Berlin International University of Applied Sciences Bachelor’s Thesis The impact of the spread of the Coronavirus on the Aviation Industry: An Analysis Oleg Ibragimov 1701466 6th semester Prof. Dr. Petra Poljsak‐Rosinski Prof. Dr. Erick Behar Villegas i. Abstract This paper gives an overview of the impact of the spread of the COVID-19 on the Aviation industry. It is concentrated explicitly on three airlines: Ryanair, Wizz Air, and EasyJet. The main focus is looking at the challenges the companies and their customers faced at three different times: beginning, peak, and end of the Coronavirus Crisis. It will give briefly give the overviews of those companies and define Crisis Management. Three cases of the companies and how they manage the situation with crisis and will look at their interaction with their customers at three different times. Template analysis and 4Ps will be applied to analyze the data and come up with the results, conclusions, recommendations. Keywords: Template analysis, 4Ps, Risk, Crisis, Crisis Management, the beginning, peak, and end of the Coronavirus crisis, EASA, COVID-19, Coronavirus Crisis, Ryanair, EasyJet, Wizz Air. i ii. Table of Contents i. Abstract ...................................................................................................... i ii. Table of Contents ..................................................................................... ii 1. Introduction .................................................................................................... 1 1.1. General Introduction ................................................................................. 1 1.2. Main Problem Statement .......................................................................... 2 1.3. Need and Justification for the Study ........................................................ 2 1.4. Research Aim ........................................................................................... 3 1.4.1. Research Objective ............................................................................ 3 1.4.2. Research Questions ........................................................................... 3 2. Background ........................................................................................................ 3 2.1. Companies’ overview. .................................................................................. 3 2.1.1 Ryanair: ................................................................................................... 3 2.1.2. EasyJet: .................................................................................................. 4 2.1.3. Wizz Air: ................................................................................................ 5 3. Literature Review .............................................................................................. 5 3.1. Coronavirus timeline in the Airline industry. ............................................... 5 3.1.1. Risk, Crisis and Crisis Management ...................................................... 5 3.1.2. Define the beginning, peak, and end of the Coronavirus crisis. .......... 10 3.1.3. Standard requirements and obligations for all EU passengers and airlines by EASA. .......................................................................................... 11 3.1.4. Coronavirus crisis - Ryanair case. ....................................................... 13 3.1.5. Coronavirus crisis - Wizz Air case. ..................................................... 17 3.1.6. Coronavirus crisis - EasyJet case. ........................................................ 19 3.3 Conceptual Framework ............................................................................... 20 4. Research Approach ......................................................................................... 21 4.1. Research Strategy ....................................................................................... 21 4.2. Secondary Data Collection ......................................................................... 22 4.2.1. Pros and Cons (in comparison to primary data collection) .................. 22 4.2.2. Secondary Data Collection Approach .................................................. 22 5. Data Collection and Data Analysis ................................................................ 23 5.1. Selected Case Characteristics ..................................................................... 23 ii 5.2. Template analysis for the airline industry. ................................................. 23 5.3. Airline companies’ Marketing Mix (4Ps). .................................................. 25 5.4. Applications and Results ............................................................................ 27 5.5. Limitations .................................................................................................. 27 6. Discussion and Conclusion ............................................................................. 27 6.1. Discussion of the Results. ........................................................................... 27 6.2. Revisiting the Research Objectives and Questions .................................... 28 6.3. Conclusion and practical implementation. ................................................. 28 6.4. Limitations and Future Suggestions. .......................................................... 29 iii. References ................................................................................................ 30 iii. Appendix ................................................................................................ 49 a. Chart ....................................................................................................... 49 b. Additional Pictures ................................................................................. 49 c. Figure ...................................................................................................... 51 d. Tables ..................................................................................................... 52 iii 1. Introduction 1.1.General Introduction If someone in 2019 said that in 2020 lockdown will happen and most of the world will stay in quarantine at their homes, a few would believe that this is possible. However, infection Covid-19 has paralyzed not only private people but also a business. According to www.worldometers.info on date April 07, 2020, there are 1,367,090 cases with 76,551 deaths (Coronavirus Update (Live), n.d.). Hard to find any business industry that has been not affected. Travel from China to Europe 2 months ago in February felt by 41.7% following travel restrictions, says the Guardian (Choat & Wilson, 2020). On their business felt the changes 1st of all: airlines, tour operators, Insurance firms, hotels. Association of British Travel Agents (ABTA) at their page with the link to FCO advises against all non-essential overseas travel for British nationals (Coronavirus advice for customers, n.d.). ForwardKeys, one of the world’s leading travel analytics company, (Gonzalez, 2020a) in February bookings from Asia Pacific stall by 10.5%, from China by 55.9% and the fresh update from them is that COVID-19 has brought the aviation industry to its knees. In the Chart 1. (see Appendix) Seat Capacity for Worldwide travel, January to March 2020 vs. the same period in 2019 (Gonzalez, 2020b), one can see the comparison Seat Capacity for Worldwide travel 2019 and 2020 from January to March. Even though the top 10 are still flying, but with not full capacities. If to compare week March 30 – 5th April airlines internationally lost seat capacity to 23% from the previous year, and it goes exponentially down. Only 10 million seats still in service from 44.2 million compares to 2019. According to Vice President of ForwardKeys Olivier Ponti, Governments have closed entire countries. He added that things would not return to the same numbers after a pandemic is over, and many airlines will turn to bankruptcy (Gonzalez, 2020b). It is difficult to predict how the aviation industry will change after we get across to the other side of the pandemic. However, airline companies from their 1 side can manage situations with communication with customers and new rules regulations to increase the amounts of flights. This study will be looking into the impact of the spread of COVID-19 in the aviation industry at the beginning, peak, and after peak period Coronavirus crisis. Still, the cure for Covid-19 is not found, and probably it will be just the mitigation disease treatments, and the threat of getting COVID-19 is always there. Therefore, airline companies should increase the trust and confidence of customers, how to manage this situation - that will also be part of the research question. 1.2.Main Problem Statement COVID-19 brought to many countries a lot of unpredictable situations, and after lockdown, travel-related businesses were hit the most – Hotels, Restaurants, Airlines companies. Pandemic is: “a crisis of global proportions like no other we have known” (‘Coronavirus Is Grounding the World’s Airlines’, 2020) Álex Cruz (CEO) of British Airways. Some of the airlines grounded their fleet for till 80% - Korean Air has lopped 80%, Cathay Pacific – 65%, etc., due to lockdown (‘Coronavirus Is Grounding the World’s Airlines’, 2020). However, not only companies had been hit by it, but people as well. Those who had been planning their business and leisure trips could be stuck in different countries with fewer possibilities to return home or