Saj Ahmad, Chief Analyst at StrategicAero Research, weighs in on the culmination of 2020, and what 2021 holds for the aviation sector.
With 2021 almost upon us, AMEinfo spoke with Saj Ahmad, Chief Analyst at StrategicAero Research, to discuss the culmination of the current year and its impact on the aviation sector, with considerations for what 2021 holds.
2020 was perhaps the most difficult year yet for the travel and tourism sector, thanks to COVID-19. What were the greatest challenges to the sector in your opinion?
The biggest problem stems from lack of communication between governments and health organizations on how to control the pandemic from spreading. Instructions were unclear, erratic and often late – the constant cycle of lockdowns followed by restrictions being eased has cause massive economic injuries to countries across the globe. The only thing to show for the battered aviation industry is that many high yield would-be business class passengers can effectively work from home and companies can save billions in inflated travel costs.
Will that market ever return? No.
It will make a comeback, but certainly not to 2019 levels and profitability will be forever eroded as new technology dispenses the need for expensive air travel, hotels and entertaining.
How could companies in the industry have been better prepared, and do you find that the measures they deployed were adequate? Dubai Airports CEO Paul Griffiths was quite vocal about the dissonance between health and safety measures taken across the world, which led to further hurdles for the sector as opposed to an easing of operations.
The biggest single issue for me is the complete ineptitude between aviation and health authorities not coordinating with one another to create a global travel policy.
Countries developing their own testing regimes, air bubbles, et cetera has arguable put people off from travelling and that has decimated airlines everywhere. That’s why now, we see so much governmental financial support to airlines because all bets are off. No longer is this about a level playing field. This is about survival, odds be damned. Whoever has the biggest pockets and gets the biggest handout(s) will survive.
What is your opinion on the latest updates regarding the Boeing 737 MAX controversy, especially in relation to the GCC. It seems we will finally be closing this chapter of Boeing's history.
There’s no question that there will be scrutiny on the 737 MAX every time a new or existing operator takes it into the air for the first time since its grounding. But let’s not forget that this airplane will have been the single most tested airplane in commercial aviation history. Boeing’s future is clearly at stake, but even more than that is the FAA who gave the thumbs up for the airplane to resume passenger flights again. The FAA is seen as the industry benchmark when it comes to airplane testing and validation – and they, perhaps even more than Boeing, cannot afford any mis-steps in the re-entry into service of the 737 MAX, for fear of criticism that they aren’t up to the job any longer.
But while the wider aviation industry reels from the COVID-19 effects, perhaps this less pressurized environment will allow airlines to operate the MAX, get to know and feel it again, before starting to ramp up operations.
There is no rush to resume service – indeed, big customers like United Airlines and Southwest Airlines are not planning to return their 737 MAX fleets into service until well into the first quarter of next year. And so, for operators like flydubai, they’ll take their time to re-introduce the type back into service. They’ll ensure all the updates to the airplane, flight crew training and support infrastructure will be in place to allow flights to resume. Afterall, with over 200 examples on order, the 737 MAX is absolutely critical to flydubai’s future and financial success.
Once the pandemic eases and travel too becomes easier, flydubai will arguably regain its status as the world's fastest growing airline built on the back of the 737 MAX.
What lessons do you think the industry learned from 2020 and COVID-19, and what could be done to try and bring a semblance of normal to the sector in 2021?
I fear normality will not return in 2021.
This will all be paced by the speed and avoidance of distribution incompetency as COVID-19 vaccines are shipped across the world. There have been suggestions that a country the size of the UK could take a year to inoculate. That’s around 60-70 million people. So consider how long it will take other nations with similar or bigger numbers, as well as poorer nations who will be at the back of the queue for when they get their vaccines too.
2021 will be somewhat better if vaccinations go smoothly, but given the inherent woes of 2020, all bets are off.
If you’re looking for a semblance of normality, its probably best to hibernate until July 2022...