The global travel industry hit by COVID-19 is poised to get on revival mode in 2021 and reach the pre-pandemic crisis level by 2023 with the skies opening up, according to V.K. Mathews, founder and executive chairman, IBS Software.
“Our estimate is that the travel industry will contract by 25% and aviation by 50% in 2020. But from 2021, it will start growing and then shoot up steeply to reach the pre-crisis level by 2023,” Mr. Mathews told The Hindu .
Globally, the aviation sector suffered over 20% decline in May, which further plummeted to 80% in June. “We expect world aviation to pick up by 30% to 35% in July as the sector is now rewiring and revving up. But, the concern is that 10 countries, including the U.S., have been badly hit,” he said.
The U.S. had allocated $50 billion to the global aviation industry as a bail-out package while Japan and England had provided around 20% of their GDP, said Mr. Mathews, who has expertise in civil aviation and cargo logistics. However, in India, aviation had become precarious despite its great potential. Cumulatively, the players, including Air India, had been on a losing streak.
A major reason was extremely low fares in India, almost 50% of the global average and the maintenance cost. “The government needs to reduce the tax on ATF or at least bring the GST into it and also reduce the airport fees as a way of huge stimulus for the sector,” he said.
The logistics industry had done extremely well, especially air cargo. But the pandemic had brought down the cargo movement. The government had to remove hurdles such as the tax on fuels that they could do for aviation too.
Mr. Mathews said the best lesson this pandemic had taught businesses was that they should upgrade their technology. “Post-COVID-19, digital technology will be a major catalyst,” he said.
Businesses faced with dwindling revenues must know how to respond to unpredictable market conditions. “They need to economise the cost of running their enterprises and optimise efficiencies. For all that, technology holds the key.”
The crisis would also phenomenally alter the way work is done. ‘Work from home’ would be the ‘new normal’: it would give companies the freedom to hire talents from anywhere in the world. “There will not be any need to linearly increase the number of employees. While offering a better work-life balance, it will particularly help women and also facilitate social inclusion of the physically challenged,” he added.
Kerala, which boasts a robust IT sector, can become the backbone of global business facilitation and business process management. “The State also needs to revamp its higher education, teachers have to upgrade their skills, and universities have to digitally upgrade their administration,” he said.
