There is an expectation mostly driven by hope – which we all
know is not a strategy – that the current global lockdown is temporary and
that we will emerge on the other side stronger, better and, well, normal.
That is not the case. I hope that somehow, I will end up
eating these words, but I don’t believe so. We – yes all of us – will have to
go through a cycle of pain. How we manage the quantitative aspects of this
crisis will depend on what our future looks like. I have therefore prepared a
chart of the seven stages we must pass through.
Here are the seven stages.
Stage 1 – Denial: December 2019–January 2020
When first reports of the Wuhan virus emerged, there was a
clear expectation that it would be contained just like SARS and H1N1 before it.
The mechanisms worked well then – it’s a Chinese problem they must deal with
it. No cancellations or refunds permitted – it’s flu for heaven sake.
mission is to ignore the problem and wish it away. China admits it has a
problem. Cases start to seep out of China particularly during the Lunar New
Stage 2 – OMG/panic: February to late-March 2020
When the traffic bookings start to fall off and the
cancellations start flooding in, panic starts. Slash schedules and costs. First
line of defense? Don’t panic.
That lasts for only a short time. Borders close,
cases mount – death tolls soars. Airlines start pulling in credit lines and
setting up new ones. Appeals start to the governments for help.
As cases mount
– “free changes now become the norm.” Appeals for massive immediate bailouts
are appearing every day. Doomsday scenarios start to appear. Mass layoffs
start. Airlines go full-speed to stop.
There are no cures, but way worse there
are not enough medical resources. Testing is still not happening on any
wide scale. We learn new terms: ventilators, social distancing, gaslighting. New
heroes emerge – medical professionals, yes even grocery workers. The economy of
just about every nation simply shuts down.
Stage 3 – Repatriation and all-ahead stop: End of March
We accept the situation. Layoffs are universal. Airlines are
too big to fail (or so they tell their governments).
The mission is now – get
people home. Acting as an instrument of government, the airlines are now in the
business of repatriation.
more than three months since the virus first appeared, there is still no safe
flying. Many travel industry workers start to get sick (like the rest of the
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Country borders get locked down tight. The focus is all about
reducing the curve. Isolation becomes universal worldwide. Death tolls mounts.
Projections of deaths are now into seven figures.
The United States is saying that deaths
in the 50 states will be between 100,000 to 200,000; however, with a caveat that they
could be as high as two million. Cases will escalate to eight or even nine
figures. Second-wave infections grow. Stimulus packages abound. Travel agents
get in on the act with others who have their noses in the government handouts
Stage 4 – Reset/anger, essential travel only: April and May
It’s all quiet not just on the Western front but just about
everywhere. With the airlines in shutdown, what started as a creeping delay is
moved to more permanent mothballing of the fleets.
Reality sets in that the
economic model of the airline is not as robust as has existed since
deregulation. All sectors are off and all similarly impacted. The
overabundance of aircraft orders comes to a crashing halt. The reset period
must be lengthy to bring back an essential part of human interaction and
Airlines will only be permitted to fly essential routes. Traffic will
be approximately 10 to 20% of normal with many airlines not emerging from the
shutdown. Airline bailouts will moderate in the face of other sectors of the
economy which will be more deserving.
Environmental benefits from reduced
transportation will emerge. Governments will pressure the World Health Organization to develop a standard
for when borders can open.
Stage 5 – Safe flight/regulation: June–September 2020
There will need to be a complete rethink of security and
protocols for flying. Government and the traveling public will demand a “Safe
Universal testing of all workers and passengers will be
mandatory, and introducing it will be problematic and costly. Until a low-cost
instant test (sub-5 minutes) is widely distributed and available, all travel
will remain constrained.
buffer zones around airports will be required. Better for some than others. New
seasons' virus mutation will have the population in high-tension mode. Constraint
will remain in place. Vaccinations on a mass scale will start; effectiveness
against COVID-19 will be mixed.
The next variation of the virus will cause
concern. Traffic will drop again in late-September as the world watches for the
next variant of the virus and the third and greater waves of infection.
Stage 6 – Recovery: October 2020–June 2021
The economy will limp along, stubbornly not responding to
any stimulus. Major projects for airports will be abandoned. Airframe original equipment manufacturers (OEMs) will
become massively reduced. Capacity, particularly in runways, will be freed up
that was previously constrained.
Careful reuse of assets will emerge.
Governments will be required to ration out flights and/or encourage route
swapping. Profligate competition will cease. Cooperation becomes the new
normal. Interlining – intercarrier connections become popular again.
Traditional alliances and joint ventures fall away in the face of need for
reach over everything.
The speed with which safe flight is implemented will
determine the speed with which we get to stage six. The effectiveness or the
early deployment will determine how long we stay at at stage six.
confidence will only return with a government largesse program to encourage
people to travel again of all forms. Legacy infrastructure will fall away – for
example some high-cost mechanisms such as IATA and global distribution systems.
Stage 7 – The new normal: July 2021 and onwards
Within three years we will be only about 75% of capacity of
2019. This will depend on the success of the testing regimes and how effective
the airport safe buffer zones are.
Realization of new habits and changed
behavior that occurred during the isolation. The Zoom effect – moving even more
to an all-digital world will mean greater use of video conferencing, which will
severely impact one-to-one travel. Webinar growth will reduce convention/meetings
Certified safe places such as regulated hotels will become popular and
home rentals without safe ratings will fall away. Airbnb will struggle. Hotels
will have a new normal of much lower occupancy. Staying with family will become
popular as will shorter business trips.
The level of travel will become pegged
to the economic health of any country. Some barriers to borders will remain in
place long after the health issues are resolved.
This new normal will ultimately be kinder and gentler,
potentially. Much will depend on the political atmosphere. Xenophobia and a
genuine feeling of anger will need to be channeled towards a supposed bad guy.
Whether the citizenry of the major countries is prepared to feel charitable to
their neighbors or take a hostile “it’s all your fault” approach – that becomes a
* This article originally appeared on WebinTravel
About the author...
Timothy O'Neil-Dunne is an principal at 777 Partners
. He gratefully acknowledges the contributions of colleagues, acquaintances and friends to the development of this article.