The Impact of the COVID-19 Pandemic on the Aviation Industry

Abstract

The impact of the pandemic is far from over, with most countries still grappling with whether and how to lift lockdowns and travel bans. The aim of this paper is to provide insights into the how the COVID-19 pandemic has impacted on international aviation. First, a brief review of the literature regarding previous crises that affected the aviation industry in recent decades is provided. Next, utilising PEST (Political, Economic, Socio-Cultural, and Technological factors) analysis, the influence of the pandemic on the aviation industry is investigated. The findings indicate that the aviation industry will enter a new round of the adjustment cycle, with the possibility of a large number of airlines going bankrupt, whilst others will need to reorganise, or be subject to merger with, or acquisition by, larger players in the sector. It would appear that the recovery of the aviation industry will be a long and slow process. Moreover, existing aviation business models may well need to be replaced by new ones, with airlines having to develop in the direction of unmanned and contactless service provision. The article is concluded with short-term and long-term recommendations for airlines regarding recovery of the demand for air travel.