Ramos PrelimProject

Ramos, Audrey Paulette M.
HT221ITTM May 31, 2021
PRELIM PROJECT
1. Article from Airline Leader Journal.
Question:
In the article from Airline Leader journal, CAPA claims that the real timeframe of where
the airline industry is experiencing right now is the 1930s. Research as to the reason of
comparison. i.e., airline industry Now vs 1930s. How is the airline industry in 1930s
similar to today's airline industry conditions?
Answer:
To be able to explain the similarities of today’s situation on airline industry versus

on the 1930’s, first we must go back in time and we should understand what happened
to the world back in 1930. I came across with many articles regarding with the airline
industry that time but this article shows the history. According to the article entitled
“Great Depression History” written by the History.com Editors, from the year 1929 up to
1939 happened a great depression in United States and Europe and its severity
affected across countries. Great Depression is the result of a collapsed stock market.
Basically stock market is the buy and sell of shares in public venues by individuals or
investors. Few years earlier in 1929 the stock market of the United States increased
rapidly and expanded its economy. Therefore investors such as banks invested to these
stocks using people’s money. It happened in October 24, 1929 in Wall Street where
billions of dollars and millions of investors were wiped out because the stock prices
declined that means they lost a lot of money. Not just money, but people’s hard-earned
money. A recession happened therefore banks, businesses, companies were forced to
close resulting to laid off workers, reaching 15 million unemployed Americans.
This phenomenon evidently will also affect the airline industry considering that
not all people have money to spend, factories and productions are close to
manufacture, it slowed the growth of the aviation industry. Air travel that time became
so expensive that only the wealthy and business travelers are the ones who can flew.
The flying experience improved due to the improvements material used but remained an
often uncomfortable adventure. However the great depression did not hinder the minds
of the aviation heroes for technological improvements of airplanes.
Although the great depression did not came from an infectious respiratory
disease, similarly to what happened in the 1930 many people lost their jobs because of
the pandemic. The International Labour Organization (ILO) stated that “In 2020, 8.8 per
cent of global working hours were lost relative to the fourth quarter of 2019, equivalent
to 255 million full-time jobs” It is much worse than the great depression in 1930 because
of the total lockdown that happened. Most of the operating businesses were closed it
includes airline businesses since borders from different countries are restricted. People
are required to stay at home. According to the Aviation Leader article that, investors in
the airline industry regrets investing because of the financial impact of COVID-19. As
the industry suffer from debt causing to reduce the incoming revenue for the investors.
Again, there was a huge downfall on global economy.
Confidence in flying is one of the similarities of the two timelines. In 1930 only the
brave people are the ones who ride airplanes due to the lack of materials and
technological aspects, to be able to reduce turbulence, stabilize air pressure and
oxygen, utilities inside the airplane such as the lavatory and a lot of things to improve to
perform better care and experience for the passengers. However at the different time,
the modern airlines have all the technology and equipments for those things to comfort
passengers only the exception to this is that there’s a virus that compromises the safety
and confidence of passengers to fly. Therefore both times are needed to create change
in terms of the facilities and infrastructures. As stated by Dr Anthony Fauci from the
article Airline Leader that terminal construction changes should not be planned just for
the corona virus but for other respiratory illnesses that will appear in the future.
Changes and improvement in the airline facilities such as terminals and aircrafts should
be executed not just for the use in the current time and current adversaries but for the
years to come.
Source:
https://www.history.com/topics/great-depression/great-depression-history
2. News video clip from CNBC show.
Question:
Based on the CNBC news, what measure are the Airlines taking to combat COVID19
virus to give back confidence to the flying public?
Answer:
The Covid-19 made a significant impact on the airline industry. That is why many
airline companies are trying to think of ways to convince passengers to start and begin
to fly. Based on the CNBC show, here are some the airline companies that are taking
measure and making alternative to establish the confidence of passengers during this
time of pandemic; United Airlines are cutting down their seating capacity down to 50%
considering the physical distancing of every passengers, Ryanair is grounding majority
of their fleets and not taking any flights from outside in country’s borders, Virgin Atlantic
giving an unpaid leave for 8 weeks to its staff members, and Delta hired Earth Safe
Chemical Alternative to spray the whole aircraft with chemical disinfectant. Its benefit is
that it is a fast procedure only taking 3-4 minutes to spray from start to finish in the
entire plane and 1 minute to kill viruses. It can be use between every turn of the airplane
so it is much efficient.
Airports would lose in aeronautical revenue alone, it will depend on how long
travel restrictions remain in place and how quickly the recovery comes. Therefore dept
and bankruptcies are more likely to happen. Some airlines use their revenue
management or the pricing of their tickets to encourage attract passengers. They lower
their rates down to 40% and uses the advance purchase requirement to be able to
lessen the rates. The earlier you book your flight the more it is cheaper depending on
what day you will be using it.
Other airline tried to decrease their operations for about 30-50% and some of
them announced for temporary or permanent retirement of the entire fleets. Air New
Zealand is one that announce that they will not be bringing back their largest
international aircraft. Another is Delta announcing for retirement of their largest planes.
Airline Companies are indeed hanging off the cliff. Some fall and some are really
trying their best to survive. Their methods are to seek assistance from government or
cost cuts/furloughs. According to the article “How Is the Airline Industry Adapting to
COVID?” that CARES act was passed to provide billions of dollars in assistance to the
airlines. This method might suffer airlines due to debt but it will help them to survive in this
hopefully short term catastrophic event that happens worldwide.
Source:
https://insights.som.yale.edu/insights/how-is-the-airline-industry-adapting-to-covid
3. IATATV video clip re financial impact of COVID19 on the industry.
Question:
Based on IATA President's statement, enumerate where and which two airline supports
are needed to ensure connectivity for stakeholders in this pandemic, apart from cutting
of capacity and cutting expenses.
Answer:
As stated in answer in the previous question, government is one of the lifelines of

airlines to be able to survive this crisis. In 2020 up to this year 2021, the crisis that
happened was not limited to health alone but to all aspects including the global financial
crisis. Based on what the IATA President Brian Pearce, he said the estimated loss in
the global revenues was $63 billion roughly 11%, if the outbreak was only limited from
Europe and Middle East. However if it spread got wider it would grow to $113 billion
which is 19% of the global revenues. Imagining that shocking amount of money are lost
because of this pandemic worldwide is upsetting. He also said that other that cutting
capacity and cutting costs which is not sufficient to balance the revenue impact. If the
government wants connectivity maintained to support consumer and businesses they
need to support airline industry. Other that government support from providers of credit
and other finance are also encourage.
From the article entitled “These Airlines Have Received A Bailout” provided the
corresponding data and information with list of some of the supported airlines
companies:
1. Air France-KLM 8. Norwegian Air

2. American Airlines 9. Ryanair
3. British Airways 10. Southwest Airlines
4. Delta 11. United
5. Easyjet 12. Virgin Atlantic
6. Iberia 13. Vueling
7. Lufthansa Group
Source:
https://www.businesstraveller.com/features/these-airlines-have-received-a-bailout/

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Ramos, Audrey Paulette M.

HT221ITTM May 31, 2021

1. Article from Airline Leader Journal.

To be able to explain the similarities of today’s situation on airline industry versus

2. News video clip from CNBC show.

3. IATATV video clip re financial impact of COVID19 on the industry.

As stated in answer in the previous question, government is one of the lifelines of

1. Air France-KLM 8. Norwegian Air

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