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Home»Airline News»The Future of Airline Route and Capacity Planning
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The Future of Airline Route and Capacity Planning

The airline industry will wear the scars of the coronavirus pandemic for a very long time.
Joseph AlbaBy Joseph AlbaApril 9, 20201 Comment5 Mins Read
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The Future of Airline Route and Capacity Planning

Significant demand shocks aren’t new to the airline industry. In this century alone, it has weathered the storms caused by the 9/11 attacks and the 2002-04 Severe Acute Respiratory Syndrome (SARS) pandemic. But we have never before seen a shock of this magnitude affecting the entire world for what looks as if it will be a very long time.

In the midst of the current crisis, airlines and associated aviation industries are concentrating on the health issue of both their employees and their customers. Because of this, airlines have not and will not develop final route plans and aircraft deployment until the virus crisis is over. They   will eventually have to face a different future; for them and for the flying public.

The answers to the questions of capacity, routes covered, services offered and how to address these “new” needs of the flying public as well as the airlines, and is not an easy one to solve. But everyone seems to agree the big question that all else rests on is, when is this thing over?    

Industry observers who are closest to the problem are looking at a mid-2021 return to full normal.   That’s when airline planners think commercial air travel will begin to look “normal” again. This means a year after the estimated full recovery from the health crisis, our industry still has another year to return to normalcy.  

As we cover the information waterfront, airlines are in triage mode, every day we read about well-known and respected airlines pulling down thousands of daily flights from their schedules in somewhat orderly fashion as passenger numbers plummet. On April 2, the Transportation Security Administration (TSA) screened just 5% of the number of travelers that passed through checkpoints a year ago.

Ed Bastion, Delta Airline’s CEO said recently; “This is 9/11, SARS and the Great Recession all rolled into one.” 

Airline maps, like the airlines themselves, will come out the crisis smaller and leaner than when they went in. It will be a hard reset, so to speak, with each carrier really reevaluating what works and what does not in their networks. Networks formed largely by stapling together the maps of six different carriers into today’s “Big 3” U.S. airlines.

 “We’re going to be smaller coming out of this. Certainly quite a bit smaller than when we went into it, and we’ll have the opportunity to grow,” Delta Chief Financial Officer Paul Jacobson told employees on March 19. The sentiment is shared by others in the industry.

The $2 trillion CARES Act aid package includes strings to ensure airlines maintain connectivity across the country. To receive the aid, carriers must keep serving all of the destinations they served as of March 1, though they are allowed to pare back schedules to as little as one daily flight to any city they previously served daily. That’s one daily flight per destination, not per route.

Another point not covered in depth and rarely addressed is what aircraft changes are in store when customers look at schedules and type of aircraft? Will the airlines first use their mid-size single aisle equipment before they invest in the larger fuel burners? And what happens to the airlines that are heavily vested in the big jets? This is especially true of the long-haul carriers. 

The questions never end. Use of hubs or point to point, carry-over of safety and health precautions, rules about engines running at the gate – will they be deferred as they are doing now to ensure air is constantly circulated on the aircraft after it lands. 

One of the few promising outcomes of this crisis is the possibility of resolution of unfair competitive practices carried on by foreign airlines. As John Fund wrote in March National Review; “U.S. carriers have long believed that foreign competitors — especially from Middle Eastern carriers — have violated the letter and spirit of the Open Skies agreement, which regulates which airlines get to fly to another country’s airports. The goal of Open Skies is to benefit consumers by providing open entry.” 

U.S. senators across the political spectrum, from Democratic senator Bob Menendez of New Jersey to Republican senator Ted Cruz of Texas, have said that the subsidies for Middle Eastern carriers are costing U.S. jobs. They point to studies showing that more than 1,500 jobs are lost for every daily international aviation route lost to unfair subsidies.

Airline people smarter than I will have to think of each of these variables and address all of them before our industry is back to normal.

Last but not least, it’s not only the airlines. Airports, aircraft manufacturers and air navigation service providers will also find themselves under financial stress as demand evaporates.

The Covid-19 pandemic will stress-test the entire civil aviation industry, and when it is over – at least in the first months and maybe for years – the travelling public will return to an industry that has changed.

And that is why the summer of 2021 is not unrealistic at all. 

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Joseph Alba
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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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