The Power of a Global Pandemic: Air Travel Edition
2020-2021 will be an era that goes down in history. The tandem of years are permanently engrained in the minds of humans worldwide as an unprecedented moment in time due to the brute force impact of COVID-19.
Today, we are going to dive deep into flight data from Q4 2019 into Q1 2021. Visualization of this data will allow for the comparison of commercial aviation versus cargo to assess any patterns or relationships between the two types of freight being flown across international skies.
Before undertaking this case study, I hypothesized that if passenger air travel suffers a significant decline to dangerously low levels of operation, then cargo would be inversely effected because COVID-19 will promote a rise in e-commerce. Consumers aren’t traveling for leisure and are therefore spending their hard earned money elsewhere (online shopping, etc.) instead of venturing out to in-person stores and malls risking exposure to the virus.
The visualization above, obtained from Carmen Ang of Visual Capitalist, showcases flight data amid the pandemic. It is important to note that RPK (revenue per kilometer) is an airline metric that manifests the number of kilometers traveled by paying passengers. RPKs are calculated as the number of revenue passengers multiplied by the total distance traveled. Since RPK measures the actual demand for air transport, it is often referred to as airline “traffic.”
In mid-March 2020, there was a dramatic drop in passenger air travel worldwide due to the spread of COVID-19. Cargo, on the other hand, also sustained a dip at the same time which was nearly 3x less than commercial. The blows were more heavy to passenger travel as opposed to cargo because of the initiation of lockdowns and bans restricting international travel across the globe. All airlines are expected to report losses once again in the first quarter of 2021, after a combined $32 billion in losses in 2020.
There must be something we can learn from enduring such a monumental experience, right? It appears that the pandemic has paved way for a “new normal” which includes lifestyle concepts such as remote work environments and an expansion in online shopping leading to the revolution in e-commerce. The decline in cargo flights wasn’t what one expected to see because of the strides retailers such as Amazon and Walmart were making in preparation for such a pandemic. However, companies need time to pivot as do airline carriers such as American and Emirates. There is bound to be lag time associated with making drastic changes in a business model, so it will be imperative that companies account for that going forward. Additionally, airline operators may find it in their best interest to incentivize fliers to return with the implementation of new loyalty programs. The rolling out of incentives and persuasive marketing deployments would sway reluctant travelers enough to increase the rate at which the market returns to normal levels.
The difference in the impact of international flights as opposed to those flying domestically lends itself to the disparity in virus protocols. International travel is governed by the cooperation of nations in an effort to slow spread and infection of COVID-19.
Looking into the future, E-commerce giants will be faced with increasing competition, which will likely cause cargo flights to surpass 2019 levels rather quickly because the “new normal” is here to stay. Passenger travel is also expected to return to normal rates albeit slower than cargo. An uptick in holiday travel can be projected as loved ones seek to reconnect with one another upon COVID-19 reaching effective levels of containment.
Industries can be very volatile in nature and the airline sector has shown to be one of them. The use of a data analytics process can highlight volatility in ways that will allow for decisions that can better protect key stakeholders in the environment.
