COVID-19 and the Future of Aviation
Whether passenger or pilot, aviation will never be the same
- Commercial aviation will take years to recover from the worst crisis ever to hit the industry.
- The impact of the crisis will reshape airlines, airports, and the experience of flying. Nascent trends are now being accelerated.
- Artificial intelligence will help airlines control costs, help manage the travel experience and make pilot training more efficient.
In late 2019, there emerged a novel type of coronavirus, the origins of which are still somewhat mysterious. Now called SARS-CoV-2, the virus is believed to have originated in animals and transferred to humans via spillover infection, causing the disease now called COVID-19. The first cases were in Wuhan, China, and despite radical efforts to contain the spread, it has now become a global pandemic. As of May 3, 2020, there are over 3 million cases in 187 countries and territories, and over a quarter million people have died.
In an attempt to contain the spread, most countries issued travel restrictions and began enforcing quarantines. Various forms of social distancing were either encouraged or legally required. The net result is that a large fraction of the world’s population is now in some form of lockdown.
For the world’s airlines, this has been devastating. The number of scheduled flights has decreased by as much as 90% in some countries and 80% on average globally. Even finding enough parking space for the two-thirds of the world’s jets that are now grounded is challenging. An economic assessment by IATA forecasts losses to the airline industry of over $250 billion in 2020, relative to the previous year.
At the time of writing, the median airline has less than 2 months left of cash and a few have already gone bankrupt. Without access to further liquidity or government assistance, most airlines will be bankrupt by the end of May of this year.
Why aviation matters
The aviation industry has grown to employ over 10 million people, but supports 65 million jobs worldwide, especially in the travel and hospitality sectors. Many countries depend on tourism as an essential part of their economies. Aviation supports international trade and a global supply chain. Altogether, aviation contributes roughly $1 trillion USD to the global economy.
Besides just passengers, air cargo is a $100 billion industry. We have seen the vital role it plays in the global supply chain as countries scrambled to secure medical and protective equipment during the onset of the pandemic.
Beyond the economic benefits of aviation, it also provides many important social benefits: health and humanitarian aid, delivery of essential services, and educational opportunities to millions who travel far from home to schools and universities.
One way or another, aviation is here to stay. Its economic recovery is primarily a question of time, but governments will have a large role in how that recovery plays out.
How aviation will recover
Given the important role that airlines have worldwide, and the liquidity crisis faced by airlines now, we should expect to see more government support. US carriers will receive $25 billion in government aid, while European carriers are seeking approximately $14 billion. These aid packages are usually in the form of loans or loan guarantees, sometimes with strings attached, such as reductions on carbon emissions.
Time will tell if these rescue packages are sufficient. Much depends on size and shape of the economic recovery. There will likely be a resumption of international air travel starting mid-year, but it will take several years before passenger numbers return to pre-COVID levels.
It is unlikely that governments will bail out every airline. Of the hundreds of airlines worldwide, only about 30 airlines had healthy debt and earnings prior to the pandemic. We should expect to see more airline failures as well as a few mergers.
Traveling will be a different experience. There will be fewer options to choose from when selecting our flights, and more connections to endure. Ticket prices may initially be lower, as airlines try to boost passenger numbers, but over the long term, prices may actually be higher.
The new normal
There will be no returning to “normal” after COVID-19. The aviation industry will need to find a new normal, and there has been much speculation about what this could look like. The pandemic will accelerate several nascent trends and make travel by air a different experience:
Increased security and health precautions
The 9/11 attacks changed aviation forever. Crossing into the airside of the terminal now means arriving at the airport 2 hours early, waiting in line, removing articles of clothing, and passing through various metal detectors or full-body scanners.
Now start expecting this: mandatory face masks, temperature checks, and health questionnaires. Also: more biometrics, facial recognition, self-check-in and bag-drop. Airports will be very different places.
Immunity passports (maybe)
In my travel wallet, I carry a small yellow leaflet — my immunization record for yellow fever. Without it, I could be turned back at the border of certain countries or be subjected to immediate vaccination while still in the airport.
Early signs are hopeful that those recovering from COVID-19 carry antibodies preventing reinfection. Some have suggested the creation of “immunity passports” to permit these individuals to return to work early or travel without risk.
However, the WHO is cautioning against this. At this time, we still don’t know how robust this immunity is and how long it lasts. Immunity passports are probably a bad idea, at least until we have more data.
More hubs, higher prices
Social distancing challenges the viability of airlines. In order to enforce social distancing within an aircraft, the typical 3–3 seat configuration now has an empty middle seat. Great for passengers. Bad for profitability.
Across all aircraft types, this creates an average 62% maximum possible load factor. In 2019, only 4 airlines could have broken even at this load factor.
In 2020 and beyond, as airlines try to fill their aircraft as much as possible while still social distancing, more travel is likely to pass through aircraft hubs. Higher ticket prices will need to make up for lost revenue.
The end of big planes
For several years, the industry has already been shifting towards more narrow-body (single aisle) aircraft. These planes are easier to fill with passengers, and their new fuel-efficient engines give them massive range.
This is a sad note for those of us who love the iconic Boeing 747 and the Airbus A380. In the latter case, Airbus has stated that it will end production of the world’s largest passenger aircraft in 2021.
Is there a case to be made that larger airplanes could be used for enhanced social distancing?
Early retirements (people)
The average age of an airline pilot today is over 50. Many countries have a mandatory retirement age of 65. Already, many pilots were within a decade or less of retiring, and airlines may try to encourage their most senior (and best paid) pilots to retire early in order to reduce their payroll.
Early retirements (planes)
Fleets are being re-evaluated. Older, less fuel-efficient planes will be retired earlier in favor of newer planes with increased range and lower fuel burn. The latest high-bypass turbofan engines have much better fuel economy and reduced noise. Even though fuel prices are very low right now, environmental regulations are nevertheless forcing the transition to cleaner jets.
While aircraft are getting cleaned more carefully and thoroughly than ever, expect to see airports patrolled by autonomous sanitation robots using technology such as ultraviolet sterilization. Hong Kong International Airport is the first to implement such technology.
More private travel
At the start of the pandemic, there was a surge in privately chartered flights, mostly by people trying to get home before travel bans came into effect while also avoiding crowded terminals. At about $5000 an hour, it’s a luxury that few can afford, but those with means say they don’t intend to stop flying private. Once the travel restrictions cease, concerns about health and safety may push even more people to fly privately.
What does this mean for all those thinking about starting a career in aviation? The short answer: in the long term, not very much. Flight schools worldwide sent their students home temporarily. Many were able to resume their ground school training remotely through online classes. And with COVID-19 cases dropping in many jurisdictions, there’s hope that in-flight training will resume in the next few months.
Despite COVID-19, aviation is still facing a very significant shortage of qualified pilots. Prior to the crisis, there was a projected need for 360,000 new pilots over the next 10 years. 190,000 pilots were expected to retire. The number of pilots retiring might even be higher now on account of the pandemic. Passenger numbers will take 3–5 years to return to 2019 levels, but any young pilot entering the industry today still has solid job prospects.
As for all those pilots currently grounded, the regulators have permitted a delay on annual proficiency checks. Airlines are trying to do whatever training they can online, but it’s expected that by June there will be a significant backlog of simulator training. And with airlines retiring older aircraft in favor of new ones, pilots will need to get type-rated on the newer planes.
The future is AI
When airlines emerge from this crisis, they will do so with technologies that allow them to do more at a lower cost. Even before the pandemic, AI was slowly being rolled out to intelligently route baggage, price tickets, and optimize fuel usage. Dealing with the problem of quickly and efficiently qualifying new and existing pilots can help airlines both solve their staffing problems and reduce their training costs.
Given the shortage of instructors, what’s the fastest way to process this backlog? Our startup, Paladin AI, works closely with flight schools and training centers to build powerful analytics software to help automate pilot training as much as possible. We’re leveraging AI to give the instructor a second pair of eyes, scanning the flight sim data and assisting instructors to quickly and accurately assess the pilot’s skills and competencies. This keeps remedial training to a minimum and reduces overhead for the instructors while also providing objective evidence of performance.
This is just the beginning for AI in training. Smart training centers of the future will be deeply connected learning environments, training tomorrow’s pilots while requiring fewer instructors. With intelligent systems automatically generating lesson plans, handling scheduling, and automating assessment, adaptive learning technology will combine the best of human expertise (in piloting and instruction) with semi-autonomous hardware (training centers and aircraft).
Perhaps AI will also help find new treatments or a vaccine for COVID-19. We know that many pilots can’t wait to start flying again. As passengers, we feel the same (as soon as it’s safe to do so). Whatever the “new normal” for aviation is, we hope it doesn’t stop the world from being connected, from people exploring other cultures, and from experiencing everything that makes travel so special.