Airlines could shed 95 per cent of their workforce if coronavirus border closures remain, aviation economist warns
The aviation industry could lose 95 per cent of its workforce if borders are not opened soon, a leading analyst has warned.
Prior to the coronavirus pandemic, Qantas and Virgin Australia employed the equivalent of 40,000 people.
Both airlines are now operating at about 5 per cent capacity. If that continues into 2021, Air Intelligence aviation economist Tony Webber expects the number of employees to shrink to fewer than 2,000.
“There is so much that is out of [the airlines’] control,” he told 7.30.
“There is very little they can do, given the borders are closed.
“About all they can do is run some regional flights, but this is a very small part of the market.
“They are essentially being asked to produce nothing but still pay their fixed costs, which can’t go on forever.”
No ‘jobs guarantee at the moment’
Virgin Australia boss Paul Scurrah believes it will be some time before there is any certainty in the airline industry.
“There wouldn’t be an airline CEO in the world, or a tourism leader in the world, that would give a jobs guarantee at the moment,” he said.
“A lot of the certainty that we crave in our industry won’t come back until there are open borders and free-flowing travel between cities.”
The Australian aviation industry was one of the first sectors of the economy to feel the financial pain of the pandemic.
As it became obvious the virus was not contained to just China, borders went up and international flight routes were severely contained.
While virtually grounded due to the pandemic, Virgin Australia went into administration.
Mr Scurrah says the biggest threat to the airline is now state border closures.
“We’re not advocating for a full, unconsidered reopening of borders; we get that there need to be some restrictions to make sure that there’s not a spread of the virus,” he said.
“But where you have no cases at either end, there is no logic to keep those routes closed.”
Dreams on hold
For those who are already in the industry, or were planning to join, it is a bleak picture.
Three years ago, Glen Sparks qualified as Australia’s youngest pilot.
“I did my first solo on my 15th birthday,” he said.
“For as long as I can remember, I’ve always wanted to fly.
“It’s just the feeling of freedom. Once you’re up there, there’s no feeling quite like it really.”
The pandemic has dented his dreams.
“I’ve always aspired to fly for the commercial airlines,” Mr Sparks said.
“In Australia I would love to fly for one of the big two: Qantas or Virgin.”
But the industry is in very different shape right now to what he grew up dreaming about.
Training is expensive and Mr Sparks has been helping to pay his way by working as a shift manager at McDonald’s.
“[I’m] basically working as many days a week as I can,” he said.
“All that money just going straight into keeping me in the air, pretty much.
“It’s definitely not good to see all these people losing jobs and planes on the ground.”
‘People need to travel’
Catherine Pearson worked through a relatively golden period of aviation.
“I always wanted to fly,” she said.
“I lived in Tasmania and it was the only way out back when I was a kid.
“In 1988 I started as a flight attendant.”
She realised her job and her beloved industry were in trouble in March, on what turned out to be her last flight.
“I found out that I had three COVID-19 passengers on my flight home,” she said.
“And I’d actually had a lot to do with one of them.
“I was immediately sent off to be tested and went straight into self-isolation.
“And that 14 days, sitting here in my apartment, I realised straight away that I had to be in control.
“So I started applying for jobs.”
Ms Pearson moved into one of the few areas of growth during the pandemic — health care.
She is currently working in administration at a hospital while training in aged care.
She is confident she can return to the skies eventually, but knows regular international travel is still a long way off.
“[I’m] definitely going to return to be being a flight attendant,” she said.
“I have no doubt international will be back in 2022.
“We like to travel and people need to travel.”
Slow process getting back up to speed
Analysts warn even when borders are reopened, it will be hard to get airlines flying again quickly.
There are strict regulations on what recent flying experience pilots must have in order to transport passengers.
With so few planes in the sky at the moment, many pilots will not be getting the flying hours they need.
They will need to build up their mandatory hours in planes or simulators in order to once again qualify to take passengers.
“If you’re not flying enough sectors, you can’t get enough people trained.” aviation expert Neil Hansford told 7.30.
“We would be lucky for the two airlines to be able to produce 70 per cent of their previous capacity in the peak month of December for Christmas.”
He also says there will be delays in getting the aircraft back up and running.
“The biggest problem you’ve got to have is bringing semi-stood-down aircraft back into service and getting all of the engineering checks,” Mr Hansford said.
“We have a finite amount of labour and we can’t bring them from anywhere.
Virgin said it would abide by all the regulations that were placed on the airline industry but warned any insistence on spatial distancing on flights would be financially disastrous.
“It’s very, very difficult to make money running an airline where you can’t fill all the seats in the plane,” Mr Scurrah said.
He argues that, despite fears about the virus, people are still keen to travel and will do so once restrictions are lifted.
“You’re going to see demand come back pretty quickly,” he said.
“If we continue on the trajectory in this industry that we saw leading into the virus, it’s going to be a growth future for aviation.
“And for people who want to have a career there, I’d encourage them to keep an open mind.”