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Domestic aviation markets. The ‘good’, the ‘bad’ and the ‘ugly’

Analysis

The COVID-19 crisis has thrown aviation and travel markets into chaos. Steep declines in airline capacity have been recorded and all eyes are on markets showing signs of recovery.

It is generally recognised that international operations will be more complex and limited than domestic markets, where standardisation of processing is possible. Internationally, consensus on inflight and airport standards will be slow in coming.

But ‘green shoots’ are expected first in countries with large domestic aviation markets.

Those that bring COVID-19 outbreaks under control will be the first to recover. Others will watch closely to see how these fare and whether the opening up of air travel is accompanied by new waves of infection.

The good the bad and the ugly classification is essentially a spectrum of risk. The "good" markets are lower risk, those which appear to be cautiously opening up, as coronavirus cases trend downwards or are already very low.

The graphs used are taken from Johns Hopkins University Coronavirus Resource Center data https://coronavirus.jhu.edu/.

Summary

  • Following steep declines in airline capacity around the world, markets are looking for indicators of when to expect recovery
  • International recovery will be more complex and limited than domestic
  • Internationally, consensus on inflight and airport standards will be slow in coming
  • But ‘green shoots’ are expected first in countries with large domestic aviation markets
  • Aviation recovery will be closely linked to success in bringing COVID-19 under control

The green shoot case studies

The early domestic market reopenings will sequentially become case studies for others, with close attention paid to the standards that are applied, such as spacing on board aircraft and airport and boarding procedures, as these states lead the way towards a recovery.

Their paths to recovery will also be watched closely to see how the airlines involved manage the process. With revenue management systems a thing of the past, most will be feeling their way through the dark, responding to passenger reluctance to fly as well as the impact of the almost certain need for such features as empty middle seats and slower turnarounds as aircraft are sanitised.

Classifying the good - and less good - among the top 30 domestic aviation markets

To date very few of the Top 30 domestic aviation markets, have achieved success in containing the first wave.

The more successful countries include Australia, China, New Zealand, Norway, Thailand and Vietnam.

Additionally, Japan, Malaysia and South Korea are also better than most.

However, many of the world’s largest aviation markets are experiencing stubbornly high, or even rising levels of COVID-19 infection.

These include Argentina, Canada, Colombia, France, Germany, Philippines and South Africa.

The ugly - highest risk of disease spread - led by the US and Brazil

Then there are the countries with massive rates of infection and/or steeply rising infection trajectories, including Brazil, Chile, India, Indonesia, Iran, Italy, Mexico, Peru, Russia, Saudi Arabia, Spain, Turkey, UK and the USA.

On the day of 18-May-2020 for example, the US and Brazil continued to be standouts. The US had 21,551 confirmed new cases and 785 deaths; Brazil had 14,288 new cases and 735 deaths, according to Johns Hopkins University data.

We have yet to see what precautions are effective for air travel, following the full passenger journey. While the atmosphere in an aircraft may be quite pure, that is not the limit of exposure for a traveller, who must as a minimum also transit two airports, with much more questionable atmospheres. And any possibility of ensuring social distancing at each step of the journey is negligible. So a great learning experience is under way.

The following table looks at the domestic markets with prospects of reopening successfully – or not. In short, the good the bad and the, for now, decidedly ugly.

That is to say, measuring the prospects of a continued successful opening without continued fear of significant new waves of infections.

Top 30 largest domestic aviation markets: quality rankings relate to COVID trends

Country

Ranking

6-Jan 2020

Current Ranking
18-May 2020

Change in 

Position

Category

COVID Status – Daily Infections

(NB – scales vary by country)

USA

1

2

-1

UGLY

 

China

2

1

1

GOOD

India

3

5

-2

UGLY

Indonesia

4

4

0

UGLY

Japan

5

3

2

GOOD

Brazil

6

14

-8

UGLY

Russia

7

6

1

UGLY

Australia

8

17

-9

GOOD

Mexico

9

13

-4

UGLY

Canada

10

12

-2

BAD

Turkey

11

N/A 

11

UGLY