Assignment

Course title: special problem code (com.680)

Department: commerce

Program:M.com

Roll: 10

Registration:2020-GCWUF -4042

Submitted to:Mam kanwal Shaheen

Submitted by: Monika Rehman

THE IMPACT OF COVID-19 ON THE AIRLINE INDUSTRY
The 2019 coronavirus (COVID-19) pandemic as the newest global risk has disrupted business
operations in all industries. The airline industry is one of the first industries that was affected
from the event because the disease is easily passed among people. To date, there is no official
medical treatment for the disease, causing a tremendous panic for world citizens. Thus,
governments around the world have prohibited cross-country transportation. The market
value of the airline business has shrunk since then.

the World Health Organization (WHO) announced the first COVID-19 infected case in China
on December 31, 2019 (WHO, 2020), we consider three major dates related to COVID-19:
(1) the first infected case outside China reported in Thailand (January 13, 2020); (2) the
outbreak in Italy (February 21, 2020); and (3) the declaration by WHO on the global
pandemic outbreak and the announcement of the U.S. ban on travelers from 26 European
countries (March 11, 2020)

PIA lost 1.2 billion rupees ($7.6 million) due to suspension of flights to different countries,

The coronavirus outbreak has affected businesses worldwide, and the travel industry is
certainly no exception. The closing of borders and stoppage of non-essential travel has had
devastating consequences for airlines—the worst the airline industry has ever experienced in
its entire history.

The air transport sector (passenger and freight) represents only a small share of OECD
countries’ value-added (around 0.3 % on average,). Yet, strong inter-industry linkages with
both upstream and downstream sectors make it an important part of the economy.
When the COVID-19 crisis hit air transport, the whole aviation industry was
affected

The change in the behaviour of passengers following the COVID-19 crisis, travel restrictions
and the ensuing economic crisis have resulted in a dramatic drop in demand for airline
services. According to IATA, passenger air transport measured as revenue passenger
kilometre was down 90% year-on-year in April 2020 and still down 75% in August. The
collapse in economic activity and trade affected freight, which was almost 30% lower year-
on-year in April and still about 12% lower in August.
The size of the shock has put the liquidity buffers of airline companies under pressure, even if
a significant share of its costs are variable (around 50% according to IATA, notably fuel
accounting for 25% of the total costs) and the recent drop in oil prices has decreased airlines’
operating costs.
In the medium run, airline companies face two uncertainties:
 The cost of health-related measures. Operating costs are likely to increase in
the short-run for both airlines and airports because of additional health and safety
requirements (e.g. disinfection, PPE, temperature checks or viral tests) before they
can be passed on to consumers. Moreover, if implemented for air transport,

 air transport, social distancing measures could force a reduction in the

passenger load factor (i.e. the number of seats that can be occupied during a flight) by
up to 50%.
 The shape of the recovery for commercial flights. International travel
restrictions, the contraction of economic activity and changes in transport behaviour
by cautious consumers may prevent a return to pre-crisis demand levels, even as
lockdowns and domestic travel restrictions measures are loosened in many countries.
Commercial air traffic is slow to recover: as of September 2020, the number of flights
remains more than 40% below pre-crisis level globally (Figure 2). This hides
differences across flight lengths: the drop is even more pronounced for long-haul
flights. In the longer run, changes in consumer behaviour may result in structural
 changes in air transport demand. Even though the rebound of domestic flights in
China suggests that traffic may revert to pre-crisis levels, a permanent drop in demand
from pre-crisis levels cannot be excluded, either through modal shifts in services trade
(e.g. video-conferencing instead of business travel) or, to a lesser extent, through
substitution with other modes of transport (e.g. high-speed trains).
The combination of negative demand and supply shocks and the uncertainty around the
medium-run outlook create an uncertain perspective for airline companies. Through inter-
industry linkages, this uncertainty affects the whole aviation industry. Moreover, the industry
remains exposed to a possible resurgence of the pandemic, as governments may impose new
air travel restrictions to tackle flare-ups or a potential second wave of infections. This may
threaten the existence of some firms in the industry, as production and revenues are likely to
remain inferior to pre-crisis levels for some time
Figure 2. Commercial air traffic, world

Number of flights tracked daily by Flightradar24, 2020 v. 2019

Airline companies were in very different situations before the COVID-19 crisis began. In
particular, air transport is one of the sectors with the highest dispersion in productivity across
firms and, to a lesser extent, in profitability. Airline companies thus entered the crisis with
 strikingly different abilities to withstand such a shock and heterogeneous prospects for the
future.
Bankruptcies or mergers and acquisitions among large companies could have a negative
effect on competition in air transport, with possible repercussions on prices. Even if 80% of
passenger seats are on routes with several carriers, many of these routes rely on a small
number of firms (36% of routes involve only two or three carriers).

Aviation is often a target of policy intervention, and even more so with

COVID-19y

Past public policy interventions in the aviation industry have had different rationales. Most
interventions have targeted aircraft manufacturers. These firms are usually subject to
learning-by-doing and significant economies of scale, which may cause under-investment in
technology, innovation or production facilities and, hence, justify public support. Public
policies have also aimed at co-ordinating a wide array of suppliers and different know-how,
and ensuring aircraft safety. More recently, aircraft manufacturers have also been the target
of green industrial policies, seeking to accelerate the shift towards low-carbon aircraft.
Beyond supporting aircraft manufacturers, governments have also intervened to preserve
employment in large air transport companies.
When it comes to the response to the COVID-19 crisis, most of the sector- or firm-specific
measures thus far have targeted air transport. As of August 2020, governments have provided
about USD 160 billion of support to airlines (Figure 3). Almost two-thirds of that support
consists of direct aid (subsidies, loans, equity, cash injection), while one quarter takes the
form of wage subsidies. Interventions have generally taken three forms:
 Untargeted support schemes, designed to provide liquidity to firms
irrespective of their activity, including the extension of existing job-retention schemes
or the introduction of new ones;
 Sectoral schemes (e.g. airlines operating in Australia or the whole aviation
industry in France), including those supporting airline workers (e.g. the Payroll
Support Program in the United States);
  Firm-specific support measures, including partial or total nationalisation,
implemented by some countries because of the presence of large companies in the air
transport sector (e.g. Alitalia, Lufthansa).
Figure 3. Government support to airlines in the aftermath of the COVID-19 crisis

Monetary value of relief measures for airlines across economies, as of August 2020

Note: Proposed or confirmed, monetarily quantified relief measures for airlines provided by
governments or government-backed entities across 57 countries as of August 20, 2020 in
billion USD, Measures include: government-backed commercial loans and government
guarantees; recapitalisation through state equity; flight subsidies, nationalisation; deferral
and/or waiver of taxes and charges; grants; and private equity.

Source: OECD elaborations on Abate, Christidis & Joko Purwanto (2020)

As the crisis lingers, governments may resort more to equity injections. Even if airline
companies did not appear to enter the crisis with higher leverage than firms in other sectors,
their debt level could increase by as much as 28% in 2020, according to IATA. Absent any
equity injection, this would significantly affect their capacity to finance new investments and,
for some firms, affect their solvency.
The COVID-19 crisis has reinforced some of the rationales that were previously used to
justify support to the aviation industry. In particular, liquidity challenges, increasing debt
burdens and uncertain prospects can jeopardise crucial investments to reduce the industry’s
carbon intensity, notably the acquisition of more fuel-efficient aircraft.
Whereas industrial policy in the aviation industry has primarily focused on aircraft
manufacturers, the crisis exposed the crucial role of air transport and airport infrastructure for
the connectivity of peripheral areas (in particular islands). In several countries (France,
Greece, Iceland, Italy, Spain, Norway, Portugal), retail tariffs of air carriers for domestic
transportation are regulated and sometimes subsidised as a result of a public service
obligation on certain routes.
The change in the behaviour of passengers following the COVID-19 crisis, travel restrictions
and the ensuing economic crisis have resulted in a dramatic drop in demand for airline
services. According to IATA, passenger air transport measured as revenue passenger
kilometre was down 90% year-on-year in April 2020 and still down 75% in August. The
collapse in economic activity and trade affected freight, which was almost 30% lower year-
on-year in April and still about 12% lower in August.
The size of the shock has put the liquidity buffers of airline companies under pressure, even if
a significant share of its costs are variable (around 50% according to IATA, notably fuel
accounting for 25% of the total costs) and the recent drop in oil prices has decreased airlines’
operating costs.
In the medium run, airline companies face two uncertainties:
 The cost of health-related measures. Operating costs are likely to increase in
the short-run for both airlines and airports because of additional health and safety
requirements (e.g. disinfection, PPE, temperature checks or viral tests) before they
can be passed on to consumers. Moreover, if implemented for air transport, social
distancing measures could force a reduction in the passenger load factor (i.e. the
number of seats that can be occupied during a flight) by up to 50%.
 The shape of the recovery for commercial flights. International travel
restrictions, the contraction of economic activity and changes in transport behaviour
by cautious consumers may prevent a return to pre-crisis demand levels, even as
lockdowns and domestic travel restrictions measures are loosened in many countries.
Commercial air traffic is slow to recover: as of September 2020, the number of flights
remains more than 40% below pre-crisis level globally (Figure 2). This hides
differences across flight lengths: the drop is even more pronounced for long-haul
flights. In the longer run, changes in consumer behaviour may result in structural
 changes in air transport demand. Even though the rebound of domestic flights in
China suggests that traffic may revert to pre-crisis levels, a permanent drop in demand
from pre-crisis levels cannot be excluded, either through modal shifts in services trade
(e.g. video-conferencing instead of business travel) or, to a lesser extent, through
substitution with other modes of transport (e.g. high-speed trains).

Looking ahead, policy interventions should foster the resilience and

sustainability of the aviation industry

Governments have to strike the balance between support to the aviation

industry and the need to preserve competition, in particular when considering
firm-specific measures

Government interventions can have ambiguous effects on competition. On the one hand, the
failure of a small number of companies could significantly lower competition while their
rescue can prevent that from happening. On the other hand, equity injections may put at risk
the ‘competitive neutrality’ of the state and affect the access of foreign companies to the
domestic market. Good governance of state-owned enterprises is essential to avoid negative
effects on competition, and also to promote the efficiency of the controlled firms. Measures
to foster competition should in particular focus on lowering the costs of entry, for instance
by reserving relinquished airport slots for new entrants.

Governments’ priority should be to preserve business dynamics in the aviation

industry

If not well-designed, government interventions can slow business dynamics and ultimately
productivity growth. If they go beyond sector-wide interventions and provide firm-specific
support, governments should only target solvent and productive companies. As in any other
industry, governments should avoid supporting non-viable companies; rather, they should
allow exit and promote resource reallocation. In practice this calls for sector-wide measures
and boosting competition.
The risk that government interventions negatively affect business dynamics and productivity
may be particularly acute for air transport, given the high dispersion of profitability and
productivity across firms in the sector. With demand likely to remain muted in the medium
run, the sector has started to adapt and downsize. In this context, governments should enable
 downsizing rather than counter it, being particularly careful to foster restructuring or exit of
the least efficient firms while continuing to target an efficient use of public resources.
In the process of restructuring, government need to smoothen the transition for displaced
workers. Besides mitigating costs for firms, job retention schemes protected aviation industry
workers’ income at the height of the crisis. As uncertainty regarding the cost of health
measures and the shape of recovery for commercial flights resolves, job retention schemes
need to adjust to target jobs that are viable but at risk of being terminated. At the same time,
governments need to focus on supporting aviation industry workers at risk of becoming
unemployed, rather than supporting specific jobs.

Policy interventions should encourage investment to improve the sustainability

of the aviation industry

Although significant, the reduction in emissions due to containment measures and the
economic crisis is likely to be only temporary, and will be inconsequential in slowing down
climate change. While the grounding of a significant part of the global fleet could result in
the retirement of the least efficient aircraft, the COVID-19 crisis could also reduce or
postpone the necessary low-carbon investments due to financial constraints and the recent
drop in oil prices. The crisis has already dampened the ambitions of the Carbon Offsetting
and Reduction Scheme for International Aviation (CORSIA).
Investment in cleaner aircrafts and fuel can contribute to long-term resilience in the aviation
industry. Putting firms on a sustainable path can contribute to their long-run viability and
mitigate moral hazard potentially induced by the current wave of support. In that respect,
governments’ interventions should consider the transport sector holistically and, where
relevant, consider promoting a shift towards more energy-efficient transport modes, e.g. high-
speed rail.
Making firm-level support decisions contingent on environmental improvements may help
ensure that firms transition into cleaner technologies and fuels, and that the transition occurs
gradually (e.g. the loans and loan guarantees to Air France and Lufthansa). In particular, as
shareholders, governments should encourage this shift.
Policy interventions to support investment in sustainability should address the
whole aviation value chain, including aircraft and engine manufacturers and
airports

Policies should not engage in stimulating demand for aircraft by airlines. The additional costs
could jeopardies the solvency of the latter and be ineffective in ensuring a steady flow of
orders for aircraft manufacturers.
Moreover, rather than focusing on large players, interventions should ensure that young firms
and start-ups are included, for instance through complementary measures (e.g. the French
Aeronautics support plan includes funds and subsidies dedicated to small and medium-sized
firms). Failing to include young firms may lead to excessive consolidation by the largest
players.
Mission-oriented strategies aimed at greening the aviation industry can be a useful tool in this
respect, and industrial-policy responses to the COVID-19 crisis targeting the aviation
industry should be part of the low-carbon transition strategies implemented or under
discussion in many OECD countries. Such coordinated packages of policy measures can
contribute to addressing societal challenges, in particular by coordinating all stakeholders and
ensuring the consistency and complementarity of public and private investments.

Decreased Scheduled Flights, passengers Effect On Air Cargo

In 2021, due to the coronavirus pandemic, the estimated number of scheduled passengers

boarded by the global airline industry amounted to just over 2.2 billion people. This
represents a 50 percent loss in global air passenger traffic compared to 2019.Millions of
passengers have had to cancel their scheduled international and domestic flights as a result of
the coronavirus crisis and its resulting border closures and travel restrictions. Statista reports
that the number of scheduled worldwide flights during the week of June 1, 2020, decreased
by 65.1% when compared to the week of June 3, 2019.
There were also rapid changes to air cargo. Both air cargo capacity and demand fell in
February, only to experience further decline after the mass cancellation of passenger flights,
as it is on these jets that half of the global air cargo is carried. By late March 2020, the cost to
send cargo by air across the pacific ocean had tripled.
In 2021, despite the coronavirus outbreak, the cargo airline industry generated revenue
streams of 175 billion U.S. dollars.
Air cargo and the COVID-19 pandemic
Amid the coronavirus (COVID-19) pandemic, the global air cargo industry demonstrated a
confounded business performance. Although the level of air freight volume declined, the total
revenue generation increased. While passenger aviation was hit harshly and swamped by the
deteriorating business conditions, the global air freight volume decreased by roughly 20
percent in March 2020 compared to March 2019 levels. Contrary to intuitive beliefs, widely
imposed lockdowns across countries and declining industrial production during the
coronavirus pandemic did somewhat positively affect revenue levels of the air cargo market.
During 2020, the air cargo companies generated higher revenue than expected, which could
be mostly driven by the rising prices for rapid transport of goods on airplanes. For example,
the number of cargo flights in China and Germany increased during March 2020 compared to
months before the COVID-19 hit widely.

Airfreight forwarding
The process of facilitating the transportation network of freight by air is the main task of
airfreight forwarders. With the help of freight forwarders, industrial organizations design
business operations across the globe. Consequently, airfreight forwarders are one of the
facilitators of the increasingly interconnected international trade relations. Although a
multitude of companies strives to achieve more and more market share in airfreight
forwarding, some are more successful than others as a result of a well-developed business
strategy. As of 2019, DHL Supply Chain & Global Forwarding, Kuehne +Nagel, and DB
Schenker Logistics were the three leading airfreight forwarders based on the volume of
freight handled. Advancements in global trade creates an incentive for an expansion of
opportunity space for air freight forwarders. By 2024, the size of the total freight forwarding
market, including airfreight, is expected to reach 178 billion U.S. dollars, which is a 23
percent increase from 2018 levels.

However, because of reduced passenger numbers, cargo’s importance to airlines has

increased. This is evidenced by an increase in weekly cargo flights by American Airlines, as
well as increases in daily cargo flights by New American. Many airlines, including Delta, are
transporting medical and other essential supplies to countries in need, which is contributing to
the continued relevance of airport foreign object damage.

Due to the coronavirus outbreak, commercial airlines estimate to generate only 227 billion
U.S. dollars in passenger revenue in 2021 Impact of COVID-19 on worldwide revenue with
passengers in air traffic
Over recent decades, the aviation industry experienced an increasing trend until 2019.
Between 2009 and 2019, air passenger revenue in the global aviation industry grew from
about 374 billion U.S. dollars to around 607 billion U.S. dollars in 2019. Nevertheless, the
coronavirus (COVID-19) pandemic reversed6 the growth trend for at least a couple of years.
Due to the COVID-19 pandemic, the airline passenger revenue loss was estimated at around
370 billion U.S. dollars in 2020. In the absence of government aid, airline groups cannot
accommodate a recessionary shock similar to the magnitude and persistence of the COVID-
19. Therefore, numerous airline groups have requested for large government fiscal help
package to survive the coronavirus crisis. As of September 2021, governments across the
globe already allocated over 243 billion U.S. dollars to airlines due to COVID-19.

COVID-19's impact estimate on passenger revenue of airlines by region

2020
Given that the novel coronavirus (COVID-19) outbreak intensifies, annual estimates for the
aviation industry adjusted. As of April 2021, annual passenger revenue in the Asia Pacific
region was forecasted to decline by approximately 120 billion U.S. dollars from the previous
year COVID-19 and the global aviation
Amid the coronavirus (COVID-19) pandemic, countries and organizations began to
implement precautionary measures to contain the spread of COVID-19 for a public purpose.
Some of the preventive methods included imposing lockdowns or encouraging no travel
unless necessary by governments. Similarly, businesses adopted a multitude of strategies to
cope with the challenge, such as avoiding business travels or minimizing them. When
aggregated, these measures by the governments and businesses affected the aviation industry
adversely. Starting from February 2020, the year-on-year revenue-passenger kilometer (RPK)
change on international routes continued to decline, reaching roughly 99 percent of decline
by April 2020. This decline implies an almost complete cancellation of air travel across the
globe. Just like previous months, the enormous negative effect of COVID-19 on passenger
aviation continues to persist as of September 2020. Consequently, airlines were desperately
urged to request government aid. For instance, Lufthansa Group received over 12 billion U.S.
dollars and Air France – KLM roughly 11.7 billion U.S. dollars in government bailout
package. Despite all, the vulnerability of airlines perseveres as the coronavirus pandemic
exposes the globe to the second wave of infections across countries.

The financial and operational impacts

Analysis  1  of the global air transport industry shows that airlines are facing a loss of
$84.3 billion in 2020.The financial impact of COVID-19 has been huge to the
aviation industry. The International Air Transport Association (IATA) reported
passenger demand in April at its lowest plunging by 94.3%  2  compared to April
2019. IATA initially stated  4  that airline passenger revenues could drop by $314
billion in 2020 due to COVID-19, a fall of 55% compared to 2019, however further
analysis  5  is now showing this could fall by as much as $419 billion.

Regionally speaking, Asia Pacific has seen the largest net profit impact. However,
Africa is seeing the highest decrease in passenger demand with expectations for this
region to experience worsening effects in the coming months. The below table
summarizes IATA's forecasts  6  for regional demand, capacity and effect on net
profit for 2020.

Aviation consultation and resuming operations

The implementation of policies and practices required across many governments

will take time to coordinate; however, there is considerable expertise and leadership
that operators can use in support of ‘opening the skies’. The resumption of
international flights will require many consultations on solutions and risk
management measures in responses to COVID-19. Despite varying national policies,
global cooperation within aviation has remained strong.  

As government and industry restrictions on the aviation industry begin to ease, it is

vital that the procedures set out by the appropriate industry bodies and authorities
are adhered to consistently to control and manage risks such as the COVID-19
pandemic. In terms of the passenger journey, every element from the airports of
departures and arrival, the flights themselves, and other supply chain operators need
to ensure consistent effective risk management.

The industry now needs to carefully support the return to work process with
consideration to how and what aviation roles will look like in the future

A large challenge for the industry will include the skilled employees needed to
support operations. The pandemic resulted in global travel shutdown which left
many forced to take leave and others without jobs. In the initial phases of the
pandemic crisis, articles such as Financial Times ‘Let’s redeploy airline workers to
help national health services’  9  considered the skills of some aviation employees
and how they could otherwise be utilized. The industry now needs to carefully
support the return to work process with consideration to how and what aviation
roles will look like in the future.

In terms of practical guidance there has been considerable thought leadership.

ICAO, IATA and ACI representatives contributed with the World Health
Organization initial guidelines “Operational considerations for managing COVID-
19 cases or outbreak in aviation”   The article set out thoughts on how to manage
suspected cases onboard an aircraft. Subsequently, many further practical guides
have been published including the ICAO Council Aviation Recovery Task Force
(CART) publishing ‘Take-off: Guidance for Air Travel through the COVID-19
Public Health Crisis’  

Airports need to adapt new safety and risk management measures in

conjunction with operators

Airports need to adapt new safety and risk management measures in conjunction
with operators. A joint publication with Airports Council International (ACI) and
IATA was released ‘Safely Restarting Aviation – ACI and IATA joint
Approach’ This developing from the previous publication from IATA “Restarting
aviation following COVID-19” This considered medical evidence and multi-layered
approaches to support the restart of operations. Suggestions included:
  Temperature and symptom screening

 Use of masks and PPE (Personal Protective Equipment)

 Physical distancing

 Cleaning and disinfecting infrastructure

 COVID-19 testing and antibody testing

 Immunity passports

 Measures to assist contact tracing

 As well as measures related to pilot and crew members and their layover
experience.

Similarly, the European Union Aviation Safety Agency (EASA) published a safety
directive looking at methods of disinfection, quarantine as well as social distancing.
EASA have since launched a charter to monitor COVID-19 operations in practice,
announcing first joiners  in early June 2020.

Many authorities including CAAC have published guidance for operators, the
CAAC releasing ‘Preventing Spread of Coronavirus Disease 2019 Guideline for
Airlines’   in which interestingly, they differentiated responses needed for
international versus domestic flights through risk scoring mechanism. Depending on
the risk score, different prevention and control measures are recommended.

In the US, the Safety Alert for Operators  (SAFO) published guidelines set out by
the Centers for Disease Control and Prevention (CDC) and the Federal Aviation
Administration (FAA) for air carriers and crewmembers in relation to COVID-19,
with similar aims to reduce the exposure of crew members as well as the risk of
transmission on board aircraft

Financial performance of airlines amid COVID-19

Due to the nature of business activity involved, airline groups usually hold fewer liquidity
accounts in their asset portfolios. This tendency is especially the case for traditional airlines,
although somewhat less true for low-cost carriers (LCCs). While analyzing the 2019 financial
balance sheet data of European airlines, Lufthansa Group held only 12 percent of its global
revenue in liquid assets, such as cash. Similarly, Air France-KLM around 22 percent of its
revenue in liquid accounts. On the other hand, Wizz Air and Ryanair demonstrated the best
liquidity accounts amongst all European airline groups, with over 47 percent of 2019 total
revenue as liquid assets. The importance of liquid assets emerges when a business is in
unexpected need to finance itself but does not have access to immediate finance capacities.
For instance, a company with high illiquid asset portfolio firstly needs to liquidate its illiquid
assets and then only be able to meet due business obligations. According to another analysis,
Pakistan International and Precision Air have a high risk of collapse as of November 2020.

Pakistan topped the Condé Nast Traveler’s list of best holiday destinations for 2020 in
December 2019 Pakistan topped the Condé Nast Traveler’s list of best holiday destinations
for 2020 in December 2019

Employee Reductions

Pakistan vowed to cut jobs and sell non-core assets after a series of bailouts, including one of
3.2 billion rupees in June so the airline could meet interest payments. About 2,000 employees
have taken voluntary redundancy already, according to the airline. Meanwhile, non-core
operations such as catering and engineering will be outsourced,

The pandemic put PIA in an even tighter spot. More routes were closed off and it missed out
on peak travel periods like the annual Hajj pilgrimage. The carrier posted a net loss of 34.6
billion rupees ($226 million) for 2020, which despite the challenges from Covid was an
improvement from a deficit of 52.6 billion rupees the previous year.
Even airlines in good financial health have been left reeling because of the coronavirus,
which has caused dozens to collapse and thousands of job losses globally. In its latest outlook
last week, the International Air Transport Association said carriers worldwide will lose
about $48 billion in 2021 as virus flareups and mutations extend the timeline for a restart of
global air travel.
PIA had 30 aircraft as of Sept. 30, including 12 Boeing Co. 777s and 11 Airbus SE A320s
what changes would be made to the fleet, which also includes ATR aircraft, but he said the
size would be “kept under 30” and include more fuel-efficient planes. PIA will no longer
serve destinations such as Tokyo and Manila
As a result of canceled flights, airlines worldwide have been forced to reduce employee
numbers. BBC airline industry news reported on June 11, 2020, that Lufthansa plans to cut
22,000 jobs, with half of these cuts to occur in Germany. On the same day, Heathrow
announced its current employee levels had become impossible to sustain due to a 97%
decrease in passenger numbers between May 2019 and May 2020, and it revealed plans to
restructure frontline roles. Flydubai also announced employee reductions on June 11th,
stating that it had extended reduced employee pay indefinitely. It was also revealed that the
carrier had placed dozens of its pilots on unpaid leave for one year.

TSA announces new rules and policies

Since the start of the covid-19 crisis, the Transport Security Association has implemented
new procedures and guidelines for staff and passengers. New social distancing procedures
such as the placement of visual reminders and staggering security checkpoint lanes are now
in place. For frontline employees, the TSA has published guidelines on routine cleaning and
disinfection. There is now a medical exemption for hand sanitizer, allowing up to 12 ounces
per passenger in carry-on bags until further notice.

Sources:

 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7451055/#!po=1.08696
 https://www.oecd.org/coronavirus/policy-responses/covid-19-and-the-aviation-
industry-impact-and-policy-responses-26d521c1/
 https://www.statista.com/topics/6178/coronavirus-impact-on-the-aviation-industry-
worldwide/
 https://www.statista.com/topics/6178/coronavirus-impact-on-the-aviation-industry-
worldwide/#dossierSummary
 https://www.bbc.com/news/business-53007048
 https://mediacentre.heathrow.com/pressrelease/details/81/Corporate-operational-
24/12349
 https://www.wtwco.com/en-GB/Insights/2020/06/how-covid-19-has-affected-the-
aviation-industry