Due to the COVID-19 pandemic, the airline industry won't ever be the same again, with international travel expected to be problematic and longer days of leisure travel to be more expensive, according to aviation think-tank CAPA-Center for Aviation.
CAPA founder and chairman emeritus Peter Harbison said the global airline industry would be very different from the pre-pandemic past.
“There is something very important that most airlines either do not recognize – or don’t wish: the future airline industry will never be the same again,” Harbison said.
“Vitally, the 2021 industry will–at best–be half the size. Yet the industry is betting a substantial recovery in the second quarter and third quarter of 2021,” he said.
According to Harbison, there will be too many seats available as there will be an increase in the return of short-haul travelers resulting in cash burn.
Meanwhile, due to the decreased frequencies and fewer airlines of long haul trunk routes, with reduced business travel revenues, it resulted in higher fares for leisure travelers.
CAPA noted that the full service of the airline business model would be undermined because of the loss of business travel as well as the added complexity of re-establishing medium and long-haul international travel.
It said full-service carriers would need to reinvent themselves, including reducing costs.
As government protects its borders from new infections, health, and sanitation protocols are also expected to stay internationally. CAPA said standardized testing and recognition of vaccinations would be challenging for years.
“The airline industry that finally emerges will be very different from the one we knew going into this crisis,” it said.
According to the Air Carriers Association of the Philippines executive director and vice-chairman Roberto Lim, among local carriers, losses last year easily reached at least P60 billion.