History can provide some guidance...
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History can provide some guidance...
I’m sure there are many of us worried about the current crisis caused by Coronavirus and what it means for our careers and future.
Although there has been nothing exactly like the current shutdowns etc, history has plenty of examples. When put together these can provide some insight into wear the future lies. Take what you want from this post but I hope it may provide some comfort that life will go on after it’s all over...
There won’t be a ‘quick recovery’ at the end of this. The economy won’t miraculously bounce back like all the politicians are telling us. Be prepared for a slow recovery.
Even IATA predictions show a V shape recovery taking until 2022. Every other forecast they have is longer, 2024 and onwards.
9/11 resulted in a 30% drop in domestic USA traffic. It took 3 years to recover to the same point and by then the industry was more efficient.
SARS was isolated to SE Asia so can’t really be used as an example. But it also resulted in a 30-40% drop in traffic but only over 6 months.
The Great Depression provides an economic example for what happens when governments don’t intervene like they do now (quantitative easing etc). Again the airline industry was tiny back then so comparisons are useless.
Another interesting statistic, there is a measurable link to household savings versus stock market returns. Basically as the stock market declines the household saving rate goes up. In the GFC with a 40% decline household savings increased from 2% -> 8/10% of income. What this tells us is that the average household may still go to Ibiza/Caribbean/Bali/etc but they aren’t going to go every year or may aim for a cheaper destination.
Travel restrictions on international travel will remain probably throughout 2020. China has had another outbreak in the city of Hubei, placing another 10 million people on lockdown. Individual countries may get it under control and allow domestic travel, but if ticket prices are higher, more people will drive instead of flying. Exactly like they used to when airfares were more expensive.
So given all the above I’ll add my 2 cents and make a prediction but only basing it on the above points.
- more airlines will go broke, even into 2021. This will be because demand won’t recover quickly and those airlines with plenty of cash but slow to react management will find themselves in dire straits when demand doesn’t come back soon enough.
- travel demand will reduce. I’m guessing the first full year of no restrictions will be in the order of 30-40% reduction on 2019 figures.
- I don’t think our first full year of no restrictions will start until mid 2021 at the earliest. So until then demand will be ‘must travel’ with mandatory quarantine at the other end for international.
- job losses will continue throughout the year in ALL industries. While companies may not go bankrupt they’ll be trimming the fat so to speak and making their operations more efficient.
- with all the uncertainty in the economy households will save more money and be careful where they spend it. This will continue through 2020 and will be a dampening effect on any economic recovery despite government intervention.
What would I do? No idea. Hang on to my job and hope for the best at this stage. But if I was made redundant I’d most likely change industries and go in a different direction.
History has pretty much all the answers you’ll ever need. It may not have happened exactly like this before, but there will always be enough examples (of many things) to put together your own jigsaw puzzle and guess at least the direction things might go.
Good luck to everyone!!
Although there has been nothing exactly like the current shutdowns etc, history has plenty of examples. When put together these can provide some insight into wear the future lies. Take what you want from this post but I hope it may provide some comfort that life will go on after it’s all over...
There won’t be a ‘quick recovery’ at the end of this. The economy won’t miraculously bounce back like all the politicians are telling us. Be prepared for a slow recovery.
Even IATA predictions show a V shape recovery taking until 2022. Every other forecast they have is longer, 2024 and onwards.
9/11 resulted in a 30% drop in domestic USA traffic. It took 3 years to recover to the same point and by then the industry was more efficient.
SARS was isolated to SE Asia so can’t really be used as an example. But it also resulted in a 30-40% drop in traffic but only over 6 months.
The Great Depression provides an economic example for what happens when governments don’t intervene like they do now (quantitative easing etc). Again the airline industry was tiny back then so comparisons are useless.
Another interesting statistic, there is a measurable link to household savings versus stock market returns. Basically as the stock market declines the household saving rate goes up. In the GFC with a 40% decline household savings increased from 2% -> 8/10% of income. What this tells us is that the average household may still go to Ibiza/Caribbean/Bali/etc but they aren’t going to go every year or may aim for a cheaper destination.
Travel restrictions on international travel will remain probably throughout 2020. China has had another outbreak in the city of Hubei, placing another 10 million people on lockdown. Individual countries may get it under control and allow domestic travel, but if ticket prices are higher, more people will drive instead of flying. Exactly like they used to when airfares were more expensive.
So given all the above I’ll add my 2 cents and make a prediction but only basing it on the above points.
- more airlines will go broke, even into 2021. This will be because demand won’t recover quickly and those airlines with plenty of cash but slow to react management will find themselves in dire straits when demand doesn’t come back soon enough.
- travel demand will reduce. I’m guessing the first full year of no restrictions will be in the order of 30-40% reduction on 2019 figures.
- I don’t think our first full year of no restrictions will start until mid 2021 at the earliest. So until then demand will be ‘must travel’ with mandatory quarantine at the other end for international.
- job losses will continue throughout the year in ALL industries. While companies may not go bankrupt they’ll be trimming the fat so to speak and making their operations more efficient.
- with all the uncertainty in the economy households will save more money and be careful where they spend it. This will continue through 2020 and will be a dampening effect on any economic recovery despite government intervention.
What would I do? No idea. Hang on to my job and hope for the best at this stage. But if I was made redundant I’d most likely change industries and go in a different direction.
History has pretty much all the answers you’ll ever need. It may not have happened exactly like this before, but there will always be enough examples (of many things) to put together your own jigsaw puzzle and guess at least the direction things might go.
Good luck to everyone!!
I think the bounce back will be very fast. The economy is already changing very quickly as it adapts to social distancing, creating new jobs in the process. As far as retail is concerned, online shopping was already killing it, Coronavirus just accelerated the trend. Restaurants can rebound quickly, as fast as they can hire staff. Other service industries can also start instantaneously.
What doesn’t start quickly is manufacturing and farming. Mining is used to start/stop operations as well.
What doesn’t start quickly is manufacturing and farming. Mining is used to start/stop operations as well.
You are correct about one thing, history can provide some guidance. It's failed societies and empires over and over again from an unlimited supply of currency and continual intervention of Governments into that supply and the free market.
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I think the bounce back will be very fast. The economy is already changing very quickly as it adapts to social distancing, creating new jobs in the process. As far as retail is concerned, online shopping was already killing it, Coronavirus just accelerated the trend. Restaurants can rebound quickly, as fast as they can hire staff. Other service industries can also start instantaneously.
A lot of the money in the economy came from international tourism and students - that might take some time to return.
I think the bounce back will be very fast. The economy is already changing very quickly as it adapts to social distancing, creating new jobs in the process. As far as retail is concerned, online shopping was already killing it, Coronavirus just accelerated the trend. Restaurants can rebound quickly, as fast as they can hire staff. Other service industries can also start instantaneously.
What doesn’t start quickly is manufacturing and farming. Mining is used to start/stop operations as well.
What doesn’t start quickly is manufacturing and farming. Mining is used to start/stop operations as well.
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The return to some sort of normal spending will be swift, just not so for a minority of industries (international travel and tourism).
A great deal many Australians are still working full time, some of them under different conditions, some of them under normal conditions. There are many people who will be chomping at the bit to travel domestically (driving or flying) or taking a holiday. As soon as restrictions begin to ease there will be increased optimism, increased movement and increased expenditure.
Australia as a whole is doing very well regarding suppressing the numbers of infected cases. We are fortunate to be an island nation having full control of its borders.
People (yes, myself included) have short memories - life will one day return to normal and we will look back and wonder what the fuss was all about. I will probably just remember it as the time I watched Tiger King on netflix. Oh, and the time I didn't do as much flying as I would have liked. Take care people.
A great deal many Australians are still working full time, some of them under different conditions, some of them under normal conditions. There are many people who will be chomping at the bit to travel domestically (driving or flying) or taking a holiday. As soon as restrictions begin to ease there will be increased optimism, increased movement and increased expenditure.
Australia as a whole is doing very well regarding suppressing the numbers of infected cases. We are fortunate to be an island nation having full control of its borders.
People (yes, myself included) have short memories - life will one day return to normal and we will look back and wonder what the fuss was all about. I will probably just remember it as the time I watched Tiger King on netflix. Oh, and the time I didn't do as much flying as I would have liked. Take care people.
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It's all the 'free' money that the corrupt Govt have been handing out that will have the biggest longest effect on this country! Somebody has to pay! Generations to come will be feeling this economic effect by way of higher living expenses which in turn will stifle a return to a pre CV way of life not to mention the social and mental health issues we are going to face!
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Careful Machtuk, you are talking about an LNP gummint here, remember they cannot do ANY wrong whatsoever!...even when they do get it wrong (which they don't apparently, but IF they did), somone else is ALWAYS to blame!
Dontcha knoe!?!?!?!
Dontcha knoe!?!?!?!
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Im afraid the recovery for aviation will be slower than most think. It will depend greatly on how long it takes countries to open their international borders because only this will signify that the pandemic is over. And who (no pun intended) honestly thinks any country is going to open their borders to China soon, after all the deceit they have engaged in to date.
The virus is still spreading wildly in the US and has yet to peak in many countries around our region (Thailand, Philippines, Indonesia - all popular tourist destinations for Australians).
Even Singapore and Japan are still on the up curve. So international isolation is not going to end any time soon.
When Australian states do open their borders and domestic travel begins again it’s not going to be a case of just rock on down to the airport and get on a flight to Cairns or Alice Springs or wherever. The social distancing thing is here to stay for now so expect a myriad of checks and procedures for your average punter to get on an aircraft.
My feeling is a lot of people will either be too scared or too f@&cked off to bother flying (assuming anyone has any money).
Then it’s possible the centre seats in each isle will be blocked for social distancing. Tell me any airline that made a meaningful profit with a permanent 33% of seats blocked - even assuming all the available remaining seats could be sold. It could be done but not with discount fares. Without discount fares who will be able to afford air travel.
So with all these highly likely limitations, how can anyone believe there will be a rapid V shaped recovery for aviation. Sorry for the negativity but facts are facts.
The virus is still spreading wildly in the US and has yet to peak in many countries around our region (Thailand, Philippines, Indonesia - all popular tourist destinations for Australians).
Even Singapore and Japan are still on the up curve. So international isolation is not going to end any time soon.
When Australian states do open their borders and domestic travel begins again it’s not going to be a case of just rock on down to the airport and get on a flight to Cairns or Alice Springs or wherever. The social distancing thing is here to stay for now so expect a myriad of checks and procedures for your average punter to get on an aircraft.
My feeling is a lot of people will either be too scared or too f@&cked off to bother flying (assuming anyone has any money).
Then it’s possible the centre seats in each isle will be blocked for social distancing. Tell me any airline that made a meaningful profit with a permanent 33% of seats blocked - even assuming all the available remaining seats could be sold. It could be done but not with discount fares. Without discount fares who will be able to afford air travel.
So with all these highly likely limitations, how can anyone believe there will be a rapid V shaped recovery for aviation. Sorry for the negativity but facts are facts.
Last edited by DHC8 Driver; 28th Apr 2020 at 14:41.
It will have to be government subsidised. They will want airline travel back for economic recovery, so if they continue to demand social distancing aboard aircraft they will have to underwrite it to make it profitable until they lift those restrictions.
Social Distancing is an impossible concept, impossible and ridiculous. It happens when it's convenient. The necessities of the economy, of human interaction and just living will see it disappear fairly quickly.
What would be really nice would be a bit of personal hygiene and consideration for people around you when you cough, sneeze etc. I think it goes without saying that you should be caned for spitting (as mentioned in another thread).
What would be really nice would be a bit of personal hygiene and consideration for people around you when you cough, sneeze etc. I think it goes without saying that you should be caned for spitting (as mentioned in another thread).
Who says that the center seats will be blocked. If we look at other airlines around the world that have started operations again they for the most part still have the middle seat. If you are traveling in a family or close group you can use the middle seats, most are just employing upgraded prior screening i.e temp checks. Emirates are conducting rapid testing of all passengers, airlines in China are just making all wear masks, you have to pre-purchase food and drinks in the departure lounge and there is no onboard service. At the end of the day the social distancing restrictions are just made up numbers anyway, if the virus is contained then there is no virus to spread. Let's face it anyway, the load factors are going to be so low for the foreseeable future that aside from groups traveling together no middle seats will need to be assigned. Also there are a number of companies that are investigating screens between seats, lets face it, all of this is bollocks much like 90% of the security debacle, it will just be there to make it look like something is being done. The most likely danger spots will be security and boarding ques.
