Airline industry heading to uncertainty

The prediction by IATA that COVID pandemic is going to put 25 million jobs at risk worldwide which includes direct and indirect jobs like travel agencies; if correct, would be disastrous.

There are already lawsuits being filed across the globe on the refunds being denied by airlines and instead giving out vouchers.

The questions that arises now are :

  1. Will the airlines be able to survive after the pandemic? If not, then these vouchers are useless.
  2. Many of the migrant workers are facing the heat during this lockdown and they have bought one-way ticket to home. They may never use the same airline again or just may not be able to fly again. In this scenario, these vouchers are useless.
  3. The validity of most of these vouchers are till the year-end. Due to this pandemic and the recession thereafter, the validity of the vouchers would have to be extended, if at all the airlines survive till then.
  4. The certification of the fly-worthiness of the airlines and other certificates would have to be renewed as most of these certificates would have expired by the time pandemic ends. How much more time will the airlines require to take to the sky after the pandemic. If they take longer, they lose more money and if they keep it ready, they would require cash to get things up and running.
  5. The airlines would need immediate cash to clear the pending payments of the vendors like Oil Companies, 3rd Party Ground Staff, taxing charges and other such expenses; coupled with the technicians required to keep the airlines in good-to-fly conditions. These would be additional hindrance in rebooting itself once the pandemic is over.

The aviation industry is in a catch 22 situation. They will need to have their Plan B or risk to be out of business. The priorities need to be worked out and payments re-negotiated and terms worked out with the governments. The only thing it cannot risk is the ire of the passenger and destroying its brand name.

Tough times are ahead and the time for planning and preparing for it is NOW

Mohammed Yasser Arafat

Business leader with 17+ years of experience across MENA & India. Proven success in exploring & developing new markets, and channel development with a challenger & experimental mindset.

4y

Looking forward for your views as well

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