/demand elasticity. They were thus able to constantly fill their highly utilized aircraft, which yielded low unit costs and stimulated further demand. Now airlines are completely lacking data on-demand dynamics and have no way of gauging actual demand, as they are receiving 40% of bookings within three days of departure.
The resulting impact on international traffic—which accounted for 64% of 2019 revenue passenger kilometers—can be huge. In May of this year, international traffic had shrunk to 2% of previous levels.
The concept of building “travel bubbles” among friendly countries with similar case levels and coronavirus mitigation approaches has been widely discussed. In Western Europe, for example, traffic is ramping up, as it is in some areas of the Asia-Pacific region. However, in the U.S., parts of Asia, the Middle East, Africa, Latin America and elsewhere, there are high and rising case counts.
The spread of COVID-19 in the U.S. may not be containable for a long time, which could severely limit travel. The impact on global airline demand could be dire: Traffic to/from North America alone accounts for 29% of typical international revenue passenger kilometers.
Consequently, international hub business models are in grave danger. Most hub airlines’ short- and long-haul routes feed each other, and many times the lucrative long-haul operation helps support short haul. How can network airlines profitably rebuild their networks without internatioinal operations? And given border restrictions, how can airlines aggregate enough demand to sustain their routes?
Moreover, spending on production and maintenance of long-haul aircraft will be low for years to come. Long flights mean longer passenger exposure to virus transmission (although the risk level hasn’t been scientifically proven yet), so passenger confidence will take time to build.
Finally, less hub traffic may also prompt airlines to shift to smaller widebody models. How many point-to-point routes can fill a Boeing 777, especially in a low-demand environment?
The need for global coordination, and ultimately an effective vaccine deployment, is clear to anyone hoping to see aviation return anywhere close to where it was before the pandemic.
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