COVID-19 has left no industry untouched. With the airline industry hit harder than most, we have been left pondering whether big jets will ever fully return to the sky.
The terrible COVID-19 pandemic has poleaxed the tourism and hospitality industries, decimated business travel, and severely restricted international dialogue. Not since the darkest days of World War II has it been near impossible to fly wherever and whenever we wish.
There are those who believe that once clinicians have gotten the coronavirus under control through mass vaccination, people will start flying again. Indeed, bookings to the world’s favourite leisure spots in the northern summer of next year are encouraging. They are so encouraging, in fact, that the ever optimistic Michael O’Leary has ordered another 75 of the controversial Boeing 737 MAX aircraft for Ryan Air. When added to the 135 aircraft ordered earlier, the total spend of Ryan Air, Europe’s biggest carrier, adds up to $2.2 billion.
Not only may O’Leary be seeing the future of aviation through rose-coloured spectacles, but he is taking a big gamble by making so big a commitment to an aircraft that has only just taken to the skies again after bringing substantial reputational damage to Boeing and a severe indictment from airline regulators. The Boeing 737 MAX was grounded last March only weeks after it had been put into service by some of the world’s leading airlines, including United and Ryanair. The grounding followed two tragic crashes in which 346 people were killed. Boeing had failed to spot design flaws in the planes flown by Ethiopian Airlines and the Indonesian-owned Lion Air. Many in the travel industry believe flyers will be leery about boarding the Boeing 737 MAX, whereas O’Leary thinks they will forget and will be attracted by the cheap fares.
That could be the case, but there is another potential problem for international flyers – the cheap fares of the early years of the 21st century will no longer be available. Even before the coronavirus struck and decimated the airline industry, most of the major carriers were already operating at over capacity and storing redundant aircraft in the dry air of the world’s deserts. Some of the better managed airlines, like Qantas, cancelled or postponed orders they had placed for new jets being turned out by Airbus Industries in France, or by Boeing in Seattle. Others held off leasing the larger and quieter, more fuel-efficient planes on offer, sticking with their old Boeing 747s, despite their high operating costs, noise levels, and greenhouse gas emissions.
By the time COVID-19 struck early this year many airlines were making losses and cutting staff. Within weeks, as the pandemic spread from China to Europe and across the world, people stopped flying. In February it was possible to fly almost everywhere. By March, it was hard to get to almost everywhere beyond the borders of the country in which you lived.
President Donald Trump did little to combat the virus spreading like wildfire through the United States, but for weeks stopped transatlantic flights from landing at JFK. The Kangaroo route between London and Sydney was suspended for the first time in its history, leaving the Australia Post and Royal Mail to make other arrangements for mail by air. Even when some flights resumed, border restrictions and enforced quarantine for arriving passengers in many countries discouraged or prevented travel.
It’s not just face-to-face meetings or business and trade negotiations that have been blighted. Almost all international conferences have been cancelled, postponed, or conducted via Zoom. This has been the case with scientific and medical conferences and seminars, academic gatherings, geopolitical negotiations, and top-level summits for the G7, G20, the European Union, and ASEAN.
The result is near paralysis in the world airline industry, with mass lay-offs, furloughs for retained staff, and wage cuts. On the brave assumption that mass vaccination in much of the industrialised world and beyond will control then eradicate the pandemic, it is reasonable to expect that airline services may return to a new normal by the middle of next year. But that new normal will mean fewer flights, fewer passengers, and higher fares – as the following factors come into play.
Across the globe, unemployment is likely to double that at the start of 2020, in some countries more. That means fewer people flying on holidays or crossing the world to see friends and relatives. There will be some recovery in business travel, but not enough to provide the airlines with the premium revenue they once had. Airlines will also want to recover some of their immense losses, and so fares will go up. Even low-cost airlines like Ryan Air and Jetstar will find ways of raising revenue by, for example, charging more for baggage, seat reservations, and in-flight internet access. Airline taxes will almost certainly go up, adding to the cost of flying. The European Union and the Biden administration in the US, supported by many Asian democracies, are determined to make cuts in air pollution and greenhouse gas emissions faster than previously planned. A substantial increase in air travel tax is an easy option for strapped governments, though it will do little to reduce budget deficits.
And that is the point. For several decades, “Big is Best” has been the key driver in the international airline business. As we approach the “new normal,” big is out of fashion. The jumbo jet, the Boeing 747, the plane that brought international travel to the masses – and the flat bed to first class travellers – is heading to the knacker’s yard. Famous airlines like Qantas, British Airways, KLM, and Lufthansa have stopped flying them, not even seeking a buyer. British Airways is keeping a 747, in the livery of its predecessor BOAC, as a museum piece. Two others have been bought for air museums, but the rest have been sent to Spain to be broken up for scrap. Boeing is to cease manufacture in 2022. One of its few orders this year has been from the White House, to the specification of Trump, as a replacement for Air Force One. The new Boeing 787 Dreamliner is smarter and more sophisticated, and much quieter, but lacks the cavernous cargo space of the 747.
So, what of the other big jet, the Airbus A380? It is much loved by passengers for its comfort, but is expensive to operate unless almost at capacity, and its cargo space is smaller than the 747. The A380 order book has shrunk, and some airlines have mothballed the aircraft in the hope of better days ahead. Those days are a long way off. International travel has changed forever.
Colin Chapman is a writer, broadcaster, and public speaker, who specialises in geopolitics, international economics, and global media issues. He is a former president of AIIA NSW and was appointed a fellow of the AIIA in 2017.
This article is published under a Creative Commons Licence and may be republished with attribution.