The continuing COVID-19 Pandemic has wreaked havoc on almost every sector of the global economy. Numbered, however, among the sectors suffering most is the air transportation industry.
As Kompas.com reported, global air traffic suffered a devastating decline starting from Q1 2020 with the worldwide onset of the coronavirus.
The chief investment officer of the Development Bank of Singapore (DBS), Hou Wey Fook, projects that the airline sector will be among the last to recover from the crippling economic effects of COVID-19. Speaking in a virtual seminar on Thursday, 01 October 2020, Wey said: “While I am confident they will recover, the time required will be much longer than other sectors of the economy, such as hotels and restaurants.
Wey explained that because the airline industry’s business model depends chiefly on passengers’ movements, the airline will face difficulties in restoring their cash flows to levels experienced before the pandemic.
“Moreover, business travel is not likely to recover until an effective vaccine is discovered and distributed worldwide. Because of this, Wey cautioned, the aviation industry will take longer to recover than other sectors of the economy.”
Hou Wey Fook, Development Bank of Singapore (DBS),
Commenting further, Wey said that traditionally most people fly for business reasons. Because of the widespread disruption of the aviation industry by the global pandemic, businesses have suddenly learned how to work online at a distance. “Now, most business people feel comfortable with working online,” says Wey.
Moreover, business travel is not likely to recover until an effective vaccine is discovered and distributed worldwide. Because of this, Wey cautioned, the aviation industry will take longer to recover than other sectors of the economy.