Video of the week – A spotlight on the horizon is our only sight into the world after COVID-19

The first glimpses of light at the end of the tunnel are now appearing, but it remains far to early to predict just what the world will look like for the world’s airlines, airports, and travellers that use them. What was initially thought – or perhaps optimistically hoped – as being just a short-term inconvenience has become a big problem for the industry.

The thought that the aviation and travel industries could recover before the end of the current calendar year was a popular mindset that narrows by the day. Even 2021 could be a little to early with some even suggesting it could be up to five years until we reach those lofty pre COVID-19 levels of travel, pessimistic others even suggest those highs may never be reached again.

It is clear that we have reached a decisive fork in the road. The straight uphill path ahead to the growth levels of the aviation and travel industries that many associations had been touting is now blocked and it is going to take a long and winding journey to get back on that path. That will entail a long backtrack too as the industry completes what is a major reset.

As The Blue Swan Daily highlighted last week, the best first step to recovery remains stability and that may be all we can hope for in the short-term. It will be a bumpy ride – literally! – as capacity is tweaked along this unchartered path to meet actual demand. We are already seeing airlines adapting to the new ‘normal’. Alongside the mass cancellations of new routes, we are also seeing some drop routes, adjusting for the long-term.

One example is British Airways which over the past couple of days has withdrawn is London Heathrow – Helsinki inventory through to the end of its current published schedules. It may seem strange for it to drop an important link between European capital cities, especially a hub-to-hub connection linking the operations of two key airline partners. But, that might be just the reason.

Airline marketing relationships – some very complex in nature – had seen many airlines duplicating on routes. London Heathrow – Helsinki is one such example where both it and Finnair operated flights. You could book a ticket without necessarily realising which airline’s metal you were flying. The decision by BA to drop the route may suggest that we may see the reduction of such duplication on routes in the future to meet predicted reduced levels of demand. Finnair, may have been seen as the better placed to serve the route in the future, or BA may have looked upon it as a market that a more streamlined business would not generate sufficient profitability to operate.

It is all speculation right now as little is actually known about the future landscape for air transport. As days, weeks and months pass we will get a better understanding, but until then respected aviation intelligence provider, CAPA – Centre for Aviation is delivering a fortnightly CAPA Masterclass series of webinars to provide some expert insight into how the environment will look.

These will take a geographical look at each of the world’s air transport markets and provide a big picture overview of our industry and where it will be in the next few years so we all can start planning now for life after COVID-19. CAPA says the implications are wide-ranging and highly disruptive. “The industry will be significantly smaller, with fewer players and fewer aircraft,” it believes.

The series commenced last week with a general look at aviation and travel looking beyond COVID-19. You can watch a full video recording of the session which brought together CAPA’s chairman emeritus Peter Harbison and industry heavyweight and ex-airline executive Christoph Mueller, here: CAPA Masterclass Series: Aviation and travel looking beyond COVID-19

The key discussions points are highlighted in the below illustration:

More Like this