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The End of Airlines?

Many of my social media feeds (LinkedIn included) have carried optimistic appraisals of the Covid-19 crisis as it pertains to the aviation industry. Tales of finally completed DIY tasks, videos of aircrew enjoying being out of uniform in the ‘don’t rush challenge’, photo collages of airline staff holding up signs saying ‘we’ll be flying you again soon’; these all convey the positive message that this is a temporary hiatus and that all will be as it was - and in relatively short order. And I am all for the power of positive thinking; a relentless and irrational focus on how bad things are cannot be helpful. But there is a difference between a ‘growth mindset’ and – to quote Blackadder’s General Melchett: ‘a total pig-headed unwillingness to look facts in the face’. Having said this, I must allow that I have spent much of the last few years of my career (not to mention spare time) trying to convince others that one’s emotional state colours one’s perception of reality; in that spirit, I offer the following in self-disclosure: in addition to the mass grounding of the world’s aircraft and the threat of recession, I lost my father to cancer at the end of January, I lost my job at the beginning of March and (likely as a result) lost my medical three weeks later. None of this, I will freely admit, is apt to give one a sunny disposition and sense of confidence about the future. However – and this is the salient point – nor does it make me wrong.

To begin with, none of us should be in any doubt as to the depth of the crisis afflicting aviation in general and passenger airlines in particular. Any economic slow-down is bad for airlines; business travellers cut back on expenditure, would-be holidaymakers stay home, and (perhaps most significantly) investors pull their money out. Stockbrokers and traders will tell you that, at the first whiff of trouble, airline shares are the first to get sold. The depth and length of any recession can only ever be guessed at – after all, if everyone behaves as if there isn’t a recession, there won’t be one. However, it seems likely that businesses and markets will – to put it mildly – be cautious for the foreseeable future.

All of which is in addition to the specific impact on airlines which (if they make money at all) do not make money with their aircraft on the ground. The 48-hour grounding following the atrocities of ‘9/11’ in 2001 and the five days during the eruption of at the six weeks or more that the vast majority of the world’s airliners have been parked up. An Eyjafjallajökull in 2010 pale into insignificance unforeseen and unavoidable shutdown of that magnitude and duration would have huge consequences for any business. IATA is forecasting that we will not see the demand for air travel return to the levels it was at earlier this year until 2023 at the earliest. But I would submit that, rather than being a singular economic hammer-blow, Covid-19 has exposed a harsh reality for airlines.


In the last three years, Monarch, Thomas Cook and Flybe have gone to the wall; TUI has its flight crew on half pay; British Airways and Virgin Atlantic have announced thousands of job losses; and this is all just in the UK – the pattern has been and (most likely) will be repeated throughout the western world if not across the planet. This may just be a market ‘correction’ (a delightful term with the same overtones as ‘collateral’ in military parlance), but I would contend that it is actually the realisation that, for most consumers, air travel is non-essential. Now, granted, much of the world economy is built on selling non-essential items to lots and lots of people, but compared to, say, Coca-cola or iPhones, air travel is a large, noisy, polluting, potentially dangerous, rather inconvenient and very expensive non-essential. We are seeing the results of a thirty-year experiment and it is now time to accept its null hypothesis: aviation is not sustainable as a ‘mass transit’ system; it is not truly public transport. Which means airlines, as we know them, are finished.


Airlines will have to cut costs, even more than before (impossible though that might seem).Least we forget, much of the recent increase in airline business has been enabled by the willingness of its pilots to fund their own initial training. Asking prospective pilots to find €130,000 to spend for the privilege of earning €20,000 a year in the right-hand seat of an airliner was a tough sell before; would any sensible person be willing to spend those sums to end up driving a supermarket van? Airlines – not students, not flight schools and not governments - will need to stump up the cash. Meanwhile, capital, regulatory, fuel and taxation charges are only going to increase; and, even if IATA’s prediction is not somewhat optimistic, demand is, in any event, couched in terms of revenue passenger kilometres (RPKs). In other words, I can meet the ‘demand’ by taking 200 passengers 1,000 kilomtres for $10 each – but I could equally just take 20 passengers 1,000 kilomteres if they were willing to spend $100 each; in which case, why bother trying to fill a two-hundred-seat aircraft, especially with ‘non-premium’ traffic? (And, as an aside, I no longer have to attract premium passengers by spending more and more money on more and more lavish service – they can go in the normal seats.) It is not that the desire of the masses for cheap air travel will disappear, but desire and commercial demand are not the same thing; the latter is something it makes commercial sense to supply- the former is wish-thinking.


This does not mean (and I have sought to be careful in my use of terms) the end of aviation; air freight has demonstrated its huge importance; remote and isolated communities will need to be served, at least for supply and medevac purposes (if not for casual travel); and corporate jets will likely continue to operate, because wealthy, powerful people have a tendency to stay wealthy and powerful. But airlines? Airlines will revert to what they once were: the preserve of those with significant financial means. The ‘jet-set’ (as it was once called) will go back to travelling by air for the occasional meeting or expensive foreign trip, and others will work hard and save diligently for the annual package holiday, flights included. But other air travel will no longer be affordable: why have a stag-do in Prague when it’s perfectly possible to go for a pub-crawl in your local town? Why fly to visit family when one could, if we’re honest, drive? Why would a business owner convene a meeting if the same end could be achieved at a fraction of the cost with a decent broadband connection and a video-conferencing app (the technology may not be perfect, but think what could be achieved for the cost of, say, Heathrow’s third runway). We want to be able to hop on a flight as the fancy takes us, and not be concerned with the cost; but no-one is obliged to provide that if it is unviable. We have allowed ourselves to believe that we can have the cake of fast, frequent air travel and eat it cheaply too – the current crisis has revealed this to be untrue.


I suspect that there are those with more experience, better information, and certainly better commercial nous than me who will disagree. And I hope that they are right. I sincerely hope that the end of lockdown and other travel restrictions will see a rush of returning airline passengers, desperate to fly away again after weeks of imprisonment. I hope that, through education and appropriate, efficient measures at airports and on aircraft, the public can be convinced that air travel is as safe as ever it was. I hope that airlines do, after all, find a sustainable way to cut fares and meet the public demand; that investors see this as an opportunity; that aircrew do, in fact, get us all flying again. I hope, after all I have predicted about the airline industry, that I am wrong. But I greatly fear that I’m not.



Author: Owen Sims - Senior Training Captain

Owen Sims obtained his commercial flying license at the Cabair College of Air Training in the UK, graduating top of his class in ground school and flight school.

Having suffered an episode of severe depression some years ago, Owen developed an interest in psychology and psychotherapy; in particular, now these impacted on his role as an instructor.

He spoke at the Asia Pacific Airline Training Symposium in 2016 on how the principles of cognitive behavioural therapy can be applied to flight training,; at the European Airline Training Symposium in 2017 on the application of mindfulness and in 2018 on person-centred psychotherapy; has addressed the Human Factors Roundtable in Memphis, Tennessee; and will be speaking at the World Airline training Summit in America later this year. He has a bachelors' degree in philosophy and is working towards another in psychology.


 

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