How Aviation Industry Overcame Past Crises

We know that COVID-19 is not the first crisis to hit the aviation industry. Several incidents like war, recessions and natural disasters have shaken the industry in the past.

But air passenger traffic has always seemed to bounce back strongly from short-term upheavals. The aviation industry has proved its resilience and ability to learn lessons from crises multiple times before. Let’s take a look at how the industry responded to such incidents in the past.

Oil Crisis of 1970s

The oil shocks of the 1970s were caused by two conflicts in the Middle East. As a result, countries, mainly in the West, suffered huge shortages of fuel. During the time, oil price increased by 400% and oil production decreased by 240%, according to ICAO.

Crisis Response

Airlines started to explore ways to become more fuel efficient. One of the measures was to reduce the weight of the aircraft. Around that time, aviation facilitated the development of flight management systems that automatically calculated the optimal speed and power engine settings based on altitude, wind, and other factors to reduce fuel consumption. Flying distances and air traffic delays were reduced. One of the most significant shifts was that aircraft manufacturers replaced wood and fabric with lightweight aluminum in airframe constructions.

The Persian Gulf War

The 1990-1991 Persian Gulf War caused another oil price shock, with a peak of $46 per barrel. This dealt a double-blow to the air travel industry due to the 1990s recession.

Crisis Response

The travel industry including the airlines explored lesser known destinations like Chile, Sri Lanka, the Seychelles, Vietnam, New Zealand, and Portugal. This also led to the emergence of more short haul flights, which became popular as people started to avoid war-prone areas.

The 9/11

The 9/11 attack on the World Trade Center in 2001 triggered an unprecedented fear of flying. This led to huge losses to American and European airlines. In a 2006 briefing, the IATA said 9/11 reduced travel demand by more than 31% in the five months following the attacks. It took about six years for airlines to recover capacity.

Crisis Response

Airport security was tightened to reinstate passenger confidence and ward off fear and anxiety about flying. The Transportation Security Administration came into existence in the US, which introduced several new security measures inside airports.

The 2003 SARS outbreak

The outbreak of SARS in 2003 became a classic example of how panic can live longer than the virus. Unlike COVID-19, SARS was brought under control quickly. But it took nine months for air traffic numbers to recover to pre-SARS level.

Crisis Response

Airlines intensified their sanitization and disinfection procedures after the SARS outbreak. Governments and global agencies like WHO issued guidelines and protocols for crew, passengers and aircraft cleaning. After the outbreak was brought under control, these measures made air travel safer and helped to restore faith.

2008 Global Recession

Economic crisis of 2008 proved to be more severe than that of 2001/2003. During the recession, the fuel prices rose dramatically which affected the profitability of the Airlines. It also led to a huge decline in the demand for air travel.

Crisis Response

Airlines minimized their operating costs and expenses. They also reduced their capacity in the short run. Recovery from the downturn started in 2010, according to data provided by the WEF. The number of outbound travellers from emerging markets increased exponentially. Travel booking shifted to online. The recovery was also accompanied by a travel startup boom.

This too, shall pass

The pandemic is not over yet, and the impact is still unfolding. The industry has historically been able to adapt its operations and business models to new challenges and external shocks. This too, shall pass. We are sure that aviation will find a way to overcome this crisis too, like in the past.

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