This report analyzes the impact of COVID-19 pandemic on the aviation industry, including operational and financial aspects, and discusses the future of the industry.
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Impact of COVID-19 pandemic on aviation industry
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TABLE OF CONTENTS INTRODUCTION...........................................................................................................................3 MAIN BODY...................................................................................................................................3 Operational-.................................................................................................................................3 Financial-.....................................................................................................................................4 Future of aviation industry-.........................................................................................................4 CONCLUSION................................................................................................................................5 REFERENCE...................................................................................................................................6
INTRODUCTION The sudden spread of COVID-19 has affected tourism industry and mostly the aviation industry which tend to provide travelling options to the customers. Evaluation of significance of COVID- 19 pandemic on aviation industry is done in this report with the analysis on the significance on finance, operations and future working of the aviation industry. MAIN BODY Operational- The aviation industry have to implement several changes in its operational working through which which it make sure that the spread of COVID-19 is minimized and because of which have implementedseveralimprovisations.Followingaredifferentimprovisationswhichare influenced due to the spread to COVID-19. In flight reduce occupancy- The aviation industry have to implement several improvisations in its operations and one of the prime factor for this improvisation is the establishment of changed sitting arrangement, providing customers new sitting arrangement with social distancing (Nicola and et.al, 2020). Reduced maintenance of aircraft- Since during lockdown the aircraft's were not in the state of operation and because of which were not provided required level of scheduled maintenance for long time due to which after the time segment of lockdown the aircraft have to go through full inspection which is a time consuming process and also very expensive. Sanitization and cleanliness- Organizations have to pay high level of attention on cleanliness and sanitization because of the COVID-19 pandemic through which the staff have to be provided additional training accordingly (Dube, Nhamo and Chikodzi, 2021). Contact less interaction- The industry also have to ensure thatthe time segment to which customers are making engagement with the organization is contact less and due to which have to implement several technological advancement in the working. Improved inter-relationship between operational areas- in order to ensure proper maintenance of customer's health and other health related aspects aviation industry have to improve the inter departmental working with different branches so that high work Reduced staff- Since the industry was restricted for continuing its operations for several months due to corona pandemic because of which was not being able to provide salary to its employees and therefore have to take strict steps like reducing staffs for ensuring its sustanibility.
Financial- The spread of COVID-19 has affected travelling all across the globe and because of which the aviation industry was being stopped from operations and is not being able to achieve required sales for its services. Following are the areas at which the COVID-19 has affected the aviation industry. Unnecessary expenditures-Companies tend to implement several cost reduction efforts for ensuring its sustanibility, which contains steps like reducing staffs, minimizes the expenditures made unnecessary lighting and many more steps are being taken through which returns can be increased (Zhang, Hu and Ji, 2020). Warehouse charges makes a significant contribution on increasing expenditures because the company has to ensure that aircraft is having a proper shade and because of which has to pay for the land consumption rents and other associated factors. Government penalties- Organizations operating in the aviation industry have to ensure following of government developed rules and regulations because of COVID-19 and if the company is not being able to improvise its working according to the legal legislations then it has to face financial penalties. This will make significant impact upon company's cash flow within the market and resulting a negative impact upon its market share and reduced shares pricing. Flight on low occupancy- The aviation industry is not able to regain its strong economic growth because the company has to reduce the level of seat occupancy to half so that social distancing can be establishes within the flight because of which the revenue collection is also reduced (Ozili, and Arun, 2020). Additional charges on aircraft maintenance- During the process of lockdown due toCOVID-19 pandemic aircraft were not in operations, however before taking them to operation company has to take them for maintenance to ensure flight security which has increased expenditures. Unable to repay loan taken for development- Aviation industry often have to take loans so that it is able to improve the customers experience and for which has to take loans and due to this suddenly raised COVID-19 companies are being able to repay the taken loans which has affected their goal achievement capabilities. Future of aviation industry- The aviation industry often tend to analyse its present market conditions and implement improvised working changes accordingly so that it is able to achieve a better performance. Due
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to this factor the aviation industry is highly influenced to make improvements in its working so that if pandemics like COVID-19 are repeated then minimum negative impact upon market growth and market share is being established. Improvement in medial facilities-The COVID-19 has enforced the aviation industry to improve its medical facilities which are provided to the customers so that in worst case scenarios the specific customer is being treated separately. However this will also increase expenditures and will have huge amount of cash requirement. Opportunities-The industry can influence its customers to utilize the private organizational aircraft's apart from using commercial aircraft's so they can achieve high level of security from the COVID-19. Through this company can also establish premium pricing so that high profit margin can be achieved (Forster and et.al, 2020). Economictrade- Apartforcommercialtradingtheairlinescanalso beutilizedforfast transportation of goods between places, because the cost consumption in travelling goods is very low as compared to commercial flights because of the reduced staffs and because of which amount of cash requirements is also low with high returns. Identification of cost reduction ways- The industry was also tend to ensure that it is able to reduce the expenditures established in the efficient travelling between places and because of which the COVID-19 pandemic has provided an opportunity to the company for implementing several cost cutting measure by which level of investment can be reduced but also provide high returns. CONCLUSION From the evaluation in this report it can be analysed that COVID-19 has affected organizational working in different factors and because of which companies operating in the aviation industry are forced to analyse and implement changes in their working so that it can ensure that it is able to achieve its desired target.
REFERENCE Books & Journals Dube, K., Nhamo, G. and Chikodzi, D., 2021. COVID-19 pandemic and prospects for recovery of the global aviation industry.Journal of Air Transport Management. p.102022. Forster, P.M. and et.al, 2020. Current and future global climate impacts resulting from COVID- 19.Nature Climate Change.10(10). pp.913-919. Nicola, M. and et.al, 2020. The socio-economic implications of the coronavirus and COVID-19 pandemic: a review.International journal of surgery. Ozili,P.K.andArun,T.,2020.SpilloverofCOVID-19:impactontheGlobal Economy.Available at SSRN 3562570. Zhang, D., Hu, M. and Ji, Q., 2020. Financial markets under the global pandemic of COVID- 19.Finance Research Letters.36. p.101528. Online Eckenrode, J.,Navigating financial services services sector performance post COVID-19, 2021 [online]. Available through: <https://www2.deloitte.com/us/en/insights/economy/covid- 19/covid-19-financial-services-sector-challenges.html>