Photo May 22,2020: AZHAR MAHFOF/The Star
With the air travel industry hit hard by the Covid-19 pandemic and with higher than average increases in ticket prices, it’s unsurprising that the airline industry is facing its biggest challenge in two decades. Previously, it was the Sept 11,2001, terror attacks in the United States that changed the landscape of air travel and put the tourism industry into a tailspin.
The International Air Transport Association (IATA) in April 2020 stated that its 290 member carriers were heading for a combined historic net loss of more than US$84bil (RM358bil) in 2020 as a consequence of the impact of the coronavirus pandemic and the concomitant movement restrictions and lockdowns. As for Malaysia, the air passenger industry could see a 39% fall in demand, involving an estimated 25.49 million passengers. IATA said the country’s airline industry faces an estimated RM14.4bil loss in revenue, affecting some 169,700 jobs. Malaysia Airports reported a staggering 97.8% contraction in passenger traffic movements in May of this year compared with the same period last year. Internationally, the decline was 99.3% whereas the domestic sector shrank by 96.4%.
Basically, there are two scenarios here. The first is the pessimistic view which posits the recovery of the airline industry as uncertain and not guaranteed. The data highlighted above would seem to preclude a quick turnaround and, therefore, recovery will take a long time to set in. The second is the optimistic view whereby the future of the airline industry is tied to the duration of pandemic, signalling a new dawn for the sector with SOPs such as social distancing that could be relaxed or even abandoned altogether once a vaccine or drug is ready for use.
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