Aviation Industry Updates: December 15, 2020

FAA Finally Makes A Smart Decision

KEY POINTS:

• Following the Emergency Use Authorization from the U.S. Food and Drug Administration for Pfizer, Inc.’s COVID-19 vaccine, the FAA has determined that pilots may receive the vaccine under the conditions of their FAA-issued airman medical certification.

• To maintain the highest level of safety in the National Airspace System, the agency will require aviation professionals with medical certifications or medical clearances to observe a period of 48 hours following the administration of this vaccine before conducting safety-sensitive aviation duties, such as flying or controlling air traffic.

• Because the Pfizer vaccine requires two doses, 21 days apart for maximum effectiveness, this waiting period applies after each dose.

• The FAA anticipates taking no additional measures to ensure safety after the initial window for side effects closes.

• The FAA will evaluate vaccines from other manufacturers as they receive FDA authorization in the coming weeks and months and will advise pilots and air traffic controllers of any waiting periods required for those vaccines.

FAA News

Business Travelers Give Up

KEY POINTS:

• A new study by a group of travel experts set out to determine what percentage of business travel may be permanently lost in the post-COVID-19 era. The results weren’t pretty.

• For each subset of corporate travel, the study’s authors assigned a high and low estimate for how much demand could be replaced by technology. Taken together, the study concluded that airlines will lose out on 19% of pre-pandemic business travel under a best-case scenario, and as much as 36% under a pessimistic outlook.

• The most at-risk categories consist of travel for internal corporate purposes. The study found that between 40% and 60% of this traffic will disappear in the future, as companies look to make use of new technologies adopted during the pandemic to replace costly company-wide meetings and staff retreats.

• Another at-risk category is commuting by air, which normally represents 5% of all business travel. Essentially, many commuters before the pandemic will be permanently reclassified as remote-workers in the future.

• Travel for external purposes, by contrast, appears far more resilient, but will also see some lost demand on the other side of the pandemic. The safest form of corporate travel appears to be that which is aimed at sales and securing clients, which normally makes up 25% of total business travel. The study estimates this category will lose between zero and 20% of future demand—less than any other subset—reflecting the continued need for firms to be physically present when competing for new business.

• Also relatively safe are convention and trade shows, which usually comprise around 20% of all corporate travel.

• The finding that as much as 36% of future business travel demand may disappear holds huge implications for legacy airlines, which depend on the segment for a large chunk of their revenues.

• Legacy airlines will have to take a page out of the LCC playbook, and learn to think more like leisure carriers, if they want to maintain or grow their market share in the post-pandemic world.

Aviation Week

Delta Begs Employees

KEY POINTS:

• Delta Air Lines has managed to avoid furloughs but is now asking more employees to take unpaid leaves of absence, a sign of the deepening slump in air travel as coronavirus cases increase across the United States.

• CEO Ed Bastian said Wednesday that Delta will need takers for its unpaid-leave program “for the foreseeable future.”

• “I ask everyone to consider whether a voluntary leave makes sense for you and your family,” he said in a memo to employees.

• Unlike American Airlines and United Airlines, which furloughed a combined 32,000 workers in October, Atlanta-based Delta avoided furloughs by convincing thousands of workers to retire early or take unpaid leave.

• Passenger traffic rose over Thanksgiving week, although numbers were down more than half from a year earlier. Traffic has dropped since the holiday.

Associated Press

IATA | Useful Numbers Even Pilots Can Understand

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Weekly TSA Numbers

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