A new research study highlights
how “Data Analytics” will help the airline industry to face the challenges and
reopen its operations during this pandemic.
The pandemic has indeed changed the way
how businesses work. COVID-19 has posed the greatest challenge to the global
aviation industry by affecting airlines, airports, air navigation
organizations, security agencies, support services, commercial and retail
services, regulators, and customers - the entire aviation ecosystem. The
findings of a recent research study carried out by Dr. Rajee Olaganathan
highlight how the airline industry can recover from the devastating impact of
the pandemic by adopting a strategic approach incorporating data analytics
technology.
This research study found that the world passenger traffic collapsed to an unanticipated level (declined by negative 60%) in 2020, leading to a decrease in gross passenger operating revenues by USD 371 billion. The researcher used the data from the International Civil Aviation Organization database. It found that “Africa was affected severely with a negative 53.56 % decrease in air traffic, and it occupied second place next to the Middle-East region which saw a decrease in air traffic by whooping negative 57.35 %. The passenger traffic and revenues in the African region saw a major impact with negative 78 million passengers translating to a loss of USD 14 billion loss in revenue during 2020.” The research found that “the pandemic also affected the number of international passengers who traveled between different regions. It showed a severe decrease when compared with 2019 passenger numbers of the same region.”
Strategic
Approach to Analyze the Global Airline Industry
The researcher examined the Political,
Economic, Social, and Technological factors that affect the global airline
industry via PEST analysis. Based on this analysis, the researcher described
how different nations, airlines, and airports reacted to the pandemic
concerning the political, social, economic, and technological factors.
Political and economic instability, along with social inequality, represents
the main security threats to aviation operations in Africa.
The researcher stated that “most
nations were more concerned about safety as the top priority for their
citizens. So, they imposed restrictions to avoid the spread of coronavirus.
They also offered economic support to airlines that are registered in their
countries to operate within their airspace.” In 2020, a few African airlines
secured US$ 2.04 billion in government aid through direct government loans, equity
financing, and cash. Regardless of this, eight airlines in Africa filed for
bankruptcy over the past 12 months.
Agile Leadership to Safely Re-start the Airlines
The research stated that “as the pandemic continues due to the emergence of new variants, the industry needs agile leadership for its long-term success.” The African Union has taken the lead in preparing for the safe re-start of aviation in Africa through its “Saving Lives, Economies, and Livelihoods" campaign that supports collaboration between different government sectors involved in the crisis like Ministries of Health, Transport, and IT.
Resuming
Airline Operations Using Data Analytics
As the world is expecting a recovery,
like other businesses, the global airline industry also has new hopes,
expectations, and new operational challenges. The researcher highlighted that
“to resume the airline operations safely, and successfully, the industry should
embrace an integrated approach by incorporating big data analytics technology.”
The researcher recommends “tracking the COVID-19 progress and recovery at the
global and regional level, identifying the flight demand for reactivation of
different air routes, and track the demand for global air travel and customer-specific
air travel through e-commerce strategies.” Using the data analytics technology,
airlines could identify the opportunities during the pandemic and resume the
air route that would be more profitable for them in the long term.
The aviation industry stakeholders
should collaborate with third-party data providers and share the data
constantly to make this approach a success. The researcher said, “Airlines
should also invest more in digitalization to ensure that the industry emerges
from the impact of the pandemic in a more responsive, agile, and financially
sustainable way than ever before.” Moreover, the duration of global recovery is
highly uncertain as countries might reopen at different times with several
restrictions and preventive measures based on their recovery level. So,
airlines should specifically make use of data analytics technology to ensure
financial viability.
The researcher also highlighted that “to compare the recovery progress in different countries the data available through World Health Organization’s Coronavirus Dashboard can be used, and to identify the air route for reactivation, airlines can also use the Google Flight Demand Analytics tool. As these data analytics tools are available for free, even the airlines that are suffering due to pandemic and financial crisis can utilize these technologies to resume their operation.” Dr. Olaganathan said, “The greater use of data and digital technologies is essential for the recovery and resilience planning of the airline industry.”
More
Information:
The full paper – “Impact of COVID-19 on Airline Industry and
Strategic Plan for its Recovery with Special Reference to Data Analytics
Technology” was published in the Global Journal of Engineering and Technology
Advances. https://doi.org/10.30574/gjeta.2021.7.1.0050
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