ABOUT a year ago, McKinsey & Company, a management consulting firm, said it was difficult to overstate just how much the Covid-19 pandemic had devastated airlines.
This was when aviation industry revenues dipped to US$328 billion in 2020 or less by 40 per cent of that of 2019 and similar to that of 2000. And the consultants opined that the aviation sector is expected to be smaller for years to come and that traffic won't return to 2019 levels before 2024.
But things are looking up. For example, the United Nations-run International Civil Aviation Organisation said the overall reduction of seats offered by airlines this year would be between 19 and 22 per cent of seats offered in 2019 and compared to 40 per cent in 2021 and 50 per cent in 2020. And that the loss of gross passenger revenue of airlines would not be as bad too, dipping to only US$169 billion to US$191 billion this year compared to US$372 billion in 2021.
Similarly, the drop in the number of passengers would be between 25 and 29 per cent this year compared with 60 per cent in 2020 and 49 per cent in 2021.
Demand for flight tickets is now on the increase as a result of pent-up demand arising from the lifting of travel restrictions. Industry insiders say that the desire for air travel is coming back more aggressively than anticipated.
Adobe Analytics' Digital Economy Index, which tracks what people are buying in the digital world in the US, UK, and Japan, reported that travellers from these countries spent US$8.8 billion for online flight bookings in March 2022, or 28 per cent higher than the same period of 2019.
What does that tell us? Demand for air travel is coming back and what can scuttle this upsurge are higher ticket prices as a result of poor seat capacity and higher fuel costs. This scenario was panned out locally last month until the government had to intervene.
Another timely government intervention was investigating into flight delays and rescheduling where many air travellers got a raw deal. It's commendable that regulators are wielding the big stick on airlines that took travellers for granted.
Despite reports of two more local airlines joining in the fray coupled with moves to get grounded aircraft to re-enter service, one seasoned aviator believes that not all avenues had been pursued to jump-start the industry.
Captain Azlan Zainal Abidin, a strong proponent of operating lean and mean through a "wet lease" or an arrangement where the aircraft, crew, maintenance and insurance (ACMI) is handled by the operator, said "wet leases" are viable and innovative alternatives under the present scenario.
Azlan also believes he could put the country's idle aircraft into better and immediate use for both passengers and cargo through "wet leases" and start earning revenue for them besides giving local air travellers a better deal from lower operating costs.
He once successfully ran Eagle Express, a smallish airline that operated chartered haj and umrah flights between 2011 and mid-2016. But he hit turbulence Q3 2016 when the rules of the game were changed as the authorities stipulated that his airline's paid-up capital needed to go up by 10 times!
On Boxing Day of 2016, Azlan was boxed in when his Air Service Permit (ASP) was revoked because he could not come up with the funding within three months!
Azlan explained that airlines operating "wet leases" were not cash-rich, unlike those that could sell advanced ticket bookings. Revenue for chartered airlines came from travel agents. Before the end of 2017, Azlan lost about RM300 million as he was without an ASP required to lease aircraft to stay in business.
Azlan feels that he deserves a second chance as he pinpoints his setback not on his professional incompetence but more of misjudgement on certain partners and senior staff whom he had trusted while he was busy flying planes in the air.
He hopes that regulators would have an open mind and consider his proposal to bounce back through the ACMI route. Azlan's unflinching optimism is a cause for admiration as many would have crumbled following the run of bad luck and regulatory obstacles.
What former American president Dwight D. Eisenhower said about government assistance despite alluding to farming applies aptly to Azlan's fervour to succeed again in aviation: "The proper role of government, however, is that of partner with the farmer -- never his master. By every possible means we must develop and promote that partnership." In other words, the role of government is to facilitate, not frustrate.
* The writer is a former Bernama chief executive officer and editor-in-chief
