The Impact of Coronavirus on Transportation Modes

Delivery

This report comes in PPT.

Key Findings

Industry on its knees

The travel and tourism industry will experience a long-lasting impact across the whole value chain, with a full recovery likely to take 5-10 years in some categories. With pockets of recovery in some regions, domestic and short haul travel are expected to drive the initial rebound.

Airlines – among the hardest hit

The impact of COVID-19 on the airlines category has been huge, with the grounding of almost all the fleet as a result of nearly 90% decline in passenger demand, increasing debt and worsening liquidity, poor aircraft occupancy and a flood of cancellations and refund requests. Expectations are that the industry will become much smaller by the end of the year, as many operators are faced with bankruptcy and are forced to exit the industry.

Cruise – not far behind

Plummeting passenger numbers and revenues, as well as negative consumer perceptions as a result of health warnings and restrictions on cruise travel, in addition to declining share prices and vast monthly cash burns, are severely damaging the operations of cruise operators. Layoffs and restructuring are characterising the category.

Consumer confidence plummets

Consumer confidence is very low regarding expenditure on tourism services. With high unemployment levels in many markets, the pandemic is directly impacting the disposable income of households. Generation Z and millennial households (ie those aged under 40 in 2020) will show the biggest declines in terms of consumer expenditure in the short and medium term. Business travel will suffer as companies tighten their budgets and opt for all-digital business communication.