The World Health Organization (WHO) stated that COVID-19 is no longer a global health emergency. Let’s take a look back at how the pandemic affected the aviation industry.
In March 2021, AviationSource released a book called “Aviation & COVID-19”, where we documented what the effect of the pandemic was on each individual segue of aviation.
The book particularly looked at the time period of March 2020-2021.
Over the course of today, each Chapter from the book will be released for our audience to read for free.
Without further ado, let’s get into it!
Aviation & COVID-19 Chapter 6: The Consumer Response…
Consumer confidence is possibly one of the most important things that the industry is currently looking at when it comes to the COVID-19 pandemic.
Without confidence, the industry fails. It is as simple as that.
This chapter will look at two studies conducted on consumer confidence within the aviation industry.
One from May-June 2020 and the other released in March 2021. From there, there will be an establishment of whether consumer perceptions have changed either positively or negatively towards flying during the pandemic.
The Start of the Pandemic
The first study comes from ICF International (2020), where the key findings presented that the view on the recovery of the industry had “become markedly more pessimistic” (Ozores et al. 2020, p. 3).
It also noted in the study that typically, respondents in a study like this would expect the industry to recover in around six to 12 months, but “now the majority of respondents expect the recovery to take at least two years”, with ICF stating that such a belief matched its initial forecasting (ibid).
Respondents to the survey also noted that the way airlines behave socially and corporately will become an “increasingly important factor, demonstrating the importance of trust in getting passengers back in the air”, referring to the “increased importance of airlines offering standard flexibility to win back consumer confidence” (ibid).
As well, there was significant support for government bailouts to support the industry as best as possible, which of course, will not make Mr. O’Leary happy, as discussed in the previous chapter about the Government Response during the pandemic.
The pandemic at that time had changed the temptation-based behaviors about traveling to certain locations. From the data, it believes that “travelers will tread delicately, mindful of situations that might compromise their new-found interpretation of social distancing”, which given the behaviors of different populations globally, was quite understandable (ibid, p. 11).
71% of respondents stated that they would not travel to North America through the remainder of the calendar year, which is linked to the U.S handling of the pandemic, a lack of mask mandating, several events during the U.S election, which didn’t include much social distancing amongst other things (ibid).
The common theme of business travel not returning for a considerable amount of time was well followed at the beginning of the pandemic, as seen in this study. Around 70% of the respondents to the study intended “to reduce their travel to conferences”, which we would see through the emergence of conferencing applications such as Zoom and Microsoft Teams etc. (ibid, p. 13).
And with that in mind, business customers “will likely view travel as a luxury rather than a necessity”, which will, of course, have “a significant effect on local tourism economies as business travelers limit the use of their corporate credit cards” (ibid).
As mentioned previously in this chapter, as the industry would be looking towards a recovery, flexibility on air tickets remains the single most important thing to customers, with 89% believing that statement (ibid, p. 16).
Corporate and social responsibility of the airline comes second at 64%, with low fares third at 40% as well as an airline’s onboard product coming third at 34% (ibid).
In terms of public confidence, this, of course, is segmented completely into different perspectives being:
- Are airlines doing enough to build confidence?
- Are governments doing enough to build confidence?
- Are airports doing enough to build confidence?
The answer, according to ICF, is dependent on where you live, with the company using the UK, North America, and India as the main three examples.
For example, the UK and North America believe that airlines are not doing enough to build up confidence in the industry, with India strongly believing they are (ibid, p. 17).
In the UK, respondents strongly agree that the UK Government is not doing enough to restore confidence, which was discussed in the Government Response chapter, whereas two-thirds of North Americans believe the government is doing all it can (ibid). India remains the same across airline and airport perspectives in terms of agreement about whether enough is being done.
In North America, there seems to be a 50-50 split on whether airports are doing enough, whereas nearly 40% of those in the UK believe that enough is being done, which does not offer any positivity at that point about such conditions (ibid).
Finally, the main belief amongst 94% of respondents is that “the travel industry should put more focus on sustainability in the future” as we look towards coming out of the pandemic, which is something consumers want to see from “a travel industry about to essentially reboot operations” (ibid, p. 22).
Where we are now…
Fast forward to where we are now. March 2021 at the time of writing.
The industry nears the one-year anniversary of the overnight grounding of all international and domestic operations. In that 12-month period, 68% of respondents to the IATA Air Traveller Response to COVID-19 “say travel restrictions have negatively impacted their quality of life” (IATA 2021, p. 2).
What we see in this study also is the beginning of pent-up demand showing, especially from countries such as the UK, where roadmaps for leaving lockdown measures are becoming more of a reality.
87% of respondents stated agreed with the view that “COVID-19 will not disappear” and that the world needs “to manage its risks while living and traveling normally” (ibid, p. 7).
Nearly half of all respondents believe that the air travel restrictions go too far, but 71% believe that borders should be opened progressively as cases of the virus decrease (ibid).
Continuing the theme of pent-up demand also, 57% of passengers would wait two months or less to travel again once the pandemic is contained, which is an increase from 45% recorded in June 2020 and 49% in September 2020 (ibid, p. 4).
However, this is overly dependent on the situation regarding quarantine by that time. 84% of respondents stated that they will not travel if there is a chance that they may be quarantined at their destination (ibid, p. 5).
The visiting friends and relatives (VFR) segment of the market is also very pent-up as well, with 72% of respondents stating that they will travel by air to see friends and family once this pandemic has been contained, which is up from 63% recorded in September 2020 (ibid). Therefore, many airlines are expecting this segment to recover quickly.
Demand for business travel is slowly returning, with 62% of respondents saying that they will travel by air less for business. But that figure is down 10% from September 2020, which is good news, with 56% saying that they will postpone air travel until the economy stabilizes (ibid, p. 5). That figure is also down by nine percent as well, so it ultimately shows promising trends ahead.
In the last few months, at the time of writing, there have been huge calls by IATA to implement an application that confirms you have either produced a negative COVID-19 test result or a certificate stating that you have been vaccinated.
Four-fifths of respondents would use an app like this as soon as available, but only on the condition that their data can be controlled themselves, with 89% agreeing that governments globally must come together to standardize vaccination and testing certifications so “everyone plays by the same rules” (ibid, p. 6).
As IATA Director-General Alexandre de Juniac mentioned at the time, people want to get back in the air (IATA, 2021a):
“People want to get back to travel, but quarantine is the showstopper. As testing capacity and technology improve and the vaccinated population grows, the conditions for removing quarantine measures are being created. And this points us again towards working with governments for a well-planned re-opening as soon as conditions allow”.
He also stated that as we aim to begin recovery, there needs to be a roadmap for the industry to follow and aim to hit milestones along the way.
“The top priority of everybody at the moment is staying safe amid the COVID-19 crisis. But it is important that we map a way to being able to re-open borders, manage risks and enable people to get on with their lives. That includes the freedom to travel. It is becoming clear that we will need to learn to live and travel in a world that has COVID-19. Given the health, social and economic costs of travel restrictions, airlines should be ready to re-connect the world as soon as governments are able to re-open borders.
“That is why a plan with measurable milestones is so critical. Without one, how can we be prepared for restart without an unnecessary delay?”
What remains clear from those two studies is that the consumer response is shifting in a positive light. To put it bluntly, people are fed up with staying at home.
After so much time in isolation, they want to see the world again, see family and friends that they have not touched base with in over a year as well as want to come back to a sense of normality.
While normality will not be like how it was in 2019, we can enter this new normal by the industry preparing at all costs to bring on the new challenges that the consumer may hit them. And they need to do it sooner rather than later, maybe even as early as Summer 2021.