Adiel Mambara IT has now been over two years since the beginning of Covid-19 and the world seems to be making progress in the battle against this dreadful virus.
There has been a good vaccination uptake of the world’s population, border restrictions being lifted and in many jurisdictions a sense that governments are beginning to win that battle against Covid by keeping it under control.
However, we cannot underrate the human cost of Covid-19 that has been significant. Globally as of August 7, 2022, there have been almost 584 million confirmed cases of Covid-19, including 5,84 million deaths.
With the lifting of travel restrictions in most countries, it was remarkable to see the industry bounce back from the brink. I was meeting up with our business partners a few weeks ago, attending business events. It was exhilarating to see business being conducted as usual. It almost felt as if the past two and half years were a mutual sabbatical, and nothing had changed.
Aviation has continued to weather all sorts of crises and exemplified long-term resilience, becoming a vital means of transport.
Historically, air transport has doubled in size every 15 years and has grown faster than most industries (ACI,2022).
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However, there is no sugar coating the current situation. Aviation continues to be one of the sectors hit hardest by Covid-19.
Over the past few months, aviation has been struggling to cope with pent-up summer demand in many airports across the world, especially in Europe. Low unemployment in some countries has been fuelling a resurgence in demand that has seen passenger numbers reach 83% of pre-pandemic levels in 2022.
The unprecedented scenes we witnessed on our tv screens, with long queues snaking across terminals at the airport, delays, and passengers departing and arriving without their bags is not something you see every day, but it is something that should never be allowed to happen in the future.
In the current climate, this of course is expected, given the harmful effect of Covid on the entire aviation ecosystem.
As Covid-19 enters its endemic stage in most parts of the world, airlines are expected to reduce their economic losses to -US$9,7 billion (improved from the October 2021 forecast for an US$11,6 billion loss) for a net loss margin of -1.2% (IATA,2022).
It is quite tempting to pin the blame solely on the pandemic-induced plunge in passenger traffic, however, that would be to ignore the reality of the airline industry’s underlying and long-term health problems which must be addressed.
In the media, the headline ‘Chaos at Airports’ is the favourite buzz words. For some of us who work in this amazing industry, our frustrations are hearing an increasing tone of language in the words like, ‘his fault’, ‘her fault’, ‘their fault’, and ‘not me’.
This article does not seek to finger point. However, I do need to put my airline hat on and set the record straight.
To those who blame the airline industry and that it is somehow the airline’s fault, it is simply not.
These issues are not unique to one part of the aviation ecosystem as the industry recovers from the impacts of the pandemic, but they are systemic across the entire aviation sector in the world.
As airlines have continued to ramp up their operations as they move past Covid-19, the industry has at the same time faced the challenge of meeting an increased demand for travel with fewer employees and airlines struggling to crew flights.
Across the aviation industry, employees were furloughed or made redundant for companies to survive the impacts of global lockdowns. But as demand has increased and jobs become available, people have been selective about what jobs or careers they choose. Quite rightly!
With so many aircraft grounded, flights suspended, and labour constituting a major component of airline costs, it was perhaps inevitable that airlines and suppliers in the aviation ecosystem would seek to further reduce costs by decreasing the size of their workforce at the peak of Covid-19.
Fast forward to 2022 the industry’s capacity has been a huge challenge for the airport community as the struggle for resources.
With little choice, airports have been forced to introduce interventionist policies to temporarily reduce their terminal capacity limits.
The main reason given in most cases was often under the guise of safety concerns, but there are those that argue that the shortage of skilled manpower has been the driving force behind some of these decisions.
For airlines, this has meant significant reductions in their schedules which of course has also impacted the travel plans of travellers worldwide.
In areas such as airline ground handling, there has been a competition to recruit and train skilled workers from the same labour pool.
Ground handling is a highly competitive, labour-intensive, low-margin business, characterised by short-term contracts. There are some who suggest that the impossibility of scaling up staffing to levels required, amid a downward spiral of low wages and compromised service quality is a huge challenge (ACI Europe,2022).
Others argue that airlines have driven down costs over the past few years, and when Covid-19 started this was one of the first costs airlines slashed during the pandemic. However, other practitioners refute this assertation. Nevertheless, it is a known fact that across Europe, over 50% of ground handlers have left the industry.
A recent study by KMPG suggests that labour accounts for 70% of ground handling costs, wages, and security.
At UK airports, vacancies for cleaners are up more than 700% in a year, 200% for security staff, and 138% for baggage handlers, according to job search engine Adzuna.
That said, we need to recognise that the ground handling ecosystem will need to evolve rapidly in response to these technologies and others.
Players looking to thrive in the post-Covid normal need to assess now both the threats and opportunities presented for their long-term strategy.
The notoriously fragile world of aviation operations remains vulnerable to external disruptions. Apart from the risk factors already mentioned, there continues to be further challenges on the horizon. These risk factors include and are not limited to:
Russia’s invasion of Ukraine is having an impact on air traffic across Europe. About 7% of international passenger traffic (RPK) would normally transit Russian airspace (OAG 2021 data), which is now closed to many operators, mostly on long-haul routes between Asia and Europe or North America. There are significantly higher costs for re-routing for those airlines affected. Eurocontrol, the European Air Traffic Management organisation, assumes Russian and Ukrainian airspace will remain closed for the next three years in its latest air traffic forecast.
Interest rates are rising as central banks combat inflation. Aside from those carrying debt (who will see inflation devaluing their debts), inflation is harmful and has the economic dampening effect of a tax by reducing purchasing power for air travel.
The power of collaboration has been an overriding theme throughout the pandemic and must be demonstrated once again by all stakeholders in the aviation ecosystem. Requiring trust, communication, respect, and compromise when partnerships work well, can help overcome almost any obstacle the aviation industry faces now and in the future.
- Mambara is a Zimbabwean, who has demonstrable working experience within the travel industry for over the past 15 years. He writes in a personal capacity.