Changing travel habits, and boom time for stay-at-home airlines

As the airline industry emerges from the wilderness – and, from China to the USA, there is plenty encouraging evidence of that happening – there is much discussion around how the flying experience will change for both passengers and crew. And whether any of these new rules and customs might endure beyond the pandemic itself.

Those with long memories will remember these sorts of debates taking place 20 years ago after the terror attacks on New York and Washington DC. The circumstances were very different, but the outcomes were similar. There were new regulations – enhanced pre-boarding security and locked cockpit doors – but new behaviours too. Many were reluctant to fly, or nervous when they did – worried that the pleasant-looking individual in the seat opposite could be a hijacker bent on suicide.

One controversial post-Covid change might be blocking out middle seats. Last year, several US airlines introduced this, although it was argued that lower load factors made this possible, and that, longer term, such a policy would be unsustainable without a hike in fares. A new US government study suggests that, although the risk of catching the virus on an airliner is low, keeping middle seats empty could reduce the risk of Covid-19 transmission by up to 57%.

And what about requirements for so-called vaccine passports or pre-flight testing? Late last year, airline association IATA had been hoping that governments would get together and come up with common health-check standards for re-starting international aviation. However, with countries all at different stages of recovery from Covid, and with widely different strategies for dealing with the virus, that ambition now seems unrealistic.

That might change once vaccine programmes start seriously putting the brakes on infection and illness rates across the world, but, for now, it looks most likely that nations will adopt a series of complex and shifting bilateral arrangements for permitting foreign travel. The uncertainty around these – who would book a business trip or family holiday not knowing what the rules will be several months down the line? – is likely to stall any revival in the long-haul sector.

Evidence from airline results and schedule announcements this week certainly indicate a two-speed recovery is under way, with airlines that benefit from large domestic markets seeing their fortunes rebound, while those dependent on international routes continue to struggle. Among the latter are Singapore Airlines and Hong Kong’s Cathay Pacific, carriers who, because of their tiny home territories, are wholly reliant on cross-border traffic. Both saw passenger numbers fall in March.

On the other hand, after its success in controlling the virus, China’s three largest carriers, Air China, China Eastern, and China Southern, are seeing their domestic traffic reach and even surpass pre-pandemic levels. The country’s civil aviation administration expects passenger numbers to recover to 90% of 2019 levels this year. This is despite a wobble earlier in 2021 when local outbreaks of Covid-19 saw fresh travel restrictions imposed.

Likewise, domestic carrier Virgin Australia is reintroducing 10 Boeing 737-800s and hiring again as it anticipates a boom in in-country travel in the coming months. Many Australians, effectively banned from going abroad, are taking the opportunity to make business trips, vacation or visit family and friends in the country. The airline’s recovery is significant given that a year ago it filed for voluntary administration after the first wave of Covid-19 restrictions shut down air travel entirely.

Similarly, in the USA, American Airlines plans to fly 90% of its domestic seat capacity this summer – a schedule almost equal to 2019. Again, with the expected rise in “staycations”, the carrier is also adding destinations to airports near beaches, theme parks and wilderness sites. After a year of suppressed travel, American says demand during the second quarter is stronger than anticipated.

Finally, what future for the A380, two years after Airbus pulled the plug on production of the beleaguered type? Several carriers are getting rid of their A380 fleets altogether and have begun to send the double-deck airlines to the scrapyard. However, a handful, including British Airways and Qantas, have insisted that the A380 will continue to have a place in their fleet, while Emirates, the biggest operator, has just taken delivery of the last one to be built.

However, with long-haul markets lagging, and a new emphasis on “right-sizing” fleets for demand post-Covid, it is difficult to see much of a future – either with existing customers or on the secondhand market – for a four-engine superjumbo with 500-plus seats. Given the benefit of hindsight, would anyone (Emirates apart perhaps) have ordered an A380?