How Covid-19 will change air travel as we know it

In the heart of Australian outback lies Alice Springs. The town – colloquially known as Alice – is the site of indigenous human presence dating back nearly 30,000 years. More recently, however, a new (and admittedly very different) type of settler has descended upon Alice. Since April, four Airbus A380s have made their way to the small town. The 500-plus-tonne behemoths belong to Singapore Airlines which, like many other carriers, has grounded almost its entire fleet.

The reason is Covid-19. The spread of the novel coronavirus has caused passenger demand to collapse, forcing airlines to park, rather than fly, their planes. Alice offers conditions ideal to do just that. The local airport has a runway long enough to land commercial airplanes and the climate is dry, which means aircraft parts corrode far slower than in the sweltering heat and humidity of South East Asia.

Slumps in travel demand aren’t new. Following the terrorist attacks of 11 September 2001, passenger enthusiasm towards flying also waned amid security fears. This forced airlines – then, like now – to cancel flights and puts planes into storage. The industry did recover. Passenger numbers for 2002 were 1.63 billion, only slightly lower than the 1.66 billion who flew in 2001. But passenger numbers don’t tell the whole story.

The 9/11 attacks also forced airlines to trim costs through furloughs, layoffs, and most notably, consolidation. Prior to the attacks, the US airline market – the world’s most lucrative – was largely controlled by eight carriers. Today, its four. Following the attacks, airlines also became more cautious and shelved plans for aggressive expansion. This led to fewer flights overall and for passengers, less space as planes got fuller.

Whether Covid-19 has a similar impact on the industry and how passengers fare in the aftermath will depend on a few things.

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The collapse in air travel demand has been driven largely by public policy. As Covid-19 spread, governments worldwide chose – in the interests of preserving public health – to ban entry to non-residents. Some countries like India, Malaysia and South Africa stopped issuing visitor visas. Others like the Australia, New Zealand and the United States suspended visa-free travel reciprocity. The move not only ended the plans of millions of travellers but also forced airlines to stop serving once-lucrative markets. Flying empty planes around makes little fiscal sense. Consequently, getting planes back in the air will require an easing of government entry restrictions.