Changing Aviation dynamics due to Covid19

Game Changer

The year 2020, has been a game changing year for many businesses and countries who had high goals for this year but due to the pandemic have shifted their goals from expanding their businesses to only self-sustaining themselves. While existing companies are more focused on sustaining their operations, the present situation has given rise to new business opportunities as well. Therefore, the year 2020 has changed the entire global economy and operations as we know it.

When we talk about an entire global change, where some businesses such as the pharmaceutical industry or the health sector has seen a boom there are others sector which have been badly impacted where the highest damage has been faced by the aviation sector as international travel has seen a major slump.  The airline industry, over the years, has seen an increase in the market for air travel since tourism was also on the rise. Different airlines intended on expanding their operations to different destinations this year while new airlines were joining the industry in order to meet increasing demand.

Changing Market Dynamics

However, along with a disrupted global economy, the entire market dynamics have also changed.

Recently, almost all of the countries had announced travel restrictions for their people and since 93% of the world’s population resides in countries where the government has imposed a travel ban, this led to declining market growth rate as well as declining profits for airlines. According to the world economic forum, International travel could further by impacted upto 25% this year. Many airlines are on the verge of filing bankruptcy due to the present situation including Thai Airways. Thai Airways is a part of a global aviation alliance, namely Star Alliance.

Turkish Airlines 'Most Valuable Brand of Turkey 2019'

Talking about Star Alliance, Turkish Airlines is also a leading airline of the global alliance which has also changed its direction in respect to its objectives for this year. At the start of this year, Turkish Airlines was flying to 319 destinations with an aim to expand their operations further as they ordered more aircrafts with the newest technology in order to enhance their customer experience. In the previous years, they had also claimed many accolades including being named the “Most Valuable Brand of Turkey” and that too consecutively for the last two years. Moreover, as they shifted their hub to the new Istanbul Airport, they also released a new brand identity which further defined the history and success that the brand has achieved in the past many years. Therefore, Turkish Airlines was on the peak of its business with increasing flights and increasing customer base. Turkish Airlines also has many subsidiaries and joint ventures under its umbrella, which further strengthened the position of the brand in the airline industry. These subsidiaries include Turkish Cargo, Turkish Airlines Support Services and other Maintenance and Repair groups.

Surviving the Pandemic

However, as the first case of Corona Virus was diagnosed in March in Turkey, the government imposed travel restrictions which became a major threat for the Airlines. Despite the growing concern over passenger services, in order to sustain their operations, they turned their passenger aircrafts into Cargo aircrafts. Therefore, despite odds Turkish Airlines is sustaining itself through its subsidiaries. In a mid Covid world, there are many uncertainties to the Airline Industry, as there is no idea about the removal of restrictions over international travel or when the consumers would actually be mentally ready to travel but in a Post Covid world we can assume either a pessimistic outlook or an optimistic outlook.

The Post Pandemic World

Talking about the pessimistic outlook, the Airlines industry would have to incur extra costs related to safety and hygiene with increasing demand for health-related SOP’s by the consumers. Moreover, disinfecting airplanes after every use would be an extensive procedure while also incurring its cost. Many countries might also not remove travel restrictions from their country due to the fear of a second wave of Corona Virus. Further adding that due to the pandemic, many people have lost their jobs and with increasing unemployment, people’s purchasing power has declined therefore, many people might not opt for travelling through air in the future because its costly. Moreover, if they do opt for travelling by air they would make sure that it would only be for necessity. Many consumers might also rely on reviews whether the brand actually stands for what it speaks about, only then a consumer would actually be willing to try out or experience the brand's services.

The optimistic outlook on the other hand gives a more friendly picture of the future airline industry. National airlines such as Turkish Airlines would survive the pandemic because they partly come under the government therefore, being backed by the government gives them an advantage. Moreover, businesses would still require travelling in certain situations and certain groups of people would still want to travel despite the scare that the pandemic has spread among the people. Turkish Airlines can also make use of schemes that the government comes up with such as Health tourism certificates. Meanwhile the passenger services are limited they can increase their cargo operations as even if the passenger services are down there are certain products such as vegetables and fruits which are likely needed to be exported through airlines as they are perishable items. Therefore, they can earn through their cargo operations. Since international travel would be limited, domestic airlines can increase their flight frequency.

Hope & Survival

Therefore, for Turkish Airlines being the national carrier of Turkey, the future holds a promising picture. It has already announced to open domestic operations from the 28th of May while also opening their services to people for ‘Health Tourism’ which the government has announced that would enable people from other countries to come to Turkey for medical assistance. So it seems like even though there is an uncertainty regarding when the pandemic would end, there is also hope for the global economy that it would survive.