Aviation ‘cannot take zero-risk approach’ to return

The aviation industry cannot take a zero-risk approach to travel during Covid, according to a leading expert in the sector.

John Strickland, of JLS Consulting, said the air travel industry had been trying to work together to come up with “solutions” to travel during Covid but had been scuppered by “a cobweb of confusion” from the world’s governments.

Speaking remotely as part of the pre-World Travel Market London Travel Week, Strickland said: “Airlines, airports, regulatory bodies are trying to work together to try and find solutions to get travel going again but that’s completely the opposite to what were seeing with governments.

“Every government is doing it’s own thing, we have a cobweb of confusion around the word about what governments are doing in terms of border closures, quarantines and views about testing for the virus, and so on. We need to see a much closer co-ordination there, and indeed a willingness of governments to work with the industry. The industry has rather been caught out by asking for a number of things to be done and putting forward constructive proposals and governments springing surprises about changes in travel regulations. It’s as if governments have forgotten the very broad economic value of aviation, not just in terms of its own employment, but in terms of its support of tourism and the wider economy.

“We can’t take a zero-risk approach on this. We have to make sure air travel is safe from a health point of view, just as we always have done with every other aspect of safety, but that does not mean a zero risk approach – which is unfortunately the rather black and white approach we see taken at the moment.

Strickland said the aviation sector broadly predicts its recovery will take four to five years, and he said there was “no doubt” long-haul travel is going to be “the hardest hit, with the complexities of crossing boarders and different government policies.”

Noting that long haul was down 83% in August, and is forecast to be 90% down in most major markets in the next few months, he said: “The real tough nut to crack in terms of getting any cover is the long-haul market.”

But Strickland said the “biggest question” for airlines was the demand for premium cabins and business travel because companies have cut down on business travel. “I’m of the school of thought that this will not all come back,” Strickland said, noting the rise of online video meeting software during the pandemic – and companies trying to show green credentials by limiting the number of flights taken by executives.

He said airlines that rely on corporate traffic will face a “major challenge” and “really have to rework their business models entirely, or look for new customers to fill these business class seats”.

Strickland noted the delay in aircraft orders in 2020 against pre-Covid projections, and the “massive acceleration” of retirement of older aircraft.

“What we are going to see in the future, as aircraft are replaced is a move to smaller aircraft, even in the long-haul arena,” he said.

“In some cases there will be smaller, narrow-bodied aircraft like the Boeing 787 Dreamliner or Airbus’ A350. And now, with improved technology, we are seeing airlines going down to smaller types on long-haul services, such as the Airbus A321 or Boeing 737 Max once that is restored to safe service.”

Strickland noted Iata and Boeing projections which showed a short-term reduction in demand for new aircraft, but forecast levels will be back on track after four or five years.

Strickland also questioned whether hub carriers’ model will still be valid in the recovery from Covid, and said: “The volume may be lower but many point-to-point markets are simply not big enough. They can only be served by feeding passengers through a hub and feeding a composite of customers onto one long-haul departure.

“So it is still needed but airlines might have to work harder to make it a seamless hassle-free product. But the model will still be there.”

He said low-costs carriers will be “the winners” from the Covid crisis because they can be “more nimble” and “take advantage” of issues at other carriers.

But he said he expected long-haul low-cost to struggle. “This is a severely challenged business model,” he said. “I’m not sure how, if at all, it is going to make it.”

Strickland said the “new niche” of ultra-long-haul, such as direct services between the UK and Australia, will rely on the premium cabin demand. “This will be an interesting model to monitor,” he said.

Traffic for passengers visiting friends and relatives was among the few sectors that “very much want to travel”, he said, but also noted the rise in holiday traffic over the summer period showed the “pent-up demand for leisure travel”.

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