The aviation industry in the midst of COVID-19 and its aftermath

The aviation industry has experienced a spiral of technological advancements over the past few decades. It has responded to the new wave of technology by following the demands and expectations of the modern world. But is he prepared for the current global coronavirus COVID-19 crisis? Well, there is no fixed answer. Currently, the country’s aviation industry is in the grip of a crisis. Alexandre de Juniac, CEO of IATA in his recent press release addressed the impacts of the spread of the coronavirus on the aviation industry.[1] The spread of COVID-19 has forced many countries to impose travel restrictions that have crippled the aviation sector.

Wise and swift action in restricting many flights from worst-hit areas like Singapore and China has helped the Indian industry somewhat to keep its head just above water. This action was even before COVID-19 was declared a pandemic by the World Health Organization (“WHO”). Countries like Australia and New Zealand have also reported declining revenue and footfall in the aviation sector. This is not a happy scenario for employees working in the aviation sector. The airlines are not to blame for the outbreak, but they are definitely facing force and will likely have to pay a heavy price to restore business.

Aviation industry: call for help

With the cancellation of almost 600 international flights and 93 Indian international flights, the Indian aviation sector is in desperate need of help. Incomes are plummeting due to travel restrictions and people are afraid of spending hours in isolation. A proposal to increase parking, landing and airport charges has been sent to the Minister of Finance. The industry also demanded a reduction in jet fuel royalties. Recently, in order to cope with such financial stress, Indigo decided to reduce the salary of all employees due to the COVID-19 outbreak. According to CAPA (Centre for Asia Pacific Aviation India)”With new advisories and restrictions being announced daily, along with the Indian government urging people to avoid non-essential travel, demand is expected to weaken significantly, with a drop of 40-50% or possibly even more. in the short term, as seen in other markets.” In addition, WHO has advised against the application of travel or trade restrictions in affected areas or countries that may be affected by such travel during the outbreak.

Cancellation and refund

Whether an airline can dismiss claims resulting from canceled flights amid the pandemic depends entirely on the precautionary measures it has taken to contain the spread and its ability to demonstrate this. Further, it was ordered by Central Government Vacancy Order dated March 23, 2020, reference number – AV/11011/1/2020-US(AG)Office-MOCA[2]under section 8B(1) of the Aircraft Act 1934 (XXII of 1934), that the operation of all scheduled domestic flights, except all cargo flights, by any operator of aircraft will cease to operate effective March 24, 2020.

In addition, the senior DGCA official asked airlines to consider the option of cancellation and reimbursement of the consideration paid when booking flights without charging cancellation fees for them. As a result, many national carriers have announced various such measures for the cancellation and postponement of flights instead of government-imposed travel restrictions.

In Europe, EU261[3] provides that an airline is exempt from reimbursement of any cancellation if caused by “extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken”. Therefore, it is important to consider banning travel to affected areas or denying passengers from affected areas as a preventive measure to control the spread. In addition, airlines are asked to take this extraordinary situation into account and avoid charging cancellation fees. passengers.

Can insurance save the day?

Reasonable restrictions during this time of need by aviation authorities regarding travel restrictions, flight cancellations, lockdowns and quarantine zones imply that aviation may be one of the hardest hit sectors due to this pandemic. Although current policies in India do not cover the current crisis, CAIT has requested the Minister of Finance to advise IRDA to mandate insurers in India to introduce insurance cover for business interruption due to coronavirus . None of the current policies in India compensate for losses that arise due to disruptions in business operations due to the coronavirus.

However, passengers who have taken out travel insurance that protects them against unforeseen events will be covered due to the sudden epidemic, and according to the insurance policy, it will mainly cover travel reimbursements and not hotel reservations in general.

Responsibility of the airline industry

The risk of a contagious disease spreading on an airplane while traveling is high. Airlines must comply with national and international health legislation[4] as well as the laws of their countries of operation. If passengers who appear ill are ignored, they may face penalties. The impact of this epidemic on the population will be such that they will feel the pressure to survive this imposition of restriction on their right to travel. Does this imply liability on the part of the airlines? The contract of carriage is concluded once the passenger has purchased the ticket to travel and has been accepted on board for the journey. Under Article 17 of the Warsaw Convention 1929 and Article 17 of the Montreal Convention 1999, a carrier is liable when a passenger dies, is injured or suffers bodily harm on board the aircraft. In both of these conventions, bodily harm means physical injury, sickness, and disease. Therefore, airlines must support passengers traveling under the contract of carriage. But this duty of care is limited to infections that may be caused to passengers due to improper cleaning or disinfection of aircraft or negligence of aviation authorities in the performance of their duties. This imposes no liability on the airlines for infections that are spread directly from other passengers, unless it is proven that there were indications that the passenger was ill and that this was foreseeable by the airline personnel and despite this, they granted him permission to travel which leads to the spread of the disease.

The COVID 19 outbreak would likely constitute unusual circumstances, as it is a very serious global public health emergency that has resulted in drastic public measures that are completely beyond the control of aviation authorities in order to predict or avoid any type of contraction or spread. . However, whether an airline will be able to reject claims resulting from the spread of this contagious disease depends on the airline’s ability to indicate that it took all reasonable precautions to avoid the contraction.

Conclusion

Airlines are making extra efforts to ensure proper disinfection and fumigation of airport terminals as well as disinfection of aircraft. However, despite taking such precautionary measures, it is still difficult to deal with the fear instilled in the minds of passengers which, in turn, affects the overall activity of the aviation industry. In addition to this, in order to control the spread of this deadliest disease, the government has restricted all international flights to land in India. This will lead to loss of income and financial stress. We recommend everyone to tighten their seat belt and be prepared for a very bumpy ride.