With the coronavirus outbreak officially declared as a pandemic, many governments are putting a halt on businesses and the economy to minimize the spread of it. This includes grounding travel plans and flight schedules between countries. Many countries have started issuing a travel ban to limit the entry of the said virus and its exposure to other countries. It wouldn’t be a lie to say that COVID-19 has literally halted the world to a stop. Not only does it affect world health, but it affects the progression of political, social, legal, economic and technological factors of the modern world. As more cases are being reported daily, public health officers and governments are desperately trying to flatten the curve and slow the contagion of the virus – at the same time, focusing on increasing the numbers of healed cases.
Out of the many businesses and industries that are being affected by the COVID-19 pandemic, there is one industry that is being affected on a large scale – and that is the aviation industry. Being one of the most secured industries, it is both a shock but also not a surprise the aviation industry is experiencing a downturn. After multiple countries announced that they will be limiting cross-border flights, many airlines are struggling to stay in business even with the travel bans and the decrease in passengers. Significant reduces in the number of passengers booking flights has resulted in planes flying with empty seats and the cancellation of flights. If they were to completely stop operations, they would be unable to reach the quota needed to pay all their employees and risk going bankrupt – especially during the outbreak. But if they were to continue, they would be wasting money on flying empty planes with barely any passengers. Either way, it was a lose-lose situation for the flight industry. They would also be risking violating moral values and public health issues if they were to operate as if there was no outbreak. Every airline still has to maintain their CSR (Corporate Social Responsibility) – rather lose profit rather than contributing to the spread of the virus and death rates.
With numerous airlines temporarily suspending their operations, many of its employees’ work are halted and has temporarily become ‘unemployed’. Many pilots are to stay at home as there are no planes needed to be flown. Since the airlines are not making profit, these airlines are putting their employees on unpaid leave – meaning that it doesn’t count against an employee’s annual leave allowance, but allow employees to take time out of work without pay for a variety of other reasons. Thus, this becomes a problem of its own. It is not clear when the pandemic will be over or when the vaccine is going to be found, there is an uncertainty on this matter that makes people nervous about the future of their jobs and whether or not they will get paid. The pandemic has shattered the stigma of having a job in the aviation industry is stable and certain. With the virus outbreak, many of these employees are left hanging on their future income. A typical airline employs over 300,000 workers, and if it was to stop its operations, that would mean that over 300,000 people and their families will be rendered helpless with no income (mind you that there are hundreds of airlines operating on a global scale).
In Indonesia, local airlines such as Garuda, Lion Air, Air Asia and many others, are slowly halting any activities to reduce the spread of the virus. Air Asia has temporarily stopped all flights starting from April 1, 2020. Air Asia stated that the decision they took was to anticipate the spread of COVID-19 in the country. The move was referred to as a form of support for the efforts of the Indonesian Government to limit the exposure of COVID-19 to the public. Air Asia has sent all their employees to stay at home on an unpaid leave. However, salaries and wages are expected to still be paid but with a reduction of 10-15% as a result of halting its activities. The spokesperson for the Indonesian Minister of Transportation – Adita Irawati stated in a teleconference on Friday (3/20/2020) that on March 19, 2020, there was a decline in domestic aircraft passengers by 40 to 60 percent. Then for international passengers, it was around 66 to 70 percent decline. This decrease was a result of people practicing social distancing and reducing the intensity of traveling. As it is known that there have been many travel warnings and restrictions, the purpose of which is to reduce transmission of COVID-19.
When the World Health Organization (WHO) issued out a statement that officially announced that COVID is a pandemic, many airlines worldwide have not yet realized that that was the start of their demise. The crisis that rendered them on the brink of bankruptcy. Until today, many of these airlines are still walking on thin ice, not knowing how the future will roll out for the aviation industry. Many of these airlines are requesting assistance and bailouts from their government to avoid from spiraling down even more. COVID-19 is making the world go into a global crisis – the fate of the aviation industry included. It is not yet clear when the pandemic will be over or when it will be safe to go out, but one can only hope that these airlines will not enter a state of insolvency.
Written By: Aisyah Daniswari
Photo: World Economic Forum
Source: World Economic Forum, BBC, Bloomberg