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Aviation to witness consolidation in coming months

The global aviation has witnessed negligible or no movement in the last three months where governments across the globe closed borders and skies for tourism. The Asia Pacific market which was looked upon as the most lucrative market for aviation in this decade has been unfortunately battered by the covid-19 pandemic. Experts feel that the aviation may not hit pre-covid numbers anytime soon.

Speaking about the future of aviation and pricing, Lindsay White, Vice President, Eastern Region (APAC and ISC), Etihad Airways, said, “The situation is dynamic and as countries are likely to open their borders at different times, pricing will as always be dictated by demand and supply. We have navigated the past few months by responding quickly and adaptability will be key as markets gradually start opening up. It’s fair to assume that there will be consolidation within the industry in the coming months. We are in the middle of a five-year transformation and already benefiting from the process of going back to basics and challenging all costs. That agility has allowed us to pivot to meet the challenges of the current crisis.”

Over the last three months, majority of the airlines have been operating repatriation flights and cargo business. Now, with certain relaxations across the globe and destinations looking to restart tourism, aviation will see a surge in the coming months.

V Ravindran, Regional Manager- India and Bangladesh, SriLankan Airlines said, “95 per cent of the aviation activities has been affected and the revenue is almost zero for almost all the airlines with no exception.  Srilankan is ready to commence operations any time after August 1, 2020. Even if we start our operations by 1st week of August it is unlikely that we will operate the same scale as we did pre-Covid era.”

Also, the aviation sector is closely interlinked with many other sectors which will play a crucial role. With majority of the economies impacted, once again will affect aviation post resumption. “The pandemic has had an unforeseeable impact on the aviation industry. There were several factors that were driving the growth of the aviation industry prior to the Covid-19 pandemic such as increasing disposable income, competitively priced airline fares, new travel trends, among others. However, since the pandemic, each of these factors have been deeply impacted, slowing down the industry at a global level. It will likely take a while to fly at full capacity again. Historical trends do indicate that the industry will return to pre-Covid-19 levels. It is just a matter of when,” Calvin Chan, Chief Commercial Officer, Scoot added.

The face of air travel will witness a sea change post recommencement. There will be certain short term and permanent changes which the airline industry and travellers witness. On the forefront, safety and hygiene will play the key role like any other industry.

 “Since the outbreak of this pandemic, several organisations have put the wellness and wellbeing of their employees and customers at the core and this is sure to sustain. The renewed air travel experience will focus on wellness of both, guests and the airline and airport staff, and that will remain utmost priority, even in the post-pandemic scenario. We have utilised the past few months to innovate and adapt in order to ensure that we provide a hygienic and safe travel experience to guests. This includes self-service check-in, contactless health screening and thermal cameras that can monitor body temperature at Abu Dhabi airport. These are path-breaking innovations and will forever redefine travel experiences,” White said.

Contactless services are here to stay, and technology driven innovations will play the gamechanger for airlines. “It is likely that as with post-9/11 security measures, some will be temporary while others will be permanent, however it is too soon to say which. There are measures that are currently in place to ensure everyone is safe, such as wearing masks during the flight, pre-assigned seating to enable safe-distancing, enhanced cleaning and passenger care kits that contain items like anti-bacterial wipes, sanitizer and a surgical mask. For measures that we hope are temporary - like limits on carry-on baggage to minimize congestion in the aircraft during boarding and disembarkation or reduced in-flight services to reduce physical interactions – they are necessary for safety for now, and we hope customers can understand the reasons for these measures,” Chan added.   

Another major step by the aviation industry in light of the pandemic, is the relaxation of bookings and refund policies. Majority of the airlines have come up with customer friendly approach which will play a major role in travel decision making.

Speaking about the engagement with the travel trade White said, “We have taken every measure to extend maximum flexibility to our partners and our teams are working around the clock to support our trade partners to make sure they are the first to know about our new policies, procedures and travel news. Some of these include flexibility with bookings. We are focusing largely on seamless and consistent communication with them. We have conducted regular webinars in order to keep our trade partners updated at all times, informing them of the changes and temporary measures implemented by Etihad Airways.”

Airlines are looking at engaging with digitally with the travel fraternity and keep transparent communications so as to instill confidence. Ravindran said, “Through the Sri Lankan Tourism authorities we have had few Webinars to share the future activities with our stakeholders. We are already carrying out awareness programs through social media and other channels about Sri Lanka is safe and the precautions and SOP’s in place and to be adopted when the country is open for tourism along with the SriLankan Airlines.”

Speaking about the measures to instill confidence Chan said that apart from safety measures the airline is promoting the flexibility. He said, “Aside from our enhanced safety measures, to give customers added flexibility and instill confidence, we are one of the few airlines in India offering eligible customers the option of refunds in cash in full should their flights be cancelled during this time. Alternatively, customers also have the option of refund in vouchers in 120 per cent of the itinerary value. We have received about 5,000 refund requests from customers in India, and more than 97 per cent have been processed so far. Moreover, to allow customers to book with confidence, new bookings made from now till end July will have the option of a one-time free date change. Flight date change can be performed up to four hours before the scheduled departure time of the original booked flight, and fare differences apply.”

Etihad has introduced a new wellness campaign, ‘Etihad Wellness’, taking a step forward the group has also recruited a wellness team, which is another innovative concept in the industry.

White added, “In order to ensure safe travel experiences, we launched ‘Etihad Wellness’ last month, an expanded and more comprehensive health and hygiene programme and customer guide. This builds on the stringent measures that have already been put in place by the airline to deal with COVID-19. This is being championed by a team of specially trained ‘Wellness Ambassadors’, an industry-first initiative. They are a dedicated team, trained at our facilities in Abu Dhabi, and will provide essential travel health information and care so guests can fly with greater peace of mind.”

Industry experts believe that airlines will never operate on certain routes post recommencement. “It is possible that certain routes may not be deemed feasible to operate for the foreseeable future due to the current situation. However, it does not mean that there will never be a chance to reassess the situation down the line. Airlines will need to be nimble in this regard, or risk missing out on opportunities,” Chan informed.

Echoing similar opinion White added, “A pragmatic approach will have to be maintained towards network planning, increasingly focusing on routes that make financial sense. The manner in which airlines will gradually return to a full network of international flights depends on various criteria, including directives by international governments. Etihad has been and will remain very nimble and adaptive.”

During the pre-covid era, airlines used to generally engage in fare wars to attract more customers, which may not be the case anymore.

Speaking about the way forward, Ravindran said, “Cost structure of Airlines to Airlines differ due to the Capital, investment and the liabilities of the respective airline. The way forward is to be competitive in line with other airlines to sustain the market share and the operations.”

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