The impact of COVID-19 pandemic on commercial aviation activity in Australia

The aviation industry following the COVID-19 pandemic is one that is drastically different from that in the past. COVID-19 has drastically affected the airline industry by reducing air travel demand and creating a challenging environment for all air operators around the world. (OECD 2020). The aviation industry offered 50% fewer seats and carried 2.7 billion fewer passengers and airlines lost $370 million in gross passenger operating revenues in 2020 (ICAO). Many airlines have retreated from bold expansion plans while others have folded entirely because of the unprecedented trading conditions experienced. The purpose of this research was to analyze the impact of COVID-19 on both international and domestic air transport traffic and airline operations in Australia. Also, the authors explored the possible action to make Australian aviation back to normal to the most extent. The main steps of covid recovery plan were identified using comparison analysis, PESTE analysis, the Herfindahl-Hirschman Index (HHI), and the CR4 index. Based on the analysis, the cost of politics and Governments' decisions led to a decline in revenues equal to almost 4000$ million and a reduction in profit of 91% compared to 2019 for the aviation industry in Australia. As a result, it was identified that Qantas Airways sells a premium service and utilizes many marketing tools to gain a competitive advantage in real-time. Qantas had to change its marketing strategy and focus on the domestic market during COVID-19 (20 new routes). The HHI and CR4 illustrated that Qantas is a key player in Australia and the airline with the highest market share in the country. There is the need to be flexible and adjust to the shift in customer demand by opening new domestic routes that could bring the airline some cash flow. This has been identified as a pivotal component for survival, as airlines in Australia are asset-intensive and heavily leveraged. The COVID-19 pandemic has created an extremely unstable market for the aviation industry in Australia, resulting in significant job losses, long-term parking for large aircraft fleets, and airline failure (Tiger Airways), but it has also created opportunities for airlines to prosper in the future.

Keywords: aviation, airline, COVID-19, Australia, domestic market, competition.