Will the aviation industry recover from the pandemic? (Two perspectives)

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 Will the aviation industry recover from the pandemic? (Two perspectives)

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• PERSPECTIVE 1 -

1. Huge hit to revenues in 2020: The IATA has estimated losses for next few months, but Singapore is going for the long shot. The Changi airport's one terminal is fully shut down, and crisis may last 2 yrs. In India, within two years, we may reach 50% of where we were earlier. In that time, many airlines will die.
2. Willingness to travel: Family travel days are all over in India now. Rail travel will be back. Most allied industries (with aviation) will go bust. Aviation now needs professionals to help it, not bureaucrats!
3. Bailout packages abroad: If the govt. wants to help big time, they have to nationalise everything, and that's suicide. UDAN model was not sustainable, and now it's going to crack.
4. New business models: Rebuilding Indian aviation now will mean running flights that are essential. Public makes an airline, and not the freeloading politicians.
5. What about the manufacturers: Fresh orders won't come for five years. So the 350 and 787 categories will be used more. Business travel will diminish, as no one would want to get stuck in some foreign place. So tickets have to be cheap, which cannot be!
6. Summary: Move slowly, revive over time, be prepared for the worst.

• PERSPECTIVE 2 -

1. Huge hit to revenues in 2020: This crisis is totally unexpected. No one in industry knows what to do now. After the 9/11 crisis, industry took a long time to recover. Even after everything is allowed - travel, visa, airlines, flights - people may not want to travel at all for leisure or business. They may be scared of the destination itself. A plane on the ground is costly. Of the 650 total planes in India, 50% are on lease, and rentals are paid constantly. If the fleet grounding lasts beyond 3 months, the revenue loss and losses would climb sharply. Job losses would be immense.
2. Willingness to travel: Social distancing norms will remain imposed even after flights resume. So what fares would airlines charge for only 1/3 carrying capacity? Only the rich will be able to fly now. Indian aviation hasn't really prepared itself for this day, as chasing market shares was the norm.
3. Bailout packages abroad: The govt. of India cannot revive Indian aviation at the cost of other industries. Some aid may be given, but no large scale package. US may do it, but not India. Of the 650 planes, we may now not need even 350.
4. New business models: It was about garnering market shares at the cost of profitability. There never was a low-cost airline in India. Promoters need to move out. ATF must come under the GST regime. If aviation industry is allowed to sort itself out then, maybe they'll find their way. 
5. Summary: It will be very long before the industry becomes normal. Since alternate ways of working are now common, and the world itself will change.

• Summary : Two perspectives on whether the aviation industry will escape the pandemic wrath or not

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