Impact of the COVID-19 pandemic on commercial air transport
The COVID-19 pandemic has had a significant impact on the airline industry due to travel restrictions and a decimation in demand among travelers.
Significant reductions in passenger numbers have resulted in flights being cancelled or planes flying empty between airports, which in turn massively reduced revenues for airlines and forced many airlines to lay off employees or declare bankruptcy. Some have attempted to avoid refunding cancelled trips to diminish their losses. Airliner manufacturers and airport operators have also laid off employees.
Only several months into the pandemic, the crisis was already the worst in the aviation industry's history, according to statements made in early 2020 by Airbus' Guillaume Faury,[1] EasyJet's Johan Lundgren,[2] United Airlines' Oscar Munoz,[3] Qantas' Alan Joyce,[4] and media outlets: the Financial Times,[5] The New York Times,[6] and The Independent.[7]
Air cargo[edit]
As passenger flights were cancelled, the cost of sending cargo by air changed rapidly. The cost of sending cargo across the Pacific Ocean tripled by late March 2020.[14]
Adjusted cargo capacity fell by 4.4% in February 2020 while air cargo demand also fell by 9.1%, but the near-halt in passenger traffic cut capacity even deeper as half of global air cargo is carried in passenger jets' bellies.
Air freight rates rose as a consequence, from $0.80 per kg for transatlantic cargoes to $2.50–4 per kg, enticing passenger airlines to operate cargo-only flights through the use of preighters, while cargo airlines brought back into service fuel-guzzling stored aircraft, helped by falling oil prices.[15]
Passenger airlines were enticed to convert aircraft.[16]
At the end of March 2020, cargo capacity was down by 35% compared to the previous year: North America to Asia Pacific capacity fall by 17% (19% in the opposite direction) Asia-Pacific to Europe was down by 30% (reverse: -32%), intra-Asia was down by 35%.
Lagging the capacity reductions, demand was down by 23% in March, resulting in higher freight rates: from China/Hong Kong, between 2 March 2020 and 6 April 2020 +158% to Europe and +90.5% to North America.[17] By May, freight rates from Shanghai were $12/kg to North America, $11/kg to Europe.[18]
The cargo shortage may evaporate if the global economic crisis depresses demand: the WTO forecast a global trade contraction of 13–32% in 2020.[19]
International mail between many countries stopped completely, either due to suspension of domestic service or lack of transportation.[20]
Business aviation[edit]
Business aviation was less affected than airline traffic, in that top executives' travel is often considered essential. London Biggin Hill Airport reported traffic to be around 30% of 2019 levels, with transatlantic traffic strong.[21] Once lockdown restrictions are eased, business aviation has an opportunity to capture premium passengers who might previously have chosen airlines, but who may prefer the social distancing afforded by a private jet.[22]
United States air charter travel strongly increased in February and March as airlines slashed schedules, making commercial flights increasingly unpredictable; however, some charter operators such as JetSuite subsequently saw a drastic drop in business as widespread stay-at-home orders took effect in April 2020.[23]