Today, the aviation sector is going through perhaps the most difficult period since its inception. With an aviation expert and Head of the Aviation Management Study Program at Kazimieras Simonavičius University Assoc. Prof. Dr. Konstantinos Kalligiannis we talk about the coronavirus crisis, possible consequences and solutions.
What is the situation in aviation these days?
Most aviation experts consider this crisis as the biggest ever challenge that the aviation industry has ever faced since its beginning. It is difficult to find words to fully describe it. I believe that the only single word that is close in describing this situation is “Chaos” (as a Greek, I understand better its etymology and its origin from the Greek Mythology), meaning “complete disorder and confusion”.
There are many problems that the aviation industry is currently facing but ultimately airlines, airports and ground handlers are actually fighting for their survival in this particular moment of history, since all of them are facing huge (to a different extent each of them) cash-flow and liquidity issues.
Do you see any bright side of this situation?
I is difficult for me to find a bright side of this crisis. Off course, I am very proud of the reaction of the aviation industry’s organizations and employees that have really given their heart and souls (and by putting their own health at risk) for continuing serving the people that are in high need of flying and predominantly returning back home with their families. Many airlines are carrying out rescue flight (e.g. such as Air Baltic, Aegean Airlines and many others), whereas many airlines also operate flights for transferring medical equipment and supplies (e.g. Smartwings, which has created the largest air bridge in the history of Czech Republic between its country and China, in order to transfer millions of respirators and medical supplies offered by the Chinese Government, as well as Air Serbia, which also transferred medical staff and aid from China to its own home based country).
Will this crisis have long-term effects on aviation?
I believe that this crisis will have severe effects for aviation in the short term. In the medium and long terms, the aviation industry as it has demonstrated in all major global crises in the past, it has a remarkable capability in bouncing back stronger (following all crises it has faced since its birth, such as Oil Shock Recessions; Gulf Wars; Global Financial Crises; 9/11; SARS; etc.).
Definitely, in the short-term, there will be severe effects, with a huge reduction in global air travel demand, many aviation employees will lose their jobs, overall air fares will increase significantly and the world will be less connected internationally as it is now. Nevertheless, I strongly believe (based on the history of aviation) that in the long-term aviation will continue its expected high growth and development and will remain the most exciting, international and fast evolving industry that any employee could dream for building a career.
How do you think, what is the future of aviation after the crisis?
I should note that there are different views from aviation experts. On the one hand, you have the group of experts that believe that this crisis will change the aviation industry permanently and will result in the number of airlines and flights being operating globally to get reduced significantly, resulting in a much less competitive airline global market and much higher air fares. Therefore, people will fly much less than they are currently used.
This view also supports that the pandemic will also result in a more strict air passenger processing (more time-consuming and inconvenient), the travel restrictions will remain for much longer time than expected, and even when the virus outbreak will get under control during the next months, there may be regularly reoccurring outbreaks (either from the same virus or new ones, such as the Hantavirus), with some cities and countries being affected much more than others. Freedom of movement (mainly international but also domestic) may remain subject to sudden regulatory changes and restrictions.
Airports and airlines will need to develop more sophisticated mechanisms and employ technological equipment for determining whether passengers are eligible to fly, based on their citizenship, country of residence, health status, recent travel history, and many other factors that could also be considered in the future. Certain passengers will feel that their personal data privacy is being compensated and may defer from flying overall for this reason as well.
Moreover, there may be an increasing germophobia tendency among the public (as it happened in the past with Ebola and SARS) and people will avoid flying and travelling in general.
Business travel could also be affected since companies will get more used to virtual meetings and virtual offices (which in my view this last potential trend is not bad).
These are all of the main arguments from the pessimistic view regarding the future of aviation, which I strongly believe will only be short-term as in any such major crisis during the past. I still remember that I was submitting my thesis on Friday the 14h of September 2001 and on Tuesday (3 days before), 9/11 took place and all of my friends and relatives were advising me to change industry since aviation will never recover. How did I react to their advices? I continued my aviation studies at a higher level in order to be better qualified and equipped in a career in aviation and following nearly 20 years in aviation I feel blessed in serving this amazing industry and happy that I ignored my friends’ advice on this matter.
In your view, what actions should be taken to help aviation industry to go through this crisis?
Although that I am a great supporter of aviation deregulation and liberalization, I believe that considering the magnitude of this crisis (Force majeure in legal terms), I strongly believe that Governments should implement generous and immediate measures for supporting the aviation industry in response to the colossal financial pressure from the spread of Coronavirus. My view is that Governments need to take into consideration the significant role of aviation both in terms of social and economic impact. It is crucial to secure the aviation sector both nationally and internationally, since it provides countries with critical infrastructure and a large number of jobs, as well as business and social connectivity and international exposure. The CEO of Corsair supported that a “Marshall Plan” is required for saving the aviation sector at this moment, which I believe sounds correct.
How much time it will take for aviation to recover after this crisis?
Looking at the historical global air traffic data from previous pandemics, global air traffic has always been fully recovering the following year after the main crises occurred and continued its growth rate trend from the point it was before such an event took place. However, the current coronavirus pandemic already has and is expected to have even higher impact than all of the previous pandemic crises, so it is very difficult to predict with certainty. Moreover, this is a medical and pharmaceutical issue and therefore I have not the required expertise to predict a time-schedule that the health industry will find a solution to this problem for being able then to gradually initiate the aviation sector’s recovery.
Is this the first major challenge for aviation in its history?
Aviation and the word crisis are closely related, but aviation professionals have been educated, trained and equipped for dealing successfully with such crises and select, develop and implement the most appropriate contingency plans. All crises mentioned at the beginning of our interview (e.g. Oil Shock Recessions; Gulf Wars; Global Financial Crises; 9/11; SARS; etc.), consist major challenges that the aviation industry overcame successfully. Briefly, the common strategic approach that aviation companies have implemented for overcoming these crises is expanding their level of sophistication and becoming more productive and efficient.
Employees have also realized that the aviation job market becomes more competitive and demanding after such events. For this reason, they enhance both their industry knowledge/sophistication as well as their interpersonal and managerial skills for securing a challenging job within the aviation industry after the end of the crisis and contributing significantly by enhancing their organization’s effectiveness and efficiency.