One of the most frequently asked questions Swiss Aviation Consulting is confronted with is: “How does the war in the Ukraine affect the activity and price levels for airlines and business jet operators?”.
We are starting into a new year that is still filled with uncertainties in the middle of the much discussed Omicron wave sweeping across the winter plagued Northern hemisphere. But 2022 is also marked by strong optimism that the pandemic situation will calm down and not block the aviation specific recovery processes of last year’s second half.
Southeast Asia is slowly opening up again and cross border travelling is returning to become part of daily business activities in a steady recovery process from the COVID crisis. SAC has been monitoring the latest trends and changes very closely out of its Kuala Lumpur office and has developed its own assessment of the situation.
It looks like decreasing infection rates for COVID 19 will allow business activities in the aviation sector to grow again. In some regions, especially in the USA, brokers and operators of business jets have already been reporting very high demand and positive outlooks. Europe will follow in due time but is still facing unwanted restrictions and less overall flight activity (15-20%) with the exception of some larger domestic markets.
Corona may change a lot of patterns and business rules these months but one rule will stay valid, especially in this crisis ridden time. It is the need for change and innovation to lift proven products on a next level or even kick off new product life cycles for matching changing market requirements and the need for more efficiency. No surprise new products are strongly linked to digitization and smart devices. SAC is proud to announce that innovative software applications are now available for our clients to offer more efficient, standardized and comprehensive solutions with regards to aircraft inspections, operator audits and authoring of compliance related documents (i.e. operations manuals). For each deliverable the client may decide on the proper focus.
We have reached the last weeks of the year 2020 and even though many of us wish for some peaceful days we realize that the effects of this year’s pandemic crisis are just beginning to hit us in full force. While standard operations for the airline sector are still far from coming back to former levels after this year’s fundamental disruption due to severe national and international travel restrictions the transaction market has developed into a busy segment.
Nestled in the Northern spurs of the Swiss Alps we are curiously monitoring COVID-19 related projections for the tourist industry during the important winter months ahead. Will ski resorts open up and what will the concept for ski lifts, hotels, restaurants and entertainment look like? The possible economic loss could be historic and devastating for every mountain region, especially with regards to the crucial weeks over Christmas and New Year’s Eve. Tests, quarantine rules and travel restrictions are already existent again and will most likely stay, allowing mainly for local and domestic recreational activities only. The same effects will hit the aviation sector. Less traffic but new opportunities out of domestic mobility. The larger a country the better the chances for domestic demand and overall activity. The USA as matching example? Airlines and lessors still have to embrace a bumpy ride, strip down their fleets and implement the most cost-effective parking and interims management for their aircraft.
In aviation neither the “old” nor the “new normal” business environment has been established. It is still all about monitoring the virus, its ever changing impact on regions and their consequent reaction in terms of mobility restrictions. Mid-term planning seems to remain impossible for most market players. Short-term we need to look at trouble shooting and recognising opportunities in the post summer months. Some niche players have demonstrated their capabilities successfully and take the lead for a steady recovery. With some investigation and persistence international team working is achievable again. At the end of July, SAC was able to successfully manage the ferry flight of a Bombardier Global from East Asia to Europe in a time full of uncertainty but solutions coming up again.
The Aviation Sector worldwide knew COVID-19 would leave nasty scars but everyone was hoping for a steady recovery within the 2nd half of this year. Fact is that while Europe is trying to open up its markets the virus is still raging in some areas thereby restricting free movement and posing great risks for travelers. East-Asia, that seemed to be well ahead in fighting the virus announced to block all border crossings for foreigners until end of August (or longer) and the Americas are still stuck in the middle of a desperate fight for saving lives and recovering stability. Reason enough to take a closer look at the once promising market of Brazil.
When crisis situations slow down business life it is most important to use the available time to develop new structures and concepts and to invest into opportunities that will pay back in a post-Corona world. While the Central European countries are slowly returning to the new “normality” SAC would like to introduce what we have been working on.