We’ve seen, in a previous article, how the Aerospace & Defense sector has been hit by the global pandemic. However, the damage doesn’t stop there. Commercial airlines have not been spared – though you may already know that if you’ve checked out our piece on the current pilot shortage.
Indeed, Covid-19 has not been kind to the Airline Industry. Let’s take a look at how this crisis has impacted the sector, and what we can expect moving forward. Needless to say, the initial blow was swift and tough. In Italy, the first month of lockdown saw the cancellation of 2 out of every 3 flights. Within the first four months of 2020, the total number of aircrafts taking off and landing went down by 43%, and the number of passengers fell by more than 50%.
This sudden drop can be attributed to the virus, of course, but looking back, a lot of different factors come into play:
- Money – the economic recession that followed the Covid outbreak hit a lot of people hard. Suddenly, travel became an unnecessary luxury.
- Fear – we all faced a deadly and highly contagious virus. No one wanted to risk their health by getting on a crowded plane.
- Policy – a lot of companies had to cut down on spending. This meant less business trips.
- Technology – the surge in digital solutions (videoconferences, virtual reality, etc.) made a lot of things easier, and travel became even less necessary.
While all of this was happening, airlines had to figure out a way to stay afloat and airborne. An immediate solution was to save money by keeping older planes in the air. Of course, this impacted negatively on OEMs (Original Equipment Manufacturer) everywhere, as they saw less orders coming in. Another easy solution was to get spare parts from grounded planes. This, naturally, affected MRO services (Maintenance/Repair/Overhaul).
Needless to say, the situation is grim. A silver lining, though, is the fact that within the Airline Industry, medical and rescue devices have, naturally, kept going strong. Because of this, a lot of companies have redirected their efforts towards that sector. This productive shift can only do good in a time like this.
Here we are, a year later, still suffering from the effects of the global pandemic. The Airline Industry is fighting to stay strong, and it has a lot of hard work ahead. We are confident that they will get through this!
For more information on the effects that COVID has had on the Italian A&D sector, check out this brilliant report by Delloitte that we here at LoVar used to write this post. (The report is in Italian).