Aviation Industry PDF

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EFFECT OF OUTBREAK

OF COVID 19 ON
AVIATION INDUSTRY
OF INDIA
NAME- PARIVESH GOYAL
ROLL NO.- RQ2009A61
REG.NO. – 12014141
SECTION- Q2009
WHAT IS AVIATION INDUSTRY
Aviation is the activities surrounding
mechanical flight and
the aircraft industry. Aircraft includes fix
ed-wing and rotary-wing types,
morphable wings, wing-less lifting
bodies, as well as lighter-than-air
craft such as hot air
balloons and airships.
IMPACT OF COVID 19 ON
AVIATION INDUSTRY
The impact of the coronavirus pandemic and
the lockdown it triggered is clearly visible in
financial markets. But there is still no clarity
on the deeper impact that it is having across
businesses and industrial sectors. Based on
assessments made by different analysts and
industry body Ficci , here is an impact analysis
of the aviation sector.
1. How severe is the lockdown
impact on airlines?
•Aviation is among the worst-affected
sectors amidst the Covid-19 crisis that
has taken the scale of a pandemic.
According to the International Air
Transport Association, airlines globally
can lose in passenger revenues of up to
$113 billion due to this crisis.
•Airfares have also come under pressure
due to nearly 30 per cent drop in
bookings to virus-affected destinations.
As a result, airfares to such destinations
have fallen by 20-30 per cent.
2. What is the near-term
outlook for airlines?
•While some airlines have started
accepting advance bookings in
anticipation of easing of the lockdown
after April 14, Motilal Oswal said post
the lockdown, domestic operations
(mainly on key/metro routes) should
see a staggered start to operations.

•Indian carriers are using a hawk-eyed


approach in resuming domestic
operations; however, the rate of PLFs will
be a key concern.
Challenges face by airlines
a. Third party contractor
agreements/Hedging arrangement for
jet fuel prices: Determination of the
optimal size and dimensions of their
networks and fleet will hold the key to the
survival of airline companies.

b. Financing Arrangements: Given that


the airline companies have suspended all
their business, it would imperative to
ascertain if defaults would get triggered
under the various financing agreements
entered by the airline companies.
c. Aircraft Lease Agreements: companies may have
to revisit/review their aircraft lease agreements. The
airline companies may consider approaching the
lessor fo The airline r seeking concessions in relation
to the lease obligations including ‘rental holiday’ on
account of liquidity crunch consequent to fall in ticket
receipts post Covid-19.
d. Governmental Support: Globally, the market
structure for airline industry is set to witness a major
revamp. This change will be significantly influenced
by government responses to the crisis and types and
levels of support extended to the airline industry.
Suggestion to improve
aviation industry
1. Keep your employees in the loop: Every savvy
business person knows that sharing your company
vision with your employees helps keep them on track and
invested in the results. It’s critical to your operational
performance to actually take the time to align your
performance goals with your entire organization.

2. Stay in sync with your partners: Not being able


to control a codeshare or network partner doesn’t
mean you should stop being diligent about evaluating
their performance or thinking strategically about how
you can become more synchronized.
3. Upgrade your tech: The increased use of
new digital technologies–such as tablets,
smartphones, enterprise social networks or
cloud services–has already become
commonplace in many business environments
and airlines should be no different.

4. Take a critical look at your flight


schedules: Airlines with exceptional on-time
performance schedule block times–the total
amount of time a flight takes from pushing
back from the departure gate to arriving at
the destination gate–more efficiently on their
routes.
5. Turn your data into intelligence: Alaska
Airlines uses data analytics to bring the
obviously low hanging fruit to the forefront so
they can make quick changes and gradually
improve their operations. To aid in this effort,
Alaska holds weekly System Operational
Performance Leadership (OPL) meetings. At
these meetings, team members from divisions
across the airline gather to analyze individual
details that had an impact on on-time
performance.

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