The onset of the COVID-19 pandemic disrupted nearly every industry around the world. Aviation was no different, and, in fact, was one of the most harshly affected industries of all. Flights were canceled, traveled restrictions were imposed, and companies felt the effect. This has led to two main problems: a significant drop in fuel demand & fuel price, and the problem of storing all the grounded aircraft. Within the field of aviation, the jet fuel market has been by far the hardest hit. Although a vaccine is on the horizon, it is expected that the demand for jet fuel will remain low into the near future. As low demand for flights leaves many companies struggling to survive, the aviation jet fuel market could take years to recover.
With many countries still limiting travel, the demand for aviation jet fuel around the world has dropped by nearly 70% since the outbreak of coronavirus. In fact, the demand for Jet-A, the most common type of jet fuel, is the lowest it has ever been. This is due to an oversupply of Jet-A caused by the unprecedented lack of flying. No matter what part of the world you look at, coronavirus had impact on aviation market.
For example, the Asian aviation fuel market has been struggling since February of 2020. Fuel demand has lowered to 740,000 bpd (barrels per day), and is expected to lower even further. In Singapore, for example, jet fuel demand drop has caused aviation fuel prices to tumble to 30% of what they would normally be. In turn, refining profits in Asia have also diminished by approximately half. In China, coronavirus led to the cancellation of more than two-thirds of its international flights. Unsurprisingly, this contributed a huge amount to the drop of fuel prices. Airlines in China are expected to lose nearly $13 billion dollars in revenue due to the pandemic.
Like Asia, North America and Europe have also felt the drastic effect of COVID-19. In the United States, fuel prices have dipped to their lowest in five years. In January of 2020, new flight restrictions to different parts of the world led to a drop in demand of more than 20%. Europe’s struggle has been even worse, with fuel demand plummeting by 70%, or about 1 million barrels per day.
In Europe, where airlines must use 80% of their allocated flights or risk losing their airport slots, many airlines are resorting to flying empty flights known as ghost flights. While this does a small amount to help increase fuel demands, it is wasteful and an unnecessary detriment to the environment. As such, many countries throughout Europe are relaxing their airport slot rules for the time being. Belgium, for example, has completely suspended the rule, meaning airlines will not lose any airports slots, no matter how little they fly. However, this has presented a second problem: with so many aircraft grounded, how can they be stored and maintained during their downtime?
When an aircraft has been stationary for a long period of time, it cannot simply start up and get back into action. Instead, they require a significant amount of attention and maintenance to ensure their airworthiness. For example, hydraulics and flight control systems must be defended from factors such as weather, insects, and other wildlife. Exposure to humidity can also corrode parts and damage the interior of the aircraft. Furthermore, to keep aircraft from rocking in the wind and keep the tanks lubricated, aircraft must often be loaded with some amount of fuel. Hydraulic fluids must be applied to landing gear to protect them from rust, and even though they are parked on the runway, tires need attention too.
Due to their busy flight schedules, commercial aircraft are designed to be in constant use. This is made possible through rigorous maintenance schedules tailored to maximum utilization of the aircraft. Since the beginning of the pandemic, despite many aircraft not flying, airlines still have to adhere to many of these maintenance strategies to ensure critical components will function properly when the time comes to do so. While this is a significant expense, the constant maintenance brings the benefit of shortened restoration time needed to bring these aircraft back into service, whenever the time comes. If airlines elected not to maintain their aircraft while grounded, all of the following could happen: critical component mechanisms could lose lubrication, batteries could partially or fully discharge, potable water systems and fuel tanks could become contaminated, and certain systems such as oxygen cylinders, tires, hydraulic systems, and landing gear shock struts could lose pressure.
The airlines themselves are responsible for the continued adherence to all airworthiness standards and must ensure that no aircraft takes flight unless it can guarantee all of the following: it has been maintained in an airworthy condition, any operation and emergency equipment is correctly installed and serviceable, the airworthiness certificate remains valid, and the maintenance of the aircraft is performed in accordance with the appropriate maintenance regimen.
To carry all this out in the midst of the COVID-19 pandemic, OEMs must tailor their maintenance programs to aim at minimizing the maintenance cost of grounded aircraft. This is done by keeping maintenance costs as low as possible until it is decided that the aircraft will be flown, detailing the maintenance requirements once the aircraft will be used, ensuring the efficient use of technicians, and optimizing the repeatable maintenance requirements. The COVID-19 pandemic has undoubtedly had a major effect on the aviation industry. However, with widespread availability of a vaccine on the way, things are beginning to look up again.
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