Operational and Financial Impacts of COVID-19 on Airlines Industry

Introduction to
Airlines Industry

Table of Contents
INTRODUCTION ..........................................................................................................................3
PART 1............................................................................................................................................3
Main operational impacts in the airlines industry.......................................................................3
PART 2............................................................................................................................................4
Main financial impacts in the airline industry.............................................................................4
PART 3............................................................................................................................................5
Possible impact for the future of the post COVID-19 and what are the measures taken by the
industry in order to improve them...............................................................................................5
CONCLUSION ...............................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Airlines industry is the growing industry as it generate higher revenue and offers the
premium transportation services to their passengers in order to make the memorable and
comfortable experience of their clients. This industry is having the major impact of COVID-19
and they have to shutdown their business operations for a long period and time and rendered
huge looses(Fernandes, 2017). British airlines is the chosen company for this report, it is the
second largest airlines in the United Kingdom and its headquarter is in London, England. This
report will cover the operational, financial impact on the airlines industry and furthermore, it will
explain the possible impact for the future of post COVIS-19 industry and how the industry can
improve these impact on the industry.
PART 1
Main operational impacts in the airlines industry.
Operational impact is defined as the effects on the planned maintenance at the various
component of the business so that they are facing the slow down in their various business
operations and in context to airlines industry, it is the high GDP contributor in the economy by
generating the higher level of revenue but COVID-19 have significant impact on the airlines
industry due to travel restrictions and the decrease in the travellers demand. Various points
which explain the operational impact of COVID-19 on British airlines is describe below:
 Flight cancellations: The government regulation have mandate the refund on the
cancellation of flights and the airlines industry have to give the same but some airlines
offer the vouchers or travel credits that must be sued by the end of this year and some
have extended their voucher to may 2022. Due to COVID-19, it is been recorded that 40-
60% flights movement has been recorded in late march but it increase by 80% by April
across all the regions.
 Running of empty planes: Due to the impact of COVID-19, the planes are running empty
and this is incurring the huge cost and results in decrease in the revenue of the industry as
the travellers are avoiding to travel across the different regions(Nižetić, 2020). This is
main consideration which the company is facing in loss in revenue generation and this
impacts the running of the airlines industry.