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There will be no quick fix for the 'unprecedented' effect of the coronavirus on the aviation industry, according to an expert

Sharon Masige
  • Qantas is once again slashing flights because of the coronavirus outbreak.
  • Chrystal Zhang, Associate Professor of Aviation at RMIT, told Business Insider Australia the aviation industry will be affected on three fronts: the airlines, the airports, and travellers.
  • Zhang added that there is "no quick fix" for the industry when it comes to recovery.
  • Visit Business Insider Australia’s homepage for more stories.

On Tuesday, Qantas announced it's slashing flights once again, reducing capacity by almost 25%, the Sydney Morning Herald reported. These reduced flights are the equivalent of grounding 38 planes.

Qantas CEO Alan Joyce even ditched his salary for six months, with the airline also asking all Qantas and Jetstar employees to take either paid or unpaid leave because of the reduced flights.

It comes after Virgin Australia and Tigerair announced further cuts to their flights, which is expected to cost the airlines up to $75 million.

Chrystal Zhang, Associate Professor of Aviation in the School of Engineering at RMIT, told Business Insider Australia that three main elements of the aviation industry will be affected by the coronavirus: the airlines, airports, and travellers.

Zhang highlighted that airlines are cancelling or suspending flights on a massive scale, which reduces their overall capacity.

"They are literally reducing the supply side," she said. "That is on a very huge scale, which is very unprecedented."

She said that with previous events like 9/11 in the US or the SARS outbreak in China, reduced capacity of flights were usually centred around those destinations. While security measures were heightened, flights to other regions or continents were relatively normal.

But with the coronavirus, airlines like Qantas and Virgin have been cutting both domestic and international flights.

"This one is unprecedented in terms of the cancellation of the flights [and] the reduction of the capacity not only affecting the international flights to particular countries, but also within [the] domestic market," Zhang said.

And because it is unprecedented, Zhang said it's difficult to pinpoint exactly how much the coronavirus will affect the aviation industry.

"No one can tell from [an] economic perspective, how much revenue the airline will lose," she said, adding that current figures are an estimate. "It will be quite sometime before the whole industry will be able to understand...how much that is."

When it comes to the airports, Zhang explained how the coronavirus has led to added screening measures.

"All those hub airports which have international connections have to have the resources, the staff [and] the facilities available to implement those screening measures," she said. "That will severely affect airports operation in terms of achieving efficiency at the minimum cost."

The third aviation element the coronavirus will impact is from travellers' perspective. Zhang said it will affect the mindset and wellbeing of travellers as they prepare for their flights. For example, the new screening measures could lead to long wait times and uncertainty about flights.

How long will it take the aviation industry to recover?

Zhang believes it will take much longer than people anticipate for the industry to recover from the coronavirus.

"The scale of the effect of the virus is much, much larger than any other external events before that we have experienced," she said, as it is on a global scale.

"There is empirical evidence to show that every time there is an external event that affects the airline industry, the loss of the airline is much larger than the previous one. And it takes much longer time for airlines to resume the previous level of demand, service, efficiency and of course the revenue."

Zhang also said there is "no quick fix" for the aviation industry to recover, despite some people willing to take flights now because they're available and cheap.

"There is no denying that some of the guests want to take advantage of the low fares," she said. "But this fear of this virus [spreading] I think will be there for some time."

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