- The revenue stream of most budget air carriers and some of the adequately established airline operators have been muddled since the last 10 months.
- The financial inconvenience in the aviation sector is likely to persist in the near future as travel restrictions are going to stay.
- As several parts of the aviation sector were previously operating with multiple difficulties even in the pre-pandemic stage, the present situation has furthered the deterioration.
The aviation sector has been one of the worst victims of the coronavirus pandemic as the repeated, and prolonged travel curbs have disrupted the industry for a longer-than-expected stretch. With the extended cutdown of international and domestic travel, some are anticipating aviation could never revive to the previous levels. The steadily evolving mass-scale inoculation drive is likely to develop a possibility of relaxations, but the businesses are not in a position to provide comprehensive guidance until the fears of coronavirus settle fully.
The already disturbed revenue stream of most budget air carriers and some of the adequately established airline operators have been muddled since the last 10 months. The deserted cash flows have pictured multiple nightmares for the operators as the value chain of the aviation industry is shuddered from inside with the earnings of managerial staff to the operative workforce being slashed in big numbers.
Not only this, the regular rent payments to the concerning airports at a time of minimalistic chunk of revenue, and the prolonged spiralling inability to stay afloat has been disastrous for the companies. With the government introducing multiple checks and mandating the requirement of negative Covid report, the interest of non-frequent fliers has taken a huge hit in the recent past.
The pandemic-induced financial trouble has weakened the foundation of the air carriers resulting in the reduced capacity to continue multiple operations at a time. The regularly declining prospects of the revival have pushed back further the chances of a considerable breakthrough in the monthly receivables.
The financial inconvenience in the aviation sector is likely to persist in the near future as travel restrictions are going to stay for a meaningful period due to the steep surge in the infections after the arrival of the mutated strain of coronavirus. As per the government’s guidelines, all the international arrivals to the UK are required to stay quarantined for a period of 10 days.
The 10-day mandatory isolation period is over and above the obligatory requirement of negative Covid test just 72 hours before boarding the flights from the source airports. The authorities are seemingly leaving no stone unturned to break the chain and check the ever-rising number of daily infections.
But the conditions and restrictions being put on fliers are quite negative from the airlines’ perspective.
(Image source: ©Kalkine Group 2021)
How much will be suffice
The aviation sector is in dire need of a consequential stimulus package that can steer the industry through the national lockdown and the extended time to which the restrictions are here to stay. The stringent regulations are battering the airline-to-airport in a big way now as they are already troubled with the months-long dreadful repercussions of the pandemic.
As several parts of the aviation sector were previously operating with multiple difficulties even in the pre-pandemic stage, the present situation has furthered the deterioration. The unforeseen drop in the number of footfalls and the successive decline in the future bookings has taken a heavy toll on the air carriers.
Karen Dee, Chief Executive Officer of the Airport Operators Association, has recently highlighted the difficulties faced by the airports to stay open on nearly empty pockets due to the government’s guidance of minimising the travel. She urged the government authorities to provide relief from air traffic, regulatory, business rates and policing in the present, as well as the upcoming tax year.
Aviation experts are mooting for a monetary aid that can suffice the requirements of operational costs of the beleaguered airports.
The frequent problems arising within the aviation sector has faded away from the possibilities of recovery even if the economic condition reaches the pre-pandemic levels soon. To overcome such a huge revenue-less period, the aviation industry must undertake exceptional measures that can bolster their presence in the market, reaffirming the intention to operate in challenging times alongside continuing with the lucrative promotional offers.