By Vivek Pattanayak in Bhubaneswar, June 7, 2020: Smooth operation of international air travel in the COVID-19 era is really anyone’s guess at the moment if everyone has to stay two meters apart.

The International Air Transport Association (IATA) has estimated that global aviation industry will lose $252 billion in 2020 in the wake of COVID-19, though demand for flights is impossible to predict. Global air passenger traffic plunged by 94.3% in April as compared to the same month a year ago as the Covid-19 pandemic virtually shut down air travel across the world, the IATA recently said.

“April was a disaster for aviation as air travel almost entirely stopped. But April may also represent the nadir of the crisis. Flight numbers are increasing. Countries are beginning to lift mobility restrictions,” said IATA’s Director General and Chief Executive Alexandre de Juniac.

“This is a rate of decline never seen in the history of IATA’s traffic series, which dates back to 1990,” said a press release by the organisation that has around 300 airlines as its members.

“Passenger demand in April (measured in revenue passenger kilometers or RPKs), plunged 94.3% compared to April 2019, as the Covid-19-related travel restrictions virtually shut down domestic and international air travel,” the airlines body said. The RPK for a flight is calculated by multiplying the number of passengers in the plane to the total distance travelled by it.

In fact, growth and progress of international air transport from 1945 onwards had faced many bumps, headwinds, turbulence and ups and downs starting from the oil crisis of 1972-73, Iran-Iraq war of 1981-82, Gulf war of 1990-91, the Asian market collapse of 1997, terrorist attack of 9/11, pandemic like SAARS of 2003 and financial turmoil of 2008. All these had brought decline to the passenger traffic and loss to the aviation sector. But the virtual collapse of aviation industry is recorded for the first time in the history in the aftermath of outbreak of COVID-19 epidemic.

The latest estimates made by International Civil Aviation Organization (ICAO), a specialized agency of the United Nations, clearly indicate that there would be an overall reduction ranging from 40% to 53% of seats offered by airlines, decline of 2,247 million to 2,915 million passengers and approximate potential loss of US$ 297 billion to US$ 384 billion of gross operating revenues of airlines. The impacts depend on duration and magnitude of the outbreak and containment measures, the degree of consumer confidence for air travel, and economic conditions etc.

ICAO calculates a decline of passenger traffic between 44% to 59% from 2019. Airport Council International (ACI), an international body of airports predicts a reduction of traffic ranging from 50 to 57%. The most affected regions are Europe, North Africa and Asia-Pacific taking the lion share of this global loss.

In the tourism sector, which is highly dependent upon air transport, according to Unite Nations World Tourism Organization (UNWTO), the consequential loss of receipts would be between US$ 910 billion to US$ 1179 billion as against revenue of US$ 1.5 trillion in 2019.

In terms of global merchandise trade, the loss will be between 13% to 32% as estimated by World Trade Organization. International Monetary Fund has predicted a contraction of the world Gross Domestic Product (GDP) by 3% which is much worse than 2008 financial crisis.

The international air transport being vital to world’s supply chain carrying one third of world’s cargo through freighter service and in the aircraft belly of airliners, while transporting 4.5 billion passengers annually, has been one of the principal engines of propulsion of the global economy. Near complete lockdown in the world has grounded the international aviation for far too long a period bringing historic torpor to the world’s travel, trade, business and commerce. Time for take-off must be planned with urgency and perspicacity in the interest of revamping the world economy. The restart and recovery would be possible only by an international approach.

ICAO, the global aviation regulatory body has already made some extremely useful recommendations in this regard keeping in view the principles of essential connectivity, actively managing safety, security and health related risks keeping public health measures in picture while protecting people with harmonized and flexible procedures and strengthening the much required public confidence based on collective spirit among all the related cogs in the aviation wheel.

This presupposes a synchronous planning process among the key players like safety regulator, security agency, airports, airline and public health agency and the government. As a salient point, the need to distinguish between restart from recovery has been highlighted. Measures of financial reliefs, sustainability and improvement in resilience have also been envisaged as a part of “take-off” strategy. It is heartening to note that ICAO has urged the States to identify and bridge gaps to ensure adequate support to vulnerable segments of international community.

The States should consider guidelines for airports, aircraft, crew, and cargo which have been prescribed by the Council Aviation Recovery Taskforce (CART).

In this context, it would be appropriate to mention that the Assembly of ICAO representing all the member States as early as 2004 had passed a resolution concerning protection of the health of passengers and crews and prevention of spread of communicable disease through international travel recognizing the worldwide transmission by means of air transport.

Based on this, ICAO has issued guidelines under aviation medicine which also contain procedures issued by ACI and IATA dealing with sanitation, screening and health checks etc. covering passengers, aircraft crew, airline staff, airport personnel, cargo agents, aircraft, baggage, cargo etc.

ICAO has issued letters to the States and Electronic Bulletins since the World Health Organization (WHO) declared COVID 19 as Public Health Emergency of International Concern (PHIEC) on 30 January under International Health Regulations of 2005.
Revival of international aviation should have to be planned to keep in view all these guidance materials.

In addition, the Chicago Convention 1944, which is considered as the basic international law on air transport envisages obligation of States under Article 14 in respect of prevention of spread of disease, under Article 22 on facilitation formalities including quarantine and under Article 37 to adopt international standards and recommended practices (SARPS). Annex 9 is the relevant SARPS for facilitation. ICAO Document 10042 dealing with facilitation covers International Health Regulations of 2005 placing responsibilities on the States to plan for Public Health Emergency of International Concern (PHEIC).

For last two decades ICAO’s Universal Safety Audit Programme has ensured in gradual improvement in compliance to international standards and procedures by States. Scope of audit did not include Annex 9.In view of COVID 19 which has debilitated international air transport for a significant period causing huge loss to the aviation sector and the global economy perhaps the need for inclusion of Annex 9 for audit has arisen.

Airlines and airports which have suffered tremendous financial losses would need bail out packages by way of moratorium on loan repayment, fresh induction of loan capital, subventions, and tax reliefs etc.

Way back in 1995 under the initiative of a group of developing States, the Assembly of ICAO keeping in view the objective of Article 44 to meet the needs of the peoples of the world for safe, regular, efficient and economical air transport had urged to consider establishment of international aviation fund which eventually led to establishment of International Financial Facility for Aviation Safety for a limited purpose of assisting the least developed countries(LDCs) for rectification of defects found during international audit. This facility also since some years has been superseded by a diminutive mechanism called FUND.

In the aftermath of 9/11 when insurance companies expressed reluctance to give coverage to aircraft there was an emergence of unprecedented crisis which was obviated when the sovereign guarantees were offered temporarily.

In the light of present experience to meet a future Black Swan event, ICAO should revive the idea of international funding mechanism to bail out airlines, airports and other players in aviation sector, while keeping banking and insurance institutions which are also liable to catastrophic failure out of its scope.

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