CoVID-19 pandemic has hit every aspect of our lives. Every industry is facing unprecedented challenges. But the airline industry is probably facing its worst crisis ever. Empty airports, grounded aircrafts, and barren skies; it is worse than a nightmare. CoVID-19 has not just scarred the airline industry but stabbed, and healing is going to take long.

Before analyzing different stakeholders, let us have a look at the current situation. In the United States, the second-largest aviation market, domestic airlines are reported a passenger-load of 35% in May, a considerable increase from 15% in March. However, it is a lot lesser than the usual average of 80%. The International Air Transport Association reported an average of 250,000 global passengers per day in May 2020, compared to 2 million a day in May 2019- Almost a 90% decrease. Forecasts show that air traffic will not be regular until 2024. With international border restrictions and quarantine rules in place, travel does not seem to be a good idea. However, domestic markets are projected to grow much faster than international, due to obvious reasons.

The aviation industry has been walloped across the supply chain: the suppliers, the manufacturers, and the airlines. For simplification, imagine a small supply chain. Rolls-Royce is one of the world-leading aircraft engine manufacturers. This business accounts for over 60% of Rolls-Royce’s revenue, not luxury cars. Boeing and Airbus hold a near duopoly over the aircraft manufacturing industry and manufacture commercial aeroplanes for all airlines around the world. This is just a simplification, a drop in the ocean. Hundreds of suppliers are dependent on the aviation industry, and airlines work on meagre profit margins and low cash reserves. In such an environment, we cannot even imagine what the future holds.

The airline supply chain cycle- See how deep the stab is!

What is happening to airlines around the world?

Airlines have been grounded for over two months now, and there are no signs of rapid recovery. They cannot keep burning their cash reserves. Therefore, airlines around the world have been resorting to three significant measures: 1. Reduction of Staff, 2. Retirement of old/less cost-efficient aircraft models and 3. Holding complete/partial salaries of employees

The Americas-

American Airlines retires most of its B757 and B767 fleet. Delta announces retirement of the whole fleet of B777, which they just refurbished. Air Canada is retiring close to 80 aircrafts, most of them B767s and A319s. LATAM Airlines, one of the largest in Latin America, is reducing its fleet by leasing their modern A350s and B787 aircrafts. LATAM Chile has even filed for bankruptcy. Moreover, the three biggest US carriers, American, Delta and United are planning to cut as many as 100,000 jobs.

Europe-

The Lufthansa Group, including airlines like Brussels, Swiss and Euro wings is looking towards a significant workforce shrinkage. Air France-Dutch KLM is reporting a revenue loss of 1.8 billion euros in three months and is bracing for a massive job cut. Air France and Lufthansa have already cut its A380 fleet by 50%. Lufthansa is retiring its B747 fleet. Norwegian and Finnair have temporarily laid off 90% of their staff. British Airways is set to cut 12000 jobs. Virgin Atlantic fleet is shrinking- B747s and A330s are being retired

The Middle East-

The Middle East is the home of world-leading luxury airlines, Emirates, Etihad, and Qatar. A380 is the backbone of Emirates and Etihad fleet, and now they are rapidly being retired for cost-cutting measures. Emirates is laying off around 30000 staff, and Etihad is planning to reduce its workforce by 50%. Qatar is looking to axe 20% of its workforce.

India-

One of the fastest-growing markets, India, is in troubled waters too. Major airlines like Indigo, Vistara, SpiceJet and Air India are under tremendous pressure. Vistara has mandated unpaid leaves for 20% of its employees. Go Air and Indigo have announced pay cuts for its employees across the organization. Already debt-stricken Air India has withheld the salaries of its employees for over three months and announced job cuts. The Indian airlines’ fleet is relatively new and efficient majorly consisting of A320s and B737s. Therefore, they are not considering retiring aircrafts.

East Asia and Australia-

East Asia is home to major long-haul airlines connecting countries across the pacific. Thai Airlines and Virgin Australia have announced reorganization, which could mean several job cuts. Qantas, the flag carrier of Australia is retiring their coveted B747–400s and some A380s. Qantas’ ambitious project sunrise, the 20-hour flight between Sydney and London using the A350 is put of the hold. Singapore Airlines is in the process of cutting 10000 jobs. Japan Airlines is planning to axe 15000 employees over three years.

What Does the Future Hold?

The aviation industry employs around 10 million people directly, and approximately 25 million across the supply chain, which means the livelihood of about 60 million people is dependent on the airline industry. At least 30% of them are directly going to face the consequences of the havoc of CoVID-19 in the long term. This is just the beginning. With reduced consumer confidence in flying due to virus fears, flyers will opt out of flying. And the aviation industry is not alone, and many sectors are inter-dependent. The tourism industry, which employs over 40 million is at the edge. Reduced fights influence oil demand leading to fluctuant oil prices. Over the last few weeks, we have seen the oil and energy industry in turbulence, and this does not look temporary. 2001 was a turning point for the aviation industry. Still, there was a controllable factor- Increase in security measures ensured return in consumer confidence. In addition to this, pilots and Air Traffic Controllers are supposed to have the best possible mental state. This lockdown has started a domino on mental illness like induced anxiety and depression. Many accounts of pilots have stated concern about various factors like sleeplessness, job security and family problems, among others as their biggest problems.

Will 2020 induce permanent damage to the industry? Only time can tell!

And the innocent victim- the Boeing 747- the queen of the skies!

In aviation, B747 aircraft is the equivalent of band “Queen” in Rock Music. Newer and more efficient B787 and A350s might come, but nothing can replace the reign of the queen. You can distinguish this aircraft from a distance-by its famous hump. It is the longest-running jet ruling the skies since 1968. Boeing manufactured about 1500 of these beasts. Finally, it looks like the dawn is near for the 747.

To see what makes it so famous and likeable, we should see some of its deeds.

Presidential aircrafts across the world

Guess which plane is trusted with chauffeuring the heads of states? Yes, China, India, USA, Japan, and many other countries’ presidential aircraft is a refurbished Boeing 747. And if this was not sufficient, if also carried someone else!

NASA used a customized 747 to piggyback a spacecraft

Aircraft is one of the most sophisticated inventions by humankind. The thought of flying gives me an adrenaline rush, and seeing these beautiful machines grounded, is down heartening. But what else can we do, but hope that the skies will roar again soon, and these beasts will return to where they belong.