Aviation facing the challenge of complying with regulations and keeping the business profitable

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Aviation facing the challenge of complying with regulations and keeping the business profitable
Tue March 03, 2020

Beyond its impact on all tourism segments, COVID-19 has once again put the airlines in check. To maintain operations, the role of public health authorities at the international level and acting with common sense will be vital


Since the emergence of COVID-19 in China, the forecasts that the airlines had announced for this year have quickly been forgotten. The first official announcement about the impact of this disease came from the International Civil Aviation Organization, who made a preliminary forecast. ICAO reports that currently about 70 airlines have canceled all international flights to and from mainland China, and that another 50 airlines restricted related air operations. As a result, the capacity of foreign airlines to transport passengers on direct trips to and from China was reduced by 80% and the capacity of Chinese airlines by 40%. It is worth clarifying that this information may have varied due to the speed with which restrictions are announced.
Before the outbreak, the airlines expected a 9% increase in capacity on international routes to and from China for the first quarter of 2020 compared to 2019.
Preliminary ICAO estimates indicate that, in contrast, in the first quarter of 2020, there has been a general reduction of between 39% and 41% in passenger transport capacity, that is, a reduction of between 16.4 and 19.6 million passengers regarding airline projections. This equates to a potential loss of US $ 4 to 5 billion in gross operating income on airlines worldwide.
These estimates do not include potential impacts due to reductions in international air cargo movements in cargo-only aircraft or in airport activity, air navigation service providers, inland air traffic in China, international air traffic to and from the Administrative Regions Specials from Hong Kong and Macao in China or with the Province of Taiwan.
With regard to the main impacts on tourism in the first quarter of 2020 due to the reduction of travelers from China, ICAO estimates that Japan could lose US $ 1.29 billion in revenue in its tourism industry, followed by Thailand, which would lose 1 150 million US dollars.
The agency also indicated that the impacts of the COVID-19 outbreak are expected to be greater than those of the SARS epidemic in 2003, considering that a higher volume of flights affecting more regions of the world is being canceled. The seasonal passenger load factor is another aggravating factor, as well as the fact that, since 2003, China's international air traffic has doubled and its internal air traffic has increased fivefold.
ICAO stressed that these are preliminary figures and forecasts that have not yet taken into account more comprehensive assessments of the direct and indirect economic impacts of COVID-19 that will eventually be determined.
The International Civil Aviation Organization (ICAO) has transmitted a new communication to its member states, urging them to examine and implement the recommended civil aviation rules and methods applicable in the responses to communicable diseases.
He also reminded national governments that ICAO, the World Health Organization (WHO), the Centers for Disease Control and Prevention (CDC) in the United States, and other international and aviation organizations have issued health notices and traveling on COVID-19, which are available to the public worldwide through the internet.
In its last communication to the States, the United Nations aviation agency urges the States to implement the relevant provisions of Annex 9 - Facilitation of the Chicago Convention, to take steps to formalize their participation in the Collaborative Arrangement for Prevention and ICAO management of public health events in civil aviation (CAPSCA), to effectively establish a national Air Transport Facilitation committee, and to clarify the roles and responsibilities of civil aviation and public health authorities during outbreak episodes, with a view to favoring the continuous, safe and orderly operation of world air transport services.

“We urge ICAO member states to collaborate with each other and coordinate their preparedness and response plans at national and regional levels, in addition to studying the possibility of providing economic or in-kind support to the CAPSCA program, for example, through the Staff affiliation, so that it can improve its effectiveness in these situations, ”said ICAO Secretary General, Dr. Fang Liu. "The increase in financing is of vital importance for the sustainability of this global mechanism of health and travel coordination, which is key when contagious outbreaks arise."
“The COVID-19 outbreak and its repercussions on airport activities around the world highlight the fundamental role of public health authorities at air borders, as well as the need for an effective national policy framework on facilitation of air transport in order to establish clear roles and responsibilities for the various ministries, agencies and organizations that participate in or exercise responsibilities in it, ”added Dr. Liu.
In its communication to the Member States, ICAO also encourages them to strengthen their preparedness plans to manage risks related to communicable disease outbreaks by implementing effective strategies for collaboration and coordination with all interested parties, he points out to the Government attention to the training offered by WHO and the ICAO CAPSCA program, and underlines that ICAO supports WHO's call for international solidarity in response to the COVID-19 outbreak.
IATA (International Civil Aviation Organization) has also been monitoring the situation minute by minute and has asked civil aviation organizations around the world to suspend the rules governing slots (slots of landings and take-offs).
 

“IATA research has shown that traffic has collapsed on key routes in Asia and that this is undulating throughout the global air transport network, even between countries without major outbreaks of COVID-19. There are precedents for the prior suspension of the slot usage rules and we believe that the circumstances again require a suspension to be granted. We call on regulators around the world to help the industry plan for today's emergency and future network recovery, by suspending the rules for using slots temporarily, "said Alexandre de Juniac, Director General and CEO of IATA.
“The world faces a great challenge to prevent the spread of COVID-19 while allowing the world economy to continue functioning. Airlines are at the forefront of that challenge and it is essential that the regulatory community work with us to ensure that airlines can operate in the most sustainable way, both economically and environmentally, to alleviate the worst impacts of the crisis, "he said.
Who has not yet expressed is the Latin American and Caribbean Air Transport Association. But it is ruled out that we have a statement shortly. ALTA will gather experts in aviation safety in the Americas, the Caribbean and Europe at the Pan American Aviation Safety Summit to be held from June 8 to 10 in Sao Paulo, Brazil.

UNWTO and WHO united to collaborate
Both organizations work closely with each other and with other parties to help States ensure that health measures are implemented in a manner that minimizes unnecessary interference with international traffic and trade.
The tourism response must be measured, consistent and proportionate to the threat to public health, and must be based on a local risk assessment, taking into account each link in the tourism value chain - public entities, private companies and tourists - in tune with the guidelines and general recommendations of the WHO.
UNWTO and WHO are prepared to work closely with all communities and countries affected by the current health emergency, to build a better and more resilient future. Imposing travel restrictions beyond that can promote unnecessary interference with international traffic and negatively impact the tourism sector.

WTTC calls not to stop traveling
Gloria Guevara, President and Executive Director of the WTTC and former Minister of Tourism of Mexico, with first-hand experience in containing a major viral incident after dealing with the H1N1 flu virus in Mexico, has asked governments and authorities to Everyone who does not overreact with disproportionate measures in an attempt to control COVID-19.
Guevara said that "Governments and those with authority should not try to drown travel and commerce at this time. Closing borders, imposing general travel bans and applying extreme policies are not the answer to stop the spread of the coronavirus.
He argued that "Past experience shows that taking such extreme measures has been ineffective at best. We urge governments to explore fact-based measures that do not affect the vast majority of people and businesses for which travel is essential. "
The WTTC analysis shows that 33 countries, only 16% of the total worldwide, have reported Covid-19 cases. The vast majority of patients affected by the virus have also fully recovered. COVID-19 has a lower mortality rate than previous viral outbreaks, such as SARS in 2003 and MERS in 2012.
Millions of people continue to travel around the world daily, whether taking flights, cruises, train trips or driving. Each month, according to 2018 figures, an estimated average of 2.3 million people take a cruise with very few incidents.
Guevara Manzo added: "A death is too much for any virus, but now is not the time to panic. We understand that there is a great concern for COVID-19. However, it is important to remember that mortality rates remain very low and the chances of contracting the virus, for the vast majority of people, are very remote if they travel responsibly and have simple hygiene measures. "
It should be noted that the WTTC 2020 World Summit will be held from April 21 to 23 in Cancun, Mexico, with a range of CEOS and senior leaders who speak from the travel and tourism industry.

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