Veronika N.: How do you think aviation will be affected? Will there be an even bigger demand for cargo carriers? Will people be happy and excited to travel again by which raising the demand even higher than before or will people shy away from international tourism due to bad experience?

Answer by Sebastian Kummer, Head of WU's Institute for Institute for Transport and Logistics Management:

It is obvious that the aviation industry is heavily affected by the coronavirus situation. Due to the fact that a lot of air cargo is usually transported by passenger aircraft using the belly cargo compartment, there is a big shortage of air transport capacity. Of course, air cargo carriers that are operating dedicated cargo airplanes now profit substantially from higher prices and higher demand. Due to shortages in the supply chain because of production closures in China, in fact there might be a short-term increase in demand because the supply chains need to be replenished. But as production is also slowing down in Europe, demand for air cargo services will go down, too.

It is very difficult to make forecasts about how air travel will develop after the crisis. It is possible that things may return to how they were before, and the airline industry may grow faster than the economy as a whole. However, there is a significant probability that there will be a change in people’s mindset and that they will try to avoid air traveling, which would harm the industry seriously. The probability that we will see significantly higher demand than before the crisis is very low.

Sebastian Kummer: In the short term, the industry is affected heavily. The probability that airlines will become bankrupt is very high. This would mean that employees like pilots and flight attendants would lose their jobs. The airports and their employees are also affected by the crisis. For Boeing, the crisis is a disaster. Already before the crisis, they were struggling with the problems associated with their most important airplane, the 737 MAX. Now they will also have to deal with problems in other segments, too. Maybe the US government will have to come to Boeing’s rescue. The company is, of course, too important to let it go bankrupt.

The situation is a bit better for Airbus, as they have a huge order pipeline and were unable to fulfill the strong demand in the past. Of course, the challenges facing the whole industry could also become a problem for Airbus, but it will not be as serious as for Boeing.