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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]

reduced its wing production on factories in Broughton, Filton and Bremen, and reduced working hours in the sites. Its French and Spanish sites suspended production for several days before a partial resumption on 23 March.[61] Monthly production was cut to four A220s, forty A320s, two A330s and six A350s.[62] Airbus delivered 122 aircraft in the first quarter, 40 fewer than in the previous year, and 60 could not be handed over due to travel restrictions. Airliner revenues were down 22% to €7.5 billion, earnings dropped by 82% to €57 million, and their adjusted EBIT was down 59% to €191 million. The company free cash flow was a negative €8 billion, including the €3.6 billion bribery penalties, similar to the negative €4.3 billion of the previous year without. For the first quarter, Airbus' total adjusted EBIT was halved to €281 million, and it made a net loss of €481 million (compared to a €40 million profit in the previous year). In 2020, capital expenditure should be reduced by €700 million to €1.9 billion.[63]

Airbus

froze hiring and reportedly laid off employees due to a large number of cancellations, which outpaced new orders in February 2020.[64] On 11 March, it was revealed that Boeing was to exercise its whole US$13.8 billion loan facility (which it secured in February). Prior to the pandemic, Boeing's business had been impacted by groundings of its 737 MAX aircraft.[65] By 7 April, Boeing had indefinitely suspended production at Boeing South Carolina and Puget Sound, Washington, completely halting the assembly of its commercial aircraft.[66] On 21 April, Boeing announced a management structure overhaul.[67] On 27 May, it announced plans to lay off 12,000 employees, while it reported zero new orders in April 2020.[68] In October, it announced plans to lay off thousands more employees through the following year, with the expectation that it would end 2021 with 19% fewer employees than its pre-pandemic workforce.[69]

Boeing

on 26 March 2020 announced a suspension of most Canadian production in Ontario (for 2 weeks) and Quebec (until 13 April), in addition to halting production in Northern Ireland. 12,400 Bombardier employees in Canada (70 percent of the workforce) were furloughed.[70]

Bombardier

deliveries of CFM LEAP engines across the first nine months of 2020 fell to 622 from 1,316 in the same period in 2019, and 123 CFM56s against 327, while Leap fleet cycles were down 15% year-on-year and CFM56 cycles were 48% lower.[71]

CFM International

reported deferment of orders of its commercial aircraft.[72] It also suspended its financial guidance for 2020.[73]

Embraer

announced on 23 March 2020 that it would cut one tenth of employees in its jet engine arm, amounting to around 2,500 employees, in addition to furloughing around half of its maintenance and repair staff.[74]

General Electric

in May 2020 halved the budget of its SpaceJet programme and repatriated all work from the US to Japan.[75] In October 2020 it announced a further budget reduction and put almost all SpaceJet activities on hold.[76]

Mitsubishi

planned to cut 9,000 jobs, mainly in its civil aerospace division, and mainly affecting its UK site at Derby.[77]

Rolls-Royce

Inc., the parent company of Textron Aviation and Bell Helicopter, announced a 1,950 jobs layoff.[78]

Textron

Russian Industry and Trade Minister said "is quite balanced as a production unit". Because recovery is quicker in Russia than abroad, the production program is drafted for 2020–2021. Also, the market will require up to 1,500 new civil jets within the next 15 to 20 years, adding that there is scope for optimism in the domestic industry.[79]

United Aircraft Corporation

Argentina: The government suspended domestic flights in March 2020 during the beginning of the pandemic in the country and imposed restriction of international flights for several months. In June 2021, the government imposed a daily limit of 600 entries per day to prevent the entry of the .[111] On 3 July 2021, domestic flights resumed between some cities in the country.[112]

SARS-CoV-2 Delta variant

Canada: Canadians were advised to avoid non-essential travel on 13 March 2020, while Canadian border was closed except for Canadian citizens and permanent residents on 16 March ( closed later on 18 March).[113] Essential travel is exempted, and international travellers must enter through Calgary International Airport, Vancouver International Airport, Toronto Pearson International Airport, or Montréal–Trudeau International Airport with mandatory 14 days' quarantine.[114] The border closure has been extended multiple times and remained closed until at least 21 August.[115] Most transborder flights have been cancelled since late March due to the lack in demand.[116] The prolonged international travel ban resulted in Air Canada's loss of C$1.75 billion in August and they have since urged for easing in travel restrictions.[117]

Canada–United States border

China: Roughly two thirds of international flights to and from China were cancelled in February 2020. Flights between Japan and China saw a 60 percent reduction in traffic, while the US and China saw a reduction of 86 percent. Two thirds of domestic flights within China were similarly cancelled, numbering around 10,000 flights daily, while the ticket prices for remaining flights dropped—South China Morning Post reported that a seat for a three-hour flight between Shanghai and Chongqing cost as little as 29 Yuan (US$4.1). Passenger traffic between 25 January and 14 February dropped by 75 percent compared to the same period in 2019.[119] Since 23 March 2020, all international passenger flights bound for Beijing are diverted to twelve designated first points of entry, under the Civil Aviation Administration of China (CAAC)'s guideline.[120] Since 29 March, all international flights to and from China are reduced, with flight limit.[121] Since 4 June 2020, CAAC decided to allow more foreign airlines to operate passenger flights to China from 8 June, while "circuit-breaker" measures would also be implemented.[122]

[118]

Colombia: Colombia ceased all commercial air travel at the beginning of the pandemic. Domestic flights resumed gradually beginning on 20 July 2020, Colombia's Independence Day, with a single flight of less than 200 km. El Dorado International Airport in Bogotá reopened on 1 September with 38 flights.[124]

[123]

Denmark: Passenger figures went down by around 99% in April 2020 compared to April 2019. This affected both domestic and international flights. Denmark closed its border to all tourism and other non-priority travel. Two noticeable cases were which had no passengers in April, and Bornholm Airport which had 16% as many passengers in April 2020 compared to 2019. On most domestic air routes car travel is possible with 3 to 4 hours' drive time, but Bornholm is an island where ferry and air is the only possibilities. See also: List of the busiest airports in the Nordic countries#2020 coronavirus statistics

Aarhus Airport

Fiji: In April 2020, suspended all international flights and the main international airport in Nadi was closed.[125] As a result, the national airline terminated more than 700 employees.[126][127] On 26 May, the government issued guarantees in support of FJ$450 million (US$208 million) worth of initiatives aimed at strengthening Fiji Airway's cash reserves.[128]

Fiji Airways

India: Indian airlines are estimated to report a loss of US$600 million (not including state-owned ) for the January–March quarter. The government of India is planning a rescue package for the aviation industry for as much as ₹120 billion (US$1.6 billion).[129]

Air India

Indonesia: On 2 April 2020, Indonesia banned foreigners from entering their borders. Starting on 24 April, all passenger flights, except those carrying medical personnel/supplies or repatriating Indonesian citizens from abroad/foreigners from Indonesia, were banned. After implementing health guidelines, the ban on passenger flights was lifted on 7 May, starting with the resumptions of domestic passenger flights.[131]

[130]

Italy: Due to the outbreak and the ensuing national lockdown, thousands of flights to and from Italy were cancelled.

[132]

Mauritius: As from March 2020 all international flights to was suspended. The national carrier, Air Mauritius entered voluntary administration after making losses for quite years.[133]

Mauritius

Nepal: From March 2020 to prevent the importation and spread of coronavirus infection, all aircraft including domestic and international (with the exception of humanitarian flights) were banned arriving in Nepal.

[134]

Pakistan: The had allowed domestic flights to resume, following suspension during the COVID-19 pandemic on 16 May.[135] Six days later, Pakistan International Airlines Flight 8303 crashed in Karachi from Lahore.[136]

Government of Pakistan

Philippines: The National Economic and Development Authority projects a loss of at least 1.2 million tourist arrivals assuming that the pandemic persists by June 2020.

[137]

South Africa: had been placed in bankruptcy protection in December 2019. However, with the pandemic leading to the complete grounding of all flights, and the government refusing to make more finance available, the airline is heading for a winding down process, or liquidation, depending on the outcome of negotiations with unions and workers on retrenchments.[138]

South African Airways

Turkmenistan: From March 2020 to prevent the importation and spread of coronavirus infection, all aircraft arriving in Turkmenistan from abroad are redirected to the .[139] Passengers arriving from outside of Turkmenistan are carried screened for signs of active infection, in particular, body temperature is measured. Visitors who are flagged during screening are transported to an allocated hospital. The airport medical center is equipped with personal protective equipment. After passing a medical examination, the plane, together with passengers on board, leaves for Ashgabat. Departures from Turkmenistan are carried out from Ashgabat International Airport. Persons authorized solely for diplomatic, official, humanitarian purposes are allowed to enter the territory of Turkmenistan.[140]

Turkmenabat International Airport

United Kingdom: On 22 February 2021, UK's PM Boris Johnson announced that leisure travel overseas will not start until 17 May.

[141]

United States: Multiple airlines waived fees for flight booking changes and cancellations during the coronavirus outbreak following a request from Sen. .[142] Between 20 January and 7 March 2020, stock prices in US airlines decreased by 30 percent.[143] Flight fares for domestic flights also dropped.[144]

Richard Blumenthal