In late 2019, a novel coronavirus outbreak emerged in Wuhan, China, which rapidly spread across the globe, resulting in a pandemic of unprecedented proportions. The highly infectious virus, known as Covid-19, caused a significant loss of life in a short period, prompting governments worldwide to implement stringent measures to curb its spread. In the UK, the travel and tourism industries contributed a substantial 6.7 percent of the overall gross value added in 2018. However, the pandemic hit these sectors hard in at its peak for over two years, with governments imposing restrictions in the UK and worldwide leading to extended periods of reduced tourism activity. On 16 March 2021, unwarranted travel was not encouraged in the UK, followed by a nationwide lockdown announcement. Although some easing of restrictions occurred in June and July, regional variations resulted in a mixed impact on the travel and tourism industry. The airline sector suffered the most from the pandemic's spread, leading to unprecedented challenges for many UK airlines. As countries worldwide implemented travel restrictions and lockdowns, demand for air travel plummeted, leading to substantial revenue losses for several UK air travel agencies. The second and third lockdowns towards the end of 2020 further impacted travel, leading to the suspension of travel corridors on 18 January 2021.
The COVID-19 pandemic dealt a heavy blow to the airline industry in the UK, resulting in significant financial losses for many carriers. To keep their businesses afloat, airlines had to cancel flights and reduce their workforce. Despite some financial support provided by the UK government, the assistance fell short of covering the industry's losses. In response to the pandemic, people's travel patterns have shifted, with many choosing domestic travel or staying closer to home. This change has had a profound effect on carriers such as British Airways and Easyjet, which relied heavily on international travel. Like other countries, the UK implemented measures to mitigate the spread of the disease, including vaccination. Three years after the pandemic, this study tries to examine the impact of corona Virus pandemic on the UK airline industry.
Table of Contents
Introduction
Literature Review
Research Methodology
The Research Questions.
Results and Discussion.
A British Airways Case Study.
The Strategies Put in Place
The Status Quo for the Airline
The Changes in Travel Behavior post-pandemic
The Enduring Impact of Corona Virus on the operations of British Airways.
A Case Study of the Ryan Air.
The Extent of the Impact
easyJet Case Study
Discussion and Analysis.
Conclusion and Summary
References
Introduction
In late 2019, a novel coronavirus outbreak emerged in Wuhan, China, which rapidly spread across the globe, resulting in a pandemic of unprecedented proportions. The highly infectious virus, known as Covid-19, caused a significant loss of life in a short period, prompting governments worldwide to implement stringent measures to curb its spread. In the UK, the travel and tourism industries contributed a substantial 6.7 percent of the overall gross value added in 2018. However, the pandemic hit these sectors hard in at its peak for over two years, with governments imposing restrictions in the UK and worldwide leading to extended periods of reduced tourism activity. On 16 March 2021, unwarranted travel was not encouraged in the UK, followed by a nationwide lockdown announcement. Although some easing of restrictions occurred in June and July, regional variations resulted in a mixed impact on the travel and tourism industry. The airline sector suffered the most from the pandemic's spread, leading to unprecedented challenges for many UK airlines. As countries worldwide implemented travel restrictions and lockdowns, demand for air travel plummeted, leading to substantial revenue losses for several UK air travel agencies. The second and third lockdowns towards the end of 2020 further impacted travel, leading to the suspension of travel corridors on 18 January 2021.. Albers, S., & Rundshagen, V. (2020).
The COVID-19 pandemic dealt a heavy blow to the airline industry in the UK, resulting in significant financial losses for many carriers. To keep their businesses afloat, airlines had to cancel flights and reduce their workforce. Despite some financial support provided by the UK government, the assistance fell short of covering the industry's losses. In response to the pandemic, people's travel patterns have shifted, with many choosing domestic travel or staying closer to home. This change has had a profound effect on carriers such as British Airways and Easyjet, which relied heavily on international travel. Like other countries, the UK implemented measures to mitigate the spread of the disease, including vaccination. Three years after the pandemic, this study tries to examine the impact of corona Virus pandemic on the UK airline industry. Through interviews and research questionnaires with stakeholders and travelers, the study will assess the pandemic's weight on key sectors of the economy and explore the best strategies to inform decision-making in the future should similar situations arise.
Literature Review
Far removed from any other pandemic in recent times, COVID–19 came as a shocker for the world population and a big test of scientific and technological preparedness for extremities, medical science notwithstanding. The Health Foundation UK reports that there is a continuing infection of COVID – 19 there have been over nineteen million infections within a span of fourteen months in the UK alone. This number numbers only continued to grow, even with the implementation of restrictive measures such as social (physical) distancing, school closures, closure of non–essential businesses, and work–from–home campaigns and schemes.
Although the UK government allowed for the continuity of operations for key sectors such as health and social care, security and law enforcement, education and other key public services, the virus began exhibiting variants, with a special UK variant, Apha (B. 1.1.7) being identified in September of 2020. This variant was considered more volatile and deadlier and with a higher rate of transmission. These mutations of the virus left in its wake bouts of lockdown measures, with the UK implementing a tier system of lockdown in a bid to allow the provision of services and to keep schools open. National economic losses were huge during the time of the pandemic, with several sectors feeling the effects adversely, but the airline sector suffered the most.
The global travel and tourism industry has been severely impacted by the COVID-19 pandemic, causing significant damage. The World Travel & Tourism Council estimates that as of 2020, 75 million workers were at risk of losing their jobs, and there could be a potential GDP loss of US$2.1 trillion. The tourism sector is losing one million jobs every day due to the pandemic. Studies on the effects of previous epidemics, such as SARS and avian flu, suggest that recovery patterns depend on the efficiency of institutions and the hysteresis factor. However, the COVID-19 pandemic requires new empirical models to account for its impact. A dynamic model has been developed to test COVID-19's effects on the economy, which includes characteristics on the empirical link between tourism GDP, tourism employment, spending, government policies, investment, and the pandemic shock. The population's demographics in Europe and the world make them more susceptible to epidemics, further emphasizing the need for improved strategies to address future outbreaks.
Due to the closure of international borders to restrict non-essential travel, the aviation industry was one of the earliest industries to experience significant effects of the pandemic. The degree of spread of the virus across the world, and the mutations that happened thereof, rummaged through the aviation subsectors, grounding airlines and the entire workforce. By the mid–pandemic times, Corona Virus had reduced air travel by 94%. It was predicted in 2020 predicted that the UK aviation industry faced a loss of revenue of up to £20.1 billion towards the endemic stages of the pandemic; airlines bled $168 billion in losses, much of this value pinned on pandemic – induced plunge in passenger traffic, Easyjet for instance, had their losses plummet to £1.3 billion. But the worst-hit airliner in the UK in terms of economic losses was British Airlines, with a record loss of £7.1 full year loss in 2020. Several other airlines across the UK registered the biggest annual losses in their history after national lockdowns and other travel restrictions wiped out passenger traffic Kasim et al. (2023).
The enormous financial losses incurred by the travel and tourism industry were primarily attributed to the cancellation of flights. In response to the pandemic, British Airways made an announcement in April 2020 that it would halt all flights departing from Gatwick Airport in London. Ryanair also announced that it would suspend all flights until June 2020. At its peak, most airlines could cancel up to 97% of all their scheduled flights, mainly due to staffing shortages and low passenger turn-up expectations. British Airways could cancel up to eighty flights in a single day scheduled for takeoff from the regional hub Heathrow.
At the height of the pandemic, the financial implications pressed the airlines to take measures to cut losses. According to a report by the Center for Aviation (CAPA), UK airlines were losing an estimated 52 million every single day. The furloughing of staff, reduction of salaries, and selling assets to survive were inevitable for airlines, and existing data shows that many workers were no longer interested due to poor working conditions.
Government Intervention
To liberate and cushion the larger aviation industry from losses, the government of the UK, through radical actions, came to the rescue of the airline industry with massive financial bailouts and other nonfinancial support programs. In collaboration with the Association of Airports in the UK (AOA), the government devised a robust support and recovery plan that it called an investment for the future, and the issues were implemented
The Issue Government Action
The shutdown of airports and grounding of airlines
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- Quote paper
- Nicholas Main (Author), 2023, Examing the Far-Reaching Effects of Covid-19 on the Airline Industry in the United Kingdom, Munich, GRIN Verlag, https://www.grin.com/document/1357479
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