COVID-19 Pandemic: Observations on the ongoing recovery of the aviation industry
What the GAO found
The COVID-19 pandemic has severely affected the aviation and aerospace sectors that rely on commercial passenger travel. As demand for air travel fell and remained weak throughout 2020, the effects rippled through all sectors, including US passenger airlines, airports, aircraft manufacturers and repair station operators. . For example, in response to lower demand, airlines parked or retired a significant portion of their aircraft fleet, which in turn reduced demand for aircraft maintenance services.
Aircraft temporarily stored at Denver International Airport in 2020
In response to the effects of the pandemic, aviation stakeholders indicated that they had acted quickly to mitigate financial losses and position themselves to maintain the viability of the business until demand increases. Stakeholder actions included:
- manage costs, for example by setting up early retirement schemes;
- raise funds in the private market to increase liquidity; and
- take steps to mitigate the spread of COVID-19 among employees and customers.
Stakeholders also noted the significance of the more than $100 billion in payroll support payments, loans and other financial assistance provided through the COVID-19 relief legislation.
The Federal Aviation Administration (FAA) said it took quick action to help the aviation industry adjust its operations in response to the pandemic. These actions included temporarily alleviating certain regulatory requirements, such as medical certifications for airline crew members, and issuing guidance to airlines and airports on COVID-19 risk mitigation. The FAA has removed many of these relief measures.
Although airlines saw a rebound in US leisure travel demand in 2021, operational challenges and concerns over the COVID-19 Delta variant have slowed the recovery. Forecasts suggest that the industry’s recovery will be uneven, as business travel and international air travel – the most profitable segments – are likely to lag behind. Stakeholders identified areas of concern for policy makers to consider, such as strengthening aviation workforce pipelines, as they determine how or whether to continue to support the industry in changing market conditions. In addition, the development of a National Aviation Communicable Disease Preparedness Plan, as recommended by the GAO, would ensure better coordination among federal and industry stakeholders and help better prepare the United States for future pandemics.
Why GAO Did This Study
International flight restrictions, local stay-at-home orders, and general fear of contracting and spreading COVID-19 through air travel have had a sudden and profound effect on the U.S. aviation industry. According to Department of Transportation (DOT) statistics, passenger traffic in April 2020 was 96% lower systemwide than April 2019, and remained 60% lower than 2019 traffic levels throughout. throughout 2020.
This report examines (1) the immediate effects of the COVID-19 pandemic on businesses in the aviation industry; (2) the actions these companies have taken in response; (3) actions taken by the FAA to assist industry in responding to the pandemic; and (4) the industry’s recovery prospects, among other issues.
The GAO reviewed operational and financial data for DOT airlines for calendar years 2019 through 2020, financial statements for various aviation-related businesses, FAA operational regulations and guidelines, and forecasts for the recovery of the airline. industry. GAO conducted a generalizable survey of 1,136 small airports. The GAO also interviewed FAA officials and representatives of a judgmental sample of 47 aviation and aerospace industry stakeholders selected based on their location and industry sector.
