Planning airline recovery during coronavirus outbreak
AIR Convention Digital Week will host 30+ global aviation executives who discuss how aviation is reshaped by the virus effects and talk over ways of recovery amid the COVID-19 outbreak. Watch the event on aerotime.aero, every day at 2 CET on June 15th – June 19th, 2020. More details about AIR Convention Digital Week: digital.airconvention.com
Over the past few weeks worldwide (and past few months in Asia), the aviation world has been grappling with the changed reality amid the coronavirus COVID-19 crisis. As world closed borders, airlines were forced to cancel flights in bulk, now resolving to grounding better part, if not whole, of their fleets and letting people go on indefinite and often unpaid leaves, making obscure promises of coming back from this stronger than ever. But what does this recovery from the coronavirus crisis actually entail? And what will the post-Coronacrisis world look like, once travel picks up again?
AeroTime News spoke with Dimitrescu Bogdan, aviation expert and the co-author of “Coronavirus Recovery Plan for Airlines”, to discuss how the virus has instantly changed aviation, the most prominent mistakes air carriers are doing, and the critical steps airline needed to not only survive the crisis, but emerge from as winners.
“The airlines that were mainly concerned with shareholder’s interest and growing equity value will come out of this crisis damaged the most.”
While the aviation industry has proven its resilience during crises many times before, some airlines CEOs are now saying that the current one, caused by the COVID-19 outbreak, is something never seen before. How do you see this crisis? How is it similar, and how does it differ from the ones seen in the past?
Indeed, the magnitude of this current crisis is unprecedented, due to the level of world connectivity, globalization and interdependence of markets. Closing borders, interdiction of fundamental human rights such as the freedom of movement, closure or suspension of a large array of businesses, has overlapped the 1 year grounding of the Boeing 737 MAX which affected over 30% of the worldwide airlines. The entire world will be going through an economic recession and a lot of airlines will fail.
However, just like the karma concept, history repeats until we learn the right lessons. The airlines that were mainly concerned with shareholder’s interest and growing equity value will come out of this crisis damaged the most.
The airlines which learned from past crises to actively dedicate their mission to improve the lives of their employees and their customers will go through this specific crisis as through any previous major one (be it 9/11 or the 2008 economy crash). They will have an unique opportunity to transform disaster into success. It is time for the valuable airline managers to shine and time for the others to fail the test.
Now more than ever, the mixed team of owners-managers-unions-employees will have to run as efficiently as possible.
As an aviation expert, do you see any mistakes airlines are making at the moment that will likely become an obstacle for them to re-emerge from the crisis in the future?
Some airlines are taking a “wait-and-see” position, which is detrimental at this stage. This forced grounding time must be used smartly, first to ensure survivability through the crisis, and second, to reframe the airline’s mission, operations, fleet, sales approach and customer’s dedication to enable it to come out of the crisis as a leader in its (perhaps, new) segment of the market.
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