May 30, 2020 TnH Global

COVID-19 likely to shrink global tourist flow by upto 78%

COVID-19 may potentially shrink the global tourist flow by up to 78 per cent, as the aviation sector faces the worst ever crisis in its history since World War II. These were discussed during the Bird Group Initiative Webinar held recently.

Suman Billa, Director, UNWTO, said the current pandemic might contract the global tourist flow by up to a staggering 78 per cent. The tourism flow contracted by 0.4 per cent and 4 per cent during SARS and 2008 economic slowdown, respectively.

“This is clearly a huge challenge for businesses to overcome. The governments are equally challenged in the absence of revenue flows and limitations on deficit financing. Most of the stimulus packages across the world are sector agnostic. The industry should carefully assess the existing provisions and propose the changes that are specifically required for the tourism sector” he pointed out.

Calibrated opening of the aviation sector, strict alignment of standard operating procedures with the resumption of airline services, key sops to infuse life into all the aviation verticals, which employs a large chunk of the industry are some of the major steps discussed by aviation industry captains here recently.

Dr Ankur Bhatia, Executive Director, Bird Group said, “Today we are in the grip of an unprecedented situation. We have no experience in tackling such pandemic induced economic concerns in an industry like aviation. It is an evolving situation, with conditions changing every day. The sector has to be opened up gradually and in a calibrated manner. A limited number of flights have been announced. Though the move will not earn the kind of revenue airlines need to stay afloat. But, a start has been made. Now the focus should be on a phased escalation of flights in alignment with the SOPs passed by the ministry. International travel will also take cues from experience in domestic travel. It also has to open up as that will infuse more lifeblood into the succumbing airlines.”

Mr Murali Ramachandran – President, Ground Handler’s Association, expressed his concern over the crippling effect the pandemic has dealt to industry riven with high fixed costs of labour. “The Government must definitely review the regulatory mindset and environment given the current situation. No revenue, no fiscal support and a highly regulated environment is a devastating cocktail for any industry. Some structural issues that lead to a higher cost base must be reviewed like airport bids, concession framework etc,” he said.

Mr Arun Mishra – Regional Director, Asia and Pacific, ICAO said that there was a serious impact of COVID 19 on airlines, airports and industries associated with air transport. “Government support for the revival of the aviation industry is critical especially in view of the fact that aviation is a key driver of the economy generating 65.5 million jobs worldwide. However, when we are looking at support for revival and recovery the sector as a whole needs to be considered. ICAO’s focus at present is to work with Governments and Industry to develop harmonized guidelines and tools which are universally accepted and applied for early recovery from this pandemic” Mr Mishra said.

Talking about the COVID impact on international travel, Shefali Juneja, ICAO India Representative said “Confidence building amongst the travellers shall be crucial to kick off the international travel. There is a dire need to streamline procedures and protocols which are internationally accepted and hence making it easy and comfortable for the travellers to travel.”

Mr Narayan Rao, Group Deputy MD, GMR, also urged the government to ensure the blue-collar workers, as well as the migrant labour, are not rendered unemployment that fills more than half of the workforce employed by airlines, airports and other aviation ancillary services.

Delhi based travel conglomerate Bird Group in collaboration with PHD Chamber of Commerce & Industry held the second webinar amongst a series on- ‘Saving Airlines & Allied Industries – Saving Jobs’.

During the webinar key measures that have been taken by the governments worldwide to support and sustain the aviation and tourism industries were discussed. Eminent leaders from the industry brainstormed on ways and means by which the industry can continue to remain viable and once again bring the attention of the government to these pertinent questions.

The panel included senior members from international organizations and the aviation industry in India including key stakeholders. The panel also deliberated upon the expectations submitted earlier to the government, which could not find a place in the set of measures announced by the government.