Written by Natasha
A lot of information is floating around about the new COVID-19 Coronavirus. How does the Coronavirus affect the airline industry and what does this mean for the airline industry? Let’s investigate the airline industry Coronavirus impact.
The new COVID-19 Coronavirus is taking the world by storm and breaking down everyday life as we know it and threatens a global economic recession. According to the World Health Organization, the virus is now categorized as a global pandemic and poses a greater global threat than terrorism. What are the real implications and consequences for the airline industry?
Regardless of your personal outlook and speculations on the COVID-19 Coronavirus outbreak, the impact it’s causing is undeniable and evident beyond doubt.
Cancelled flights, empty planes and quiet airports; the airline industry remains one of the hardest-hit industries as a lot of the measures being implemented to contain the disease are far from airline-friendly.
The airline industry Coronavirus impact will continue to grow and airlines can expect to be faced with a substantial reduction in service for months to come due to these changes. And on top of that, economic recession threats can pro-long the negative impact on the airline industry.
It has been almost 20 years since airlines faced such an existential threat. After the terrorist attacks of Sept. 11, 2001, global air travel plummeted, and it took years for airlines to fully recover from the airline recession.
The disease began in the city of Wuhan, China with people falling ill to the mystery virus in late 2019. Despite efforts to contain it, the virus managed to progress and make its way into the rest of the world via air travel and has now affected 120 countries and counting. The number of global cases continued to grow each day with reports of infection rates doubling overnight in some countries. The World Health Organization reports that the number of global COVID-19 Coronavirus cases is currently nearing 190,000 with a death toll of approximately 7,500 cases.
The spread of the COVID-19 Coronavirus outbreak has got people worldwide concerned and asking how bad this is, when there will be a cure and how they can protect themselves.
The last thing on people’s minds are travel plans especially since foreign travel and air travel increase their risk of being infected via exposure.
And the question still remains… How many untested people are affected?
As there is no medication or vaccination option available for the treatment of the new novel virus, this leaves containment and mitigation the only methods available to fight the disease until vaccinations are made available.
Due to the nature of the virus being human-to-human transmission, air travel has been identified as one of the leading methods of the disease spreading. Given this, authorities worldwide have taken steps to contain and minimize the outbreak by imposing strict laws and announcing precaution against air travel.
Several countries have imposed heavy travel bans while others continue to encourage people to stay at home and avoid foreign travel. Conferences, meetings, concerts and heavy social gatherings are also being cancelled worldwide.
The number of countries enacting quarantine and travel restriction measures continue to grow by the day causing the airline industry Coronavirus impact to increase and threaten an airline recession;
Additionally, Some of the world’s largest events have been cancelled or postponed due to the COVID-19 Coronavirus outbreak;
These measures have clearly made air travel outright impossible and less desirable. Restrictions on flying and fear of flying; a truly deadly combo that can collapse the airline industry with a monumental airline recession.
Planes devoid of passengers, empty airports and tarmac workers wearing full-body protective suits has become the new norm.
Several airlines around the world are feeling the heat and are being forced to ground flights due to increasingly low demands in an attempt to avert an airline recession;
There is currently no cure in terms of vaccination or medication to treat the disease. The medical industry scrambles to develop treatment but reports are that there will be no vaccine any time soon.
Treatment with vaccination not only faces the threat of development but also production. Mass level of production involved in producing vaccination for 7 billion people is no easy fleet and requires considerable time on its own. The same applies for medication that needs to be produced, approved and safety-tested before being available to the general public.
Experts predict the development of ready-to-use Coronavirus vaccination can take up to 1 years’ time at least.
Throughout this time, airlines can expect flight demand to remain low due to public fear and for travel restrictions to keep on fueling the severity of an impending airline recession.
But is that all? What can airlines expect after the COVID-19 Coronavirus outbreak has seized?
Efforts to contain the COVID-19 Coronavirus have continued to severely limit economic activity affecting both supply and demand. Economy markets are in panic and this might very well be just the start. And some experts predict the virus outbreak will trigger a global economic recession.
In countries where the virus is the strongest, such as China and Italy, business activity has been forced to a complete halt, with entire cities shut down under quarantine. Extreme measures being implemented to control the disease has brought countries like Japan, Germany and Italy very close to recession.
Breaks in supply chains, factory closings and workers on leave have disrupted supplies. All businesses worldwide reliant on China in terms of selling or supply chain are significantly impacted. Quarantines, travel restrictions, and fears regarding contagion have altered consumer spending habits affecting demand, growth, employment and incomes. The crippling of retail and consumer businesses could quickly escalate into bankruptcies, the downgrading of corporate debt and impairment of the balance sheets of banks. The global stock market has had a turbulent week with some of the worst loses seen in over 30 years.
The US’ biggest bank JP Morgan officially forecasts that the COVID-19 Coronavirus pandemic will sink the US and European economies into a deep recession as soon as this summer.
The magnitude of the strides in the market resulting from the spread of the COVID-19 Coronavirus is no less than shocking.
This level of financial impact or an economic recession can have severe implications for the airline industry by prolonging damage way past the COVID-19 Coronavirus’ shelf life and making recovery even harder.
The consequences of the economical impact can affect airlines sales and revenue and cause an airline recession in two distinctive ways;
At this point, it is hard to predict what the reality will be in 3 or 6 months’ time. However, regardless of the future outcome, the damage has already been done. The airline industry Coronavirus impact is already visible with the threat of an airline recession inching closer each day.
The IATA predicts a 63-billion-dollar revenue loss for airlines. This figure is relevant only if the Coronavirus is retained. If the disease continues to spread, the airline industry can expect to sustain over 110-billion-dollar in revenue loss bringing it to par with the losses experienced during the 2008 financial crisis and airline recession.
These worst-case estimates are no less than chilling but not necessarily set in stone. Although cases will continue to rise in the coming weeks and months, containment and mitigation efforts have a chance of overcoming the outbreak and lead to recovery but not without a painful cost.
The airlines’ ability and strength in executing effective targeted promotions and marketing campaigns to re-capture customers will determine its survival.
In the upcoming months and during the aftermath of the COVID-19 Coronavirus outbreak, airlines must focus on utilizing every effective resource available to their advantage in the fight to recover from the impacts of the novel Coronavirus.
E-commerce allows airlines a direct contact pathway to customers with the ability to gain data insights and personalize selling to individual customers’ needs and behaviours.
An e-commerce centric strategy can be the saving grace airlines need to fight off an airline recession. Unlike other modes; e-commerce carries a number of advantages that will aid with recovery;
It is important to note that consumer behaviour has been profoundly altered by the virus outbreak. We see that evident in most of ourselves in our own lives. Random and generic offers and marketing promotions aren’t going to help now. In fact, market-wide discounts will only cause more harm than good.
Past customer behavior data and marketing strategies are rendered ineffective at the hands of this new scenario.
To grab consumer attention and re-motivate purchasing, airlines need to enact data-driven personalized selling. Personalized promotions and other premium offers will help ease consumers’ price concerns and may end up being the reason they come back with their wallets open.
It all starts with data. You need data to understand the new psycho-graphics of your customer base (who they are and what motivates them) to be able to create proper offers and communication.
Reaching customers in this manner with data-driven tailored and personalized offers and pricing will be crucial for recovery.
What functionalities of an e-commerce system can be effective to execute this scenario?
Track customer behaviour – The ability to identify this changed behaviour is a key stepping stone to win customers back. User tracking needs to be activated for both purchase and especially non-purchase activity. Enabling customer behaviour tracking via e-commerce site/app will provide important insights into the changed customer onsite behaviour which is then used in developing and offering effective personalized targeted promotions. A personalized marketing campaign as such will enable high conversion rates and eliminate revenue leaks from irrelevant and market-wide discounting.
Flexible analytics – Not all countries have been affected equally by the COVID-19 Coronavirus outbreak. Different markets and customers will behave differently at different times depending on the severity of the impact. Flexible big data analytics will enable data slice and dice to get insights into different behaviours in different countries among different types of customers.
Real-time analytics – Identifying customer behaviour and building the perfect offer will not be enough. The ability to capture the customer with reactive real-time analysis and targeting is what will secure customers from changing their mind or opting for competitors. Real-time reactive analytics is what will help secure hesitant buyers and fuel impulse purchases.
Forecasting can be used in many different use cases to gain a competitive advantage and to be better prepared to handle upcoming events-especially in tumultuous and unpredictable times like now.
The COVID-19 pandemic is constantly evolving with new developments and reports emerging by the hour. Airlines can combine first-party data from e-commerce with third–party data on the COVID-19 Coronavirus and social media data using Big Data Science to gain strategic prediction insights out of Data Science.
Through a Dynamic Data Science reporting dashboards, airlines can monitor a country’s COVID-19 Coronavirus infection escalation and recovery progress to identify and predict at which point, at which rate and how interests will shift back into flying in different regions/countries. Knowing these predictive insights enables much more effective and timely marketing campaigns.
Are you looking for ways to get the best out of your data?
Let us help you use your data.
Everything you need to know about NoSQL, a type of database design that offers more… Read More
ZooKeeper is an open-source Apache project that provides a centralized service for providing configuration over… Read More
There are many types of data structures out there that are meant to store data… Read More
An improved architecture and enthusiastic user base are driving uptake of the open-source web tool. Read More
This article will offer you a clear grasp of the drilling process, how to install… Read More
Introduction The term solar energy should be quite common; it represents the direct energy produced… Read More