When traffic effectively picks up, the second challenge will be the uncertainty on how passengers will behave. The behavior will certainly differ between countries, socio-demographic groups and type of travel. Its highly likely that passengers will have increased levels of stress due to the health risks and to new/different procedures and thus more demanding for information, for support and for safe procedures.
Source: IATA; % represents sums of answers extremely concerned and somewhat concerned to the question “Once the pandemic and subsided and it has been declared safe to travel if you were to take an airplane trip how concerned would you be about possibly contracting the coronavirus/COVID-19 as a result of each of the following?” The “new normal” for air travel, will impact one of the main revenue sources for airports – the commercial revenues from duty-free & specialty stores, restaurants, car rentals, advertising, etc. Besides the inevitability of consumers trading down due to less disposable income, passengers will have less commercial dwell time (free available time to shop) due to increased health procedures and will be less willing to spend due to stress. Also, no one can deny that the imposed health measures (social distancing, PPE, sanitizing, etc.) and new safety regulations will limit strongly the experience created by brands and retailers at airports, which was the main factor for differentiation and the main buying decision factor, after price. Think about to what will happen to beauty advisors, product testing, digital touchpoints, etc. On top of this, add the limitation on the number of clients inside the stores and restaurants and in the food court. All of these new realities will certainly lead to a decrease in retail sales, and thus airport revenues. To what extent airports will be impacted? No one knows. But the market studies performed so far on passenger behavior when they return are very worrying. One study performed by KPI, concluded that only 44% of leisure passengers say they are likely/very likely to travel in the next 6 months, 56% if they are business passengers. And from those, 53% say they will limit the use of F&B outlets and 49% the use of retail outlets. In another study from IATA, the main concern for passengers inside the terminal, in terms of risk to contract the C-19 virus, is sitting on a lounge or in a restaurant in the airport (72% of travelers would be concerned/somewhat concerned). Source: KPI For airlines, there will also be a negative impact on ancillary revenues since, in the pursuit for safety, they are reducing service and sales on-board. And bespoke regulation related with the health risks, like the one introduced in Italy prohibiting the use of overheads which we mentioned previously, will also reduce yields. What seems more or less consensual industry-wide, is that in order to restore travelers confidence & trust, is necessary that the ENTIRE travel ecosystem is aligned on what is relevant, on what needs to be communicated and how, and of course, on how the operational implementation is done. To give some examples, if the country is not considered safe to travel, due to epidemiological metrics, opening boarders will not bring visitors back; if airlines don’t regain the trust of passengers, and implement different procedures, or restrict/ delay refunds, passengers will be less willing to fly again; if car rental companies, hotels, restaurants, etc., do not truly enforce the health measures and develop seamless and touchless procedures, tourists/business travelers will have a negative experience and less likely to return. The constant changes at arrivals protocols are also influencing negatively the demand recovery. But despite being a consensual topic, this is not a simple task, since it involves many stakeholders. As most of us working in the aviation sector know, it is very difficult to align interests between some players, namely airports and airlines, not only with each other, but between themselves also. Just think about the confusion generated when the LAGs restrictions were implemented after 9/11. ACI is currently working to define common guidelines, not only for the operational procedures, but including other areas like commercial businesses. The expectation is that this could bring some confidence to passengers and reduce uncertainty.
Study with 509 interviews to US & Canadian travellers performed in May 2020 Study with 4700 interviews to panel members in Australia, Canada, Chile, France, Germany, India, Japan, Singapore, United Arab Emirates, United Kingdom, United States performed in April 2020