What lies ahead for airlines during turbulent times?

 With the advent of Covid-19, airlines have experienced massive revenue losses. Whilst some airlines have folded, others have survived with the assistance of government intervention, whilst others are draining their financial resources to cover their costs.

Whatever, modus operandi airlines currently use, one thing is for sure: this business model is unsustainable. So, the question arises....How will airlines adapt to the new reality?

The Path Forward During Turbulence

Of course, in order to receive government grants to operate, airlines must also strictly comply with new regulations arising from the Pandemic. One such proposed piece of legislation relates to an Immunisation passport.

In case you haven't heard about this, the immunisation, or vaccine, passport is identification that shows that you have been vaccinated against Covid-19. This requires tremendous international cooperation, since the passport will not work if only a small number of passengers on any given flight actually have one.

However, steering the proposal foward are airline heads such as Qantas, who are proposing to actually 'ban those who don't have one'.

It might seem counterproductive to demand greater regulation on a dwindling client base, which is, in effect, what telling all your passengers that they must have the passport does. However, Qantas and others are likely gambling that they won't be alone in requiring this. They are working on the assumption that this will become an industry standard, with full government backing.

Another hurdle to it's implementation is that cooperation between governments is often painful, to say the least. Take for instance the trade disputes between Australia and China. With firmly entrenched positions, a resolution seems a long way off. So, with this in mind, will governments cooperate to implement such a far reaching project as vaccine passports? The answer is probably...yes.

The reason why we can be so 'bullish' on this is that the Pandemic has unavoidable global implications. The effects on the econonmy of say, New Zealand, will also affect China, why? Countries such as China rely on international markets for their economy to thrive. So, if travel, hospitality, et al, continue to suffer overseas, Chinese growth will be curtailed. So, a vaccine passport will likely succeed where other international proposals have failed. Of course, no country will cede their sovereignty to another, so a global body of oversight, such as with the United Nations, will probably steer the project forward.

So, What Lies Ahead?

Therefore, the priority now, for authorities, is to get massive take up of vaccines among the population. Then, to issue the vaccine passports, then, to achieve some sort of pre-Pandemic normality.

But here is where the hurdle lies. Getting sufficient numbers of people to take up vaccination. Some countries have had a measure of success, even countries such as the UK. But, until this occurs on a global scale, no progress can be made on getting airlines back to normal, even the 'new normal'

The future for airlines is not terribly good...at this point.

However, the path is planned, and progress has begun on navigating a path forward. Failure to progress would spell doom for all airlines. So now, watch as airlines lobby authorities to make the vaccine passport a reality.