Events that changed the aviation industry: How does COVID-19 compare?

Events that changed the aviation industry: How does COVID-19 compare?

"This is SARS, 9/11 and the Iceland ash cloud all rolled into one." The global travel industry has been dealt a blow by the ongoing impact of the coronavirus pandemic, but few sectors have been affected as dramatically as airlines. Why?
Airlines are a fixed cost industry and now they are under fixed cost pressures which means they are burning through cash everyday while aircraft remain grounded. 

That being said, our industry is a resilient one, and we’re confident of its survival as the world starts to recover from the impact of Covid-19. We look at some of the biggest challenges aviation has faced over the past decades, how these have shaped the industry for the better and how we will emerge from the crisis, a changed but adaptable industry.  

Oil crises: 1970s & 1990s

1970's Oil Crises:  The Yom Kippur War and Iranian Revolution
The oil price shocks of the 1970s were caused Middle-Eastern conflicts. The 1973 Arab-Israeli War (Yom Kippur War) saw oil supplies to North America and the UK among other states supporting Israel completely cut off for months. This led to a sustained gas shortage in the west and massive inflation of oil prices. Then after the Iranian Revolution in 1979, oil prices rocketed once again to around $132 a barrel in today’s currency.

At a time when air travel was still considered a luxury for most, passenger numbers plummeted due to the inflated ticket prices driven up by the cost of fuel. It saw several carriers into bankruptcy and it took around four years for carriers in Europe and North America to return to profitability. 

These challenges however inspired the quest for fuel efficiency. This first came through weight reduction measures such as less paint on aircraft liveries and fewer in flight reading materials. 

Flight management systems for aircraft were developed to calculate the optimal engine power and speed settings based on factors such as weather (wind) and altitude, to reduce fuel consumption.

This also paved the way for the most significant shift in aircraft construction since the 1930s - as transition away from dense materials to lightweight aluminum for airframes. The exploration of the potential of composite materials that were stronger and lighter continued and the first composite commercial jet entered mass production in 2009: the Boeing 787 Dreamliner. 

Impact on the industry: Soaring oil prices led to overpriced tickets & a large drop in passenger numbers.

Changes made: After the crisis, a drive towards fuel efficiency began for airlines & manufacturers. Aircraft fuel burn has reduced 45% in the last 40 years.
Israeli tanks cross the Suez Canal’s western border into Egypt, 1973 (Image courtesy of Wikimedia Commons)
1990-1991 Oil crisis of the Persian Gulf War
The Persian Gulf War in the early 90s caused another oil price shock and combined with the growing fear of terrorism and economic recession, even those who could afford expensive flights canceled their airline tickets en masse. 
Even the elites stayed home, missing international film premieres, fashion shows and opening nights at the theatre. Many global companies banned business trips replacing face-to-face meetings with clunky video conferencing. 

The result was that all major European airlines like British Airways and Air France suffered huge drops in passenger numbers. Traffic at London Heathrow, the world’s busiest airport, decreased by 21 percent.

The impact of the war was tough but relatively brief, traveller fears were alleviated and so global travel bounced back within the year. It also encouraged people to explore new destinations. The conflicts led the Middle East and North Africa to become naturally less popular and so tour operators marketed lesser trodden destinations such as Sri Lanka, the Seychelles and New Zealand. 

Short stays also became more popular - lower incomes and high prices on long-haul flights led to the uprising of short-term tourism trends. 

Impact on the industry: Fear of terrorism and recession had a large impact on passenger numbers for a short period.

Changes made: Travel habits were changed and new destinations became more popular. Airlines opened many new travel routes.

The 9/11 terrorist attacks

Before now, the 9/11 attack on the World Trade Center in New York was considered the most catastrophic event in air travel history. All commercial airlines in North America were halted for three days. The tragedy spread an unprecedented fear of flying. In the aftermath, both American and European airlines lost billions and some declared bankruptcy. British Airways abandoned its Concorde programme - around 40 of its major customers tragically worked in the World Trade Centre and died in the attack. It took around two years for flying to return to pre September 11th levels. 

The world after 9/11 had its own ‘new normal’ - and it was all about security. On board, this involved the addition of reinforced and bullet proof doors and passengers were no longer able to enter the cockpit flight - a treasured moment many of today’s pilots may have recalled as a child. 

Many consider going through airport security a pain, but it was these tough and necessary measures that meant the airline industry was able to persuade people fairly quickly that these made travel safe - and it restored passenger confidence.

Impact on the industry: Large drop in passenger numbers due to loss in confidence and a fear of repeated attacks.

Changes made: Large scale changes in security both on board and in the airport. This eventually led to a return in passenger confidence that took around two years.

The 2003 SARS Outbreak

(Image courtesy of CNN)
The SARS virus (Severe acute respiratory syndrome) traveled to Hong Kong from China with - ironically - an expert in respiratory diseases in 2003.

Just one day after his arrival in Hong Kong, he was transported to a nearby hospital and died within 2 weeks. During his short stay in his hotel, he infected several guests and visitors who flew the new virus globally to other Asian regions, as well as Canada.

In response, the World Health Organisation (WHO) recommended postponing trips to high-risk destinations (mostly in Asia). 

It was the first high profile demonstration of how global travel can facilitate the rapid spread of a virus around the world. Fortunately, the virus was brought under control quickly and was largely contained to Asia.

Asia Pacific airlines were naturally hit hard, but it was fear of the virus which impacted carriers elsewhere in the world like the US. Many European airlines did not have extensive service to the affected region at the time and so they saw a lesser impact. The WHO lifted its strict travel recommendations three months after the virus ‘peak’ and the epidemic came to an end without developing into a widespread quarantine but it took around another nine months for air passenger traffic to return to pre-existing levels - clearly showing that fear outlasted the virus. 

Impact on the industry: Large losses made by Asian airlines, some losses made elsewhere in the world and travel bans to countries with highest rates of SARS.

Changes made: SARS was over fairly quickly and thus hasn’t left noticeable lasting effects on the industry. 

​The 2010 Icelandic Ash Cloud

(Image courtesy of National Geographic)
The eruption of the Icelandic volcano Eyjafjallajökull (we’ll call it the volcano) in April 2010 caused an ash cloud and the greatest airspace closure over Europe since World War II.  Over a week, over 100k flights were canceled and around 300 European airports closed affecting 10 million passengers. After the airspace was reopened, volcanic activity and flight disruption continued for a further month.

The volcano eruption brought two lasting results: better responses to risks in European airspace and, (more surprisingly) an injection of tourism to Iceland. 

The flight restrictions imposed by authorities across Europe during the crisis were not aligned  and neither was the reopening of airspace. To avoid future uncoordinated efforts, the European Aviation Crisis Coordination Cell was established and has been mobilised to respond to events such as the tragic MH17 crash in 2014. 

While natural disasters usually cut tourism demand at least for a while - think the 2004 Tsunami in Thailand - quite the opposite happened on this occasion. Thanks to a powerful social media campaign by the Icelandic tourism board launched in the immediate period following the eruption, the country actually saw tourism grow within a year and visits have been growing ever since, injecting a huge boost to the economy.  

Impact on the industry: Hundreds of thousands of flight cancellations & disruption. Emergence of ‘I hate Iceland’ man as a Youtube sensation.

Changes made: European Aviation Crisis Coordination Cell formed to ensure international cooperation during future disasters. 

Today: Coronavirus

A worker disinfects a Vietnam Airlines plane amid concerns of the spread of the coronavirus at Noi Bai International Airport in Hanoi on March 3. NHAC NGUYEN/AFP VIA GETTY IMAGES
Regional events such as 9/11 and the SARS outbreak differ from the global phenomenon of the coronavirus pandemic, which is uniquely impacting air travel like never before. 

Exponential growth in long-haul flying has made the airline industry more vulnerable to the coronavirus. In addition to health concerns, mass lockdowns,  the potential for a global recession is also stifling travel. Pensions and shares won’t be paying as much for some time, which will reduce disposable income for leisure activities like air travel, even once travel regulations are lifted. 

Clearly recovery will take longer than it has in the past due to the complex and rolling combination of issues and ongoing uncertainty.

However, many of today’s major airlines remain robust, well run businesses. While even the best run businesses can’t burn cash forever, fortunately many governments are recognising that air travel is a vital service for a healthy economy, connecting loved ones and feeding our wellbeing through exploring new destinations and experiences. This has seen state aid, full or partial nationalisation and other support packages for both airlines and staff until more flying can resume - most likely domestically and state by state at first.

In fact, the competitive landscape should states invest in airlines could be one significant change once airlines begin to recover. The Italian government will take full control of Alitalia in June, abandoning initial plans to sell to private investors. 

Low cost carriers may offer bargain fares at first to re-generate demand and mitigate losses rather than chase profits. Prices will likely rise back over time as load factors will remain well below normal levels and people reduce the number of trips they take. 

The big ‘new normal’ post covid-19 will undoubtedly be the addition of enhanced health and safety measures that will be in place both in the airport and on board. Just like with the security response to 9/11, travelling for a while may feel less smooth, but airlines and airports will know they have to be doing all they can not only to protect their staff, but to reassure customers that travel is safe to ensure bookings return. This could include not only social distancing in airports but wearing masks and gloves in flight. 

The nature of business travel might also be permanently transformed as travellers unable to fly today become accustomed to holding meetings via video conferencing rather than in person - more cheaply and efficiently. This could especially affect long haul business flying. 

Impact on the industry: High levels of aircraft grounding, international travel restrictions & a total slump in passenger numbers.

Changes to the industry: Only time will tell what the true change to the airline industry will be after the Coronavirus crisis. Some predict increased passenger distancing required on board, which will no doubt access ticket prices and accessibility of travel. Perhaps face masks will be mandatory when travelling or maybe a vaccine will be found & all will return to ‘normal’. 

There is no doubt this is a huge challenge for the industry. Large airlines were buying aircraft, recruiting pilots and it seems almost everyone has been caught by surprise with this pandemic. 

If you can take anything from this article, we hope it is a positive message. The airline industry has faced many different crises before and each time, consumer confidence and the desire for international travel has always returned.  People love to travel, and the lockdown fatigue we’re all experiencing will see millennial adventure seekers and boomer bucket listers alike packing for holidays as soon as it is safe to do so - not as often at first, but they will be back on board. 

No doubt the airline industry will look different in the new world and there are tough times ahead, but it is a unique, fantastic and necessary industry that will evolve and adapt as it always has before.

Are you an A320/30 Pilot?

We've teamed up with the original and best ECAM trainer in the business, to help you stay current during COVID-19 pandemic. Get an exclusive 25% discount on Use Before Flight subscriptions with our code AILERON25

Please share with your Airbus friends and colleagues.

Use Before Flight offers 250+ abnormal and emergency scenarios. Each scenario includes insight into how to prepare and fly an approach with the selected failure. The app also contains a big range of cross referenced related content, such as videos, blog posts and other documents. Whether you want to practice fires, rapid depressurisation or landing gear troubles, this ECAM trainer has the lot. 

​Aileron has managed to secure an 
exclusive 25% discount on yearly subscriptions for pilots during this Covid - 19 pandemic. To claim the offer simply head to the UBF website and signup. Once you've created an account you can use code AILERON25 to get 25% discount on subscriptions. 



Back to blog