A Comprehensive Report on the Airline Industry's COVID-19 Impact

This report provides a comprehensive analysis of the airline industry's response to the COVID-19 pandemic. It begins with an introduction to the industry, followed by an examination of the operational impacts, such as flight cancellations and the running of empty planes, as well as the financial im...Read More

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.

 Reduction in Aerospace manufacturers: As the decrease in the demand of the aircraft due
to the impact of COVID-19. The value fell 2% to 22% in the January and May 2020 for
the five year old aircraft and there is big downfall in the amount of lease rates by 4% to
26%. All these factors impacting the operations of the industry and slowdown the
operations.
PART 2
Main financial impacts in the airline industry
Financial factors involve the loss in the monetary value within the industry as there is a
significant impact of COVID-19 and the industry faces huge loss I their revenue and also
increase in their cost as to take the necessary measures in the prevention of COVID-19. In
context of British airlines, several impact in the industry is listed down as follows:
 The cost of health-related measures: Airlines industry have to take the necessary
measures in order to prevent the cause of COVID-19 so they have to invest in the
purchase of disinfections, PPE,temperature check machines or viral test machine which
leads to have the impact on the smooth running of the airlines industry(Wittman and
Belobaba, 2018).
 The shape of the recovery for commercial flights: As the increase in the number of
COVID-19 cases, airlines industry is facing the huge impact as the change in the
travelling behaviour of the consumers leads to reduce the operations of the airlines
industry.
 Decrease in the revenue: When the lock down had been imposed across all the regions,
the airlines industry have face the huge looses due to the travelling restrictions and the
changing demand of the travellers to stay at home instead of travelling. There are making
the wrong impact on thee whole operations of the industry as the government has revised
the guidelines in order to run the flights partially with limited number of passengers
which leads to increase in the cost and decrease in the profits due to 50% occupancy.

PART 3
Possible impact for the future of the post COVID-19 and what are the measures taken by
the industry in order to improve them.
As the pandemic takes places, the operations of the airlines industry had shutdown due to
the several restrictions and the industry is facing the huge looses but with the effect of time and
the government made change in the guidelines in order to resume the airlines, then the industry
follow all the necessary measures in order to resume their flights but as the huge impact of
COVID-19, airlines have to bear huge cost as there is no change in the overall cost on flights but
there is a fall in the customer demands and this impacts the overall operations.
The industry can take cut their cost in their operations so that they can bear all the
expenses and retain with the profits so that they can run their business in an appropriate manner.
They can reduce their cost spend on extra amenities which is being offered by them in order to
meet the expenses and industry can come back on their track with the effect of time and the
increasing demand of the travellers with the decease in the effect of COVID-19.
CONCLUSION
It is concluded from the above report that there is a huge impact of COVID-19 on the
airline industry as it affects the whole operations and the functions of the business. Industry is
facing decrease in the demand due to travelling restrictions imposed by the government. They
are facing the huge downfall in their financial reserve as the low revenue generations and
increase in their expenses.

REFERENCES
Books and Journals
Deepa, M.V. and Jayaraman, K., 2017. Scale measurements for airline service quality to secure
passenger confidence in air travel. Quality Management Journal, 24(3), pp.31-50.
Fernandes, A.A.R., 2017. The mediating effect of strategic orientation and innovations on the
effect of environmental uncertainties on the performance of business in the Indonesian
aviation industry. International Journal of Law and Management.
Nižetić, S., 2020. Impact of coronavirus (COVID‐19) pandemic on air transport mobility,
energy, and environment: A case study. International Journal of Energy
Research, 44(13), pp.10953-10961.
Wittman, M.D. and Belobaba, P.P., 2018. Customized dynamic pricing of airline fare
products. Journal of Revenue and Pricing Management, 17(2), pp.78-90.