Assessing the Impact of COVID-19 on Airline Operations

-By Gideon Osaka

Only recently, the World Health Organization officially declared coronavirus outbreak a pandemic.
According to the WHO, there are 118,000 cases, more than 4,000 deaths, and the virus has found a foothold on every continent except for Antarctica.

“We have never before seen a pandemic sparked by a coronavirus. And we have never before seen a pandemic that can be controlled at the same time,” WHO Director-General Tedros Adhanom Ghebreyesus said.

“Describing the situation as a pandemic does not change WHO’s assessment of the threat posed by this coronavirus. It doesn’t change what WHO is doing, and it doesn’t change what countries should do.”

Subsequently, the spread of Covid-19 is taking a huge toll in the aviation sector as huge losses have already been recorded in airline operations both locally and across the globe.

The International Air Transport Association (IATA) has estimated that the spread of Covid-19, has put airline operation loss at $113 billion.

The new figure was released following a review of financial implication on the public health emergency on the global air transport industry.

The association had said Airlines in Nigeria and other African countries would lose $40 million in revenue this year over flight disruption due to coronavirus spread. The figure is also expected to rise if the spread persists.

Since the outbreak in Wuhan China, the virus has spread to over 80 countries and forward bookings have been severely impacted on routes beyond China.

Financial markets have also reacted strongly as airline share prices have fallen nearly 25 per cent since the outbreak began, some 21 percentage points greater than the decline that occurred at a similar point during the SARS crisis of 2003.

To a large extent, this fall already prices in a shock to industry revenues much greater than our previous analysis.

Speaking recently, IATA’s Director General and Chief Executive Officer (CEO), Alexandre de Juniac, said the turn of events as a result of Covid-19 is almost without precedent.

“In little over two months, the industry’s prospects in much of the world have taken a dramatic turn for the worse. It is unclear how the virus will develop, but whether we see the impact contained to a few markets and a $63 billion revenue loss, or a broader impact leading to a $113 billion loss of revenue, this is a crisis.

“Many airlines are cutting capacity and taking emergency measures to reduce costs. Governments must take note.

Airlines are doing their best to stay afloat as they perform the vital task of linking the world’s economies. As governments look to stimulus measures, the airline industry will need consideration for relief on taxes, charges and slot allocation. These are extraordinary times,” de Juniac said.
Analysts predict that with the current situation, airlines in Europe and Asia would bear the brunt of the pain while carriers in Asia Pacific could lose out on sales worth $58 billion.

There are already more than 100,000 confirmed cases of Covid-19 worldwide, and nearly 3,300 deaths, mostly in China. South Korea, Japan, Italy and Iran also already suffering major outbreaks.

Travel restrictions and a lack of demand from customers have encouraged dozen of major airlines to cancel flights to and from mainland China because of the virus.
Transatlantic flights, as well as capacity on routes within Europe and the United States, have also been curtailed.

In another development, as the coronavirus epidemic continues to spread and take its toll on economies, estimates have put the lost passenger revenue at $29.3billion, with China the worst-hit.

Although global airlines have either withdrawn or scaled down operations into China, Chinese registered airplanes globally are also affected in the mounting losses, unlike African fleets that are largely registered in Europe and America.

In the same vein, a United States Federal Aviation Administration (FAA), and Nigerian Civil Aviation Authority (NCAA) licensed Flight Dispatcher and Ground Instructor, Victoria Adegbe, has advised sick passengers to abstain from traveling to save their lives from the ravaging spread of Corona virus.

Adegbe said sick passengers manifesting symptoms of other infections were more susceptible to contract coronavirus through air travel compared to other modes of transportation because of cabin pressurisation associated with air travel.

“I went on a research to see the categories of personal hygiene of people infected and discovered that over 75 per cent of those infected already had a prior disease such as diabetes, pneumonia and high blood pressure.

“You shouldn’t fly if you’re sick. Go to a hospital first and get treated. You should drink lots of water; keeping your throat hydrated decreases the chance of the Corona virus infecting you. Personal hygiene such as washing your hands with soap under running water and not in a bowl, using hand sanitisers and coughing inside a handkerchief,” she added.

It would be recalled that Nigeria recorded it’s first case of Covid-19 on February 28.
An Italian consultant working in Lagos was said to have tested positive to the virus but have since been quarantined and responding to treatment, health authorities have confirmed.