Aviation Sector Becomes Collateral Damage As Service Sector Struggles

Pandemic Deals Business a New Body Blow With Second Round of Infections

According to the charts prepared by Statista in their latest analysis, it would appear that the transport industry is not doing too badly. But the chart is not telling the full story. The collapse of employment in the service industry’s is spectacular. Perhaps a more descriptive word is disastrous. And it is the service industry that puts people on airplanes and it is the service industry that welcomes them once they are at their travel destination. So, the service industry is the feeder system into the transport industry and the end-point by which travelers, both business and personal measure the value of their trip. When the front end is broken, the airline business also suffers.

The COVID-19 pandemic began its’ spread into the United States earlier this year. With our usual optimism, U.S. business and the man on the street were looking for a quick solution and end to the problem. But the reality of the impact of the pandemic slowly became obvious. 

Adding to the confusion, at the beginning of the viral transfer from China to the rest of the world was misinformation coming from global agencies that world leaders trust for guidelines. For example, WHO stated in a press release** in late January 2020 that the virus was not transferable from human to human. This statement, along with other presumptive remarks made by health experts, misled global government leaders in thinking all was well. No one will ever know that if these late January announcements were accurate, and about the severity and the ease of infection of this virus; how the ensuing actions could have reduced the number of deaths across the globe. 

The economy has been sputtering the last few months. When it appears that we are finally on the down-hill side of the problem, we are suddenly faced with a new challenge. Economic indicators have plummeted, erasing millions of jobs in a matter of weeks. Many had hoped that this crisis would go away as quickly as it had arrived. And while some sectors recovered relatively quickly once restrictions had been eased and businesses were allowed to reopen, we are now eight months into this crisis and the U.S. labor market is still 10 million jobs short of its pre-pandemic level.

Economists tell us that the last item of economic data to recover from instability is jobs. This is because employers need to have assurance that business volumes will continue to improve which in the future will cover the cost of new employees. This explains why the vaccine news gave a boost to the stock market, but the job numbers remain stagnant. 

As the following chart shows, the vast majority of those lost jobs are service-providing jobs, with the leisure and hospitality sector alone accounting for 3.5 million of the total 9.1 million lost service sector jobs. With new COVID-19 cases currently surging across the nation, it seems unlikely that a significant portion of those jobs will be recovered by the end of the year. And with more than 12 million Americans currently relying on unemployment aid through emergency programs due to expire at the end of December, the worst may be yet to come for those who lost their jobs during the pandemic. 

The introduction of vaccines – the count is now three companies ready to distribute soon -may be the savings grace. Service businesses are aching to get back to normal, but their partnership with government is now strained to the limit. They see double-standards. A politician can throw a party with 25 guests into the wee hours of the morning, but a bar in New Jersey now has to close at 10PM. They also see conflicting guidelines between various states and levels of government in the states. Many service companies including hotels, restaurants and bars have complained that the closings and draconian regulations are a product of politics, not health. 

The successful development and testing of the vaccines is step one, we still have a long way to go. There is a plan in place with a tiered distribution network announced by the White House. There are estimates that by March and April, most tier group vaccinations will either be completed or nearly completed. 

Meanwhile we all wait for some semblance of normalcy in both our personal lives as well as our occupations.

Mr. Alba was previously Editor of the Airport Press for 12 years covering both local as well as global aviation news. Prior to this, Mr. Alba had Executive positions in Systems Engineering and Marketing with IBM World Trade, and had foreign assignments in the Far East and Latin America earning three Outstanding Achievement Awards. Mr. Alba also directed a new function dealing with Alternate Fuels for Public Service Electric & Gas company in New Jersey and founded a Natural Gas Vehicle Consortium consisting of car company executives and fleet owners, and NGV suppliers in New Jersey. Mr. Alba was a founding partner of ATA, an IT Consulting company which is still active in Central and South America. After leaving the armed forces, Mr. Alba’s initial employee was the U.S. Defense Department as an analyst.


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