Crisis shows why better collaboration between governments and airlines is essential | New
The nearly two-year-old coronavirus pandemic has exposed the need for better collaboration between the public and private sectors in times of crisis, especially when it comes to implementing measures that can have effects. long-term on the aviation industry, airline executives from the ALTA Airline Executives Forum said.
The initial reactions of individual governments to the global health crisis – and how they approach the post-pandemic era – will determine how successful their airlines are, including how quickly carriers recover, the executives said. October 25.
In the first months of the pandemic, many governments closed borders out of fear, with authorities delegating air travel decisions to medical professionals – not officials more familiar with how airlines operate.
“What they were putting in place didn’t make sense, and it was bossy,” Bahamasair chief executive Tracy Cooper told the Forum in Bogota. “They didn’t take a holistic view.”
This fear led to conclusions that had no bearing or consideration for the real needs of the industry and, in turn, the customers it served, executives say. In March 2020, airlines in many countries were forced to scramble to repatriate citizens after governments quickly closed borders.
Typically, a president or government would get advice from tourism ministers, but at the start of the pandemic, medical professionals and health ministers were making these decisions in a space that may not have been their expertise, âadds Jose Freig, international vice president of American Airlines.
Financial aid to airlines during the crisis created âhaves and have-nots,â leading to a patchy recovery in Latin America, said Bank of America Merrill Lynch Mexico chief executive Emilio Romano.
While the United States has set aside $ 58 billion in grants and loans to help passenger carriers weather the crisis, most carriers in Latin American countries have not received any financial assistance, to l exception of minimal tax relief. Governments in the region contributed less than 1% of 2019 revenues generated by airlines in the region, ALTA said last year. This has made Latin America the least favorable region in the world.
This dichotomy has given some carriers the ability to emerge from the pandemic in a stronger financial position overall and to compete better and more effectively on their networks, according to executives.
âYou should have had an extremely heavy cash account to get through the crisis,â said Cooper of Bahamasair. In the past two years, Bahamasair has received $ 90 million in financial assistance from its government.
“Countries that had the means and the resources are doing better in the post-pandemic era, and countries that cannot afford them tend to lag behind,” he adds.
Latin American airlines lost $ 11.9 billion in 2020, according to IATA, with losses expected to drop to $ 4 billion in 2021. Three airlines – LATAM, Avianca and Aeromexico – have voluntarily declared bankruptcy in 2020. All three hope to get out of these procedures this year.
But even despite the cash injections and the ability to bring back trained and ready-to-work staff, the recovery has been difficult, says Frias.
âEven with that particular help, when we grew as quickly as we did, we still had a few challenges,â adds Frieg.
American Airlines was forced to cancel hundreds of flights in July due to understaffing and the airline’s inability to retrain and recertify flight attendants in a timely manner as demand for domestic recreation increased throughout the summer vacation season. A similar event, made worse by bad summer weather, happened to Spirit Airlines and Southwest Airlines later in the year.
ALTA leaders are meeting for the first time in two years after the Covid crisis forced the organization to cancel last year’s event.