CAPA LIVE ANALYSIS: A Fundamentally Changed Industry

The air transport industry that emerges from the pandemic will look vastly different, and the implications are wide-ranging and highly disruptive. There will be winners and losers in a more constrained marketplace.

“It is important to have some sort for a reality check,” CAPA-Centre for Aviation chairman emeritus Peter Harbison said in opening remarks during the CAPA Live November event.

Harbison delivered a global overview of the industry and where it will stand in the next few years. Nine months on from the onset of the COVID-19 disaster, he said the industry was looking at a new platform from which it will build over the next decade.

What will the new situation be like? “Most people realize now, unless they're really deluding themselves, that it is going to be a structurally very different industry,” he said.

There appears to have been a change in the consumption of air travel and general consumer behavior. Skyscanner director of strategic partnerships, flights, Gavin Harris said uncertainties surrounding travel restrictions have translated into shorter booking windows and an increase in last-minute travel.

“We're seeing a window of under seven days become the normal,” he noted.

Harris acknowledged that the company has identified “a significant shift” to one-way travel versus return travel, with a spike in the March period as people were trying to get home. Harris added there had also been a “prolonged and more recent shift” to domestic travel in multiple markets, with growth dominated by Asia-Pacific markets.

Foster + Partners architect and senior partner Antoinette Nassopoulos-Erickson said the impact of COVID-19 on airports “has hastened, accelerated trends of change that were already in motion before the pandemic,” including advancing the implementation of biometrics and contactless technologies at airports. She predicted that pre-departure and arrival health screening, which is being implemented in some airports during this pandemic, “may become a permanent process at airports” and eventually an integrated element to the future travel pass.

Informa PLC director, custom intelligence & analytics Duncan Emerton said vaccines were the most scalable and long-term solution for “getting us out of this pandemic.” He noted there is a key focus on the development of rapid diagnostic testing (RDT), with airlines including Virgin Atlantic and Cathay Pacific already offering RDT. Emerton said rapid testing was going to be important for travel and the events industries, and for the return of business travel. However, he acknowledged, “what we'll need to see in order for these to be adopted more broadly is for the price to come down.”

IATA head of consulting Asia Thomas Pellegrin acknowledged that vaccines will ultimately replace the need for testing, but said uncertainties linked to vaccine research, developments, trials, approvals, manufacturing, shipping and inoculating at scale, are such that testing was expected to remain necessary for the foreseeable future.

He explained that in order to lift quarantine requirements, states need to trust that tests are “accurate enough at preventing infected travellers from slipping through what we call the false negatives.

“Tests must also minimize false positives of those uninfected travelers who get stopped,” he said, adding that testing must not become “another undue economic burden during a crisis.”

Looking to 2021, Harbison warned, “it's not going to be just an adjustment. It's a fundamental change. Many airlines have shrunk already and will stay shrunk. There'll be much more financial losses. Airline consolidation is inevitable, including airline departures and restructuring, which is the key word in this, which is a fundamental restructuring, not just a few adjustments to cost.”