Global Advisory Firm States the Aviation Industry Will Face a “Covid Overhang” Followed by a “New Normal”

Alton Aviation Consultancy, a global advisory firm focusing on the aviation and aerospace industries, has coined the phrase “Covid Overhang” for the next period of recovery for airlines, airports, ground handlers, aircraft lessors, manufacturers and MRO providers. This period, it says will be followed by a “New Normal.” The Covid Overhang period, which Alton projects will last between 18-24 months, will include the resuming of operations and, depending on how well organizations perform during this period, will set the stage for how they will be positioned to advance in the New Normal.

In its report titled, “Covid-19: Implications for the commercial aviation industry,” Alton highlighted those factors that industry stakeholders must effectively manage during the Covid Overhang period. They include:

  • Health and safety for employees and passengers
  • Capturing demand in a reduced market
  • Cash flow control and resource re-allocation
  • Continuity planning and ability to address uncertainties
  • Restructuring alternatives and preparation for the New Normal

The advisory firm also outlined some recommended directives for advancing during the Covid Overhand period and in advance of the New Normal. Chief among them was to design various recovery scenarios and responses to those scenarios comprised of “no-regret moves,” as well as “big strategic moves” that require advance planning. An example it gave for a no-regret move was capacity rationalization and it cited spin-offs as potential big strategic moves. In this stage, Alton suggests that organizations identify triggers (e.g., competitors’ actions and resumed operations) that would “activate” interventions. It also recommended establishing a task force charged with developing tracking mechanisms and dashboards. Agile decision making and rapid “test and learn” approaches too it suggests should be adopted.

Going forward, Alton states that airlines will require specific rules for route re-opening and scheduling based on the insights their market intelligence task forces can provide. Additionally, as stated by the Alton report author, Adam Cowburn, “The surest way out of the crisis is for every player across the aviation value chain to work in tandem with governments and other stakeholders to put airlines back in the air and get revenues flowing again.”

To access the full report, visit: https://altonaviation.com/wp-content/uploads/2020/06/Alton-2020-Covid-19-Implications-for-the-Commercial-Aviation-Industry.pdf

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