Airline industry will never be the same again, says think tank

MANILA, Philippines — The airline industry will never be the same again due to the COVID-19 pandemic, with international travel expected to be problematic and long-haul 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.

Cash burn is expected to increase when short-haul travelers return, as there will be too many seats available, according to Harbison.

Long haul trunk routes, with reduced business travel revenues, meanwhile, are seen to have reduced frequencies and fewer airlines, resulting in higher fares for leisure travelers.

CAPA said the loss of business travel and the added complexity of re-establishing medium and long-haul international travel would undermine the full-service airline business model.

It said full-service carriers would need to reinvent themselves, including reducing costs.

Health and sanitation issues are also expected to stay internationally as governments protect their borders from new infection.

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.

Among local carriers, losses last year easily reached at least P60 billion, according to Air Carriers Association of the Philippines executive director and vice chairman Roberto Lim.