CASE STUDY

ABOUT
AIRLINE SECTOR
(Before & During Pandemic)

Submitted by:

BSTM112

Flores, Vhia Biannca

Fulgencio, Andrea Mae

Geray, John Michael

Hora, Angel

Irinco, Claresse Joy

Juntilla, Nikki

Submitted to:

Ma’am. Ana Celine Esquierdo

Date:

January 17, 2021

I. SYNTHESIS

 Direct impact

Before Pandemic- When the time that there is still no pandemic that we are
experiencing the sector of airline has done a lot of promotions such as travel buckets,
vouchers, and many more. It resulted of increasing the numbers of tourists that are
coming in our country, so different airline companies has increases their incomes and it
reflected of having higher wages for their employees and also it open doors for more
people who wanted to work in airline company because of the demand of it.

During Pandemic- When the pandemic has arrived in our country airline sector is one
of the sectors that is badly affected by it because the government implemented
restrictions of other nationalities or tourists in entering our country for the safety of all.
Because of it the airline companies has decrease their incomes in their company
because there are only few people who are able to use the airline. And because of that
majority of the employees in airline sector such as cabin crew, flight attendant, pilot,
ticketing employees, and utilities has lost their job because some of the company no
longer able to give them salaries for their work.

 Indirect impact

Before Pandemic- Before the midst of pandemic each airline have their specific supplier
companies that supplying them in all of the things that were needed in the airline
company from the ticketing station up until in the airplane itself. The prices or cost of the
supplies that were needed is fixed or the cost of it was already decided and managed
that’s why there is no cost increase in booking a flight which is very convenient for every
passengers.
During Pandemic- Because of the pandemic, there are a lot of businesses that
temporarily closed or shut down their businesses because of their business didn’t earn
money anymore or they are having hard time earning money because of the pandemic.
And because of this airline sectors don’t have choice but to find or look for another
supplier company that will supply their needs even if it will cost much more money
because some of the materials were increase the prize, so the airline company
 increases also their flight cost. And also because of pandemic airline employee was also
considered as a front liner so they are mandated to wear PPE’s to [protect themselves
and those PPE also cost more money which affected the cost of booking and flight.

 Induced Impact

Before Pandemic- Before the pandemic everything is normal at that time and the
economy of the country is still stable and rising that’s why we are considered as one of
the countries that is rising in economic status. And the sectors of airline are one of the
major contributors in the economy because the tourism is the second major contributor
in the whole GDP of the country. Also employees are spending their income in the
necessary things that they are needed and bills that they need to pay at the end of the
month. And the taxes that the government is collecting will be used in the infrastructures
such as building main roads, bridges, or even buildings.

During Pandemic- During the time where pandemic were already badly affected us, our
economy was the biggest affected of it because according to some reports our GDP
decreases which is bad for the status of our economy. And employees of airline spends
more of their income unlike before the pandemic because when the pandemic came we
are locked in our homes and our movement outside is limited and some of the
employees were not able to work because there are no transportation and some of the
employees are no work no pay. They spend their income in the foods, protective
equipment’s, and some of them pay their own swab test.

II. STATEMENT OF THE PROBLEM

Before the COVID-19 pandemic air transport represents a small share of GDP but is
closely linked to the activities of other sectors especially airports and aircraft manufacturing
collectively considered here as the aviation industry. The aviation industry is a key enabler of
many economic activities. The dramatic drop in demand for passenger air transport and freight
to a lesser extent due to the COVID – 19 pandemic and containment measures is threatening
the viability of many firms in both the air transport sector and the rest of the aviation industry
with many jobs at stake. While the aviation industry has often been a target of government
policies, the COVID-19 crisis has precipitated a new suite of loan, loan guarantees, wage
subsidies and equity injections, raising concerns about competition and the efficient use of
public resource.

During this pandemic its impact on aviation, the COVID-19 pandemic has had a
significant impact on airline companies due to travel restrictions and a slump in demand among
travelers. Several airlines have declared bankruptcy, with some ceasing operations, while other
airlines reported historic reductions in flights. After a surge in traveler complaints about airline
ticket refunds during the coronavirus pandemic, the U.S. Department of Transportation issued
its second warning in as many months to airlines on. The agency said it has received more than
25,000 air travel service complaints in March and April. That compares to an average of 1,500
in a typical month.

The Department has received an unprecedented volume of complaints from

passengers and is examining this issue closely to ensure that airlines’ policies and practices
conform to DOT’s refund rules, U.S. Secretary of Transportation Elaine L. Chao said in a
statement. “The department is asking all airlines to revisit their customer service policies and
ensure they are as flexible and considerate as possible to the needs of passengers who face
financial hardship during this time.

A key problem the DOT does not define significant, so airline policies vary and some
are using that lack of clear guidance as a way to get out of issuing refunds because cancellation
and significant change are not defined in the context of ticket refunds, airlines may develop
reasonable interpretations of those terms the DOT said in the enforcement notice.

III. STATEMENT OF THE OBJECTIVE/S

This case study will be tackled about the situation of the airline sectors before and
during the crisis that we are facing up until this day which is the pandemic. The goal of our case
study is to improve the quality of travel experience of the travelers. It aims to remember the
consistency of services of the airlines here in the Philippines. Also, we promote the promotion
that every airline here in the Philippines gives: like for example every summer season they give
high discount when you are going to some areas in the Philippines. We want you to know that
airlines here in the Philippines assure your safeness because each airline provides guidelines
and protocols before, during, and after your flight and we want you to enjoy your travel or
vacation. And we want to promote that the passenger will always receive the highest quality of
service that he/she will encounter. Also, we want our airlines here in the Philippines become a
top tier when it comes on airline service. The general goal is to create repeat and loyal
customers that will always choose Philippine airlines because of its service and security.
Specifically here are the objective of our case study that will help and guide us in creating and
conducting this kind of case study:

 To be able to give and provide solution on how airline sector regain its vitality.
 To differentiate the impact of the pandemic in airline sector before and during the
crisis.
 To improve and enhance the quality of tourism in the country.
 Give insights on the situation that the pandemic brought in the sector of airline.
 To create a paper that will serve as a guide for the reader on the problem that the
airline sectors are facing.

IV. AREAS OF CONSIDERATION

BEFORE

Before the coronavirus, an average of more than 1 million people were traveling by plane at any
given time. The pandemic reduced the number to less than 100,000. MADE looks at the
numbers on the pandemic's impact on the airline industry.

DURING

Early March 2020 saw 10% of all flights cancelled compared to 2019. As the
pandemic progressed, 40–60% fewer flight movements were recorded in late March with
international flights affected the most. By April 2020, over 80% flight movements were restricted
across all regions.

Significant reductions in passenger numbers have resulted in flights being cancelled

or planes flying empty between airports, which in turn massively reduced revenues for airlines
and forced many airlines to lay off employees or declare bankruptcy. Some have attempted to
avoid refunding cancelled trips in order to diminish their losses.

When the COVID-19 crisis hit air transport, the whole aviation industry was affected
The change in the behaviour of passengers following the COVID-19 crisis, travel restrictions
and the ensuing economic crisis have resulted in a dramatic drop in demand for airline services.
According to IATA, passenger air transport measured as revenue passenger kilometre was
down 90% year-on-year in April 2020 and still down 75% in August. The collapse in economic
activity and trade affected freight, which was almost 30% lower year-on-year in April and still
about 12% lower in August.

The size of the shock has put the liquidity buffers of airline companies under
pressure, even if a significant share of its costs are variable (around 50% according to IATA,
notably fuel accounting for 25% of the total costs) and the recent drop in oil prices has
decreased airlines’ operating costs.

In the medium run, airline companies face two uncertainties:

The cost of health-related measures. Operating costs are likely to increase in the
short-run for both airlines and airports because of additional health and safety requirements
(e.g. disinfection, PPE, temperature checks or viral tests) before they can be passed on to
consumers. Moreover, if implemented for air transport, social distancing measures could force a
reduction in the passenger load factor (i.e. the number of seats that can be occupied during a
flight) by up to 50%.

The shape of the recovery for commercial flights. International travel restrictions, the
contraction of economic activity and changes in transport behaviour by cautious consumers may
prevent a return to pre-crisis demand levels, even as lockdowns and domestic travel restrictions
measures are loosened in many countries. Commercial air traffic is slow to recover: as of
September 2020, the number of flights remains more than 40% below pre-crisis level globally
(Figure 2). This hides differences across flight lengths: the drop is even more pronounced for
long-haul flights. In the longer run, changes in consumer behaviour may result in structural
changes in air transport demand. Even though the rebound of domestic flights in China
suggests that traffic may revert to pre-crisis levels, a permanent drop in demand from pre-crisis
levels cannot be excluded, either through modal shifts in services trade (e.g. video-conferencing
instead of business travel) or, to a lesser extent, through substitution with other modes of
transport (e.g. high-speed trains).

The combination of negative demand and supply shocks and the uncertainty around the
medium-run outlook create an uncertain perspective for airline companies. Through inter-
industry linkages, this uncertainty affects the whole aviation industry. Moreover, the industry
remains exposed to a possible resurgence of the pandemic, as governments may impose new
air travel restrictions to tackle flare-ups or a potential second wave of infections. This may
threaten the existence of some firms in the industry, as production and revenues are likely to
remain inferior to pre-crisis levels for some time.

V. ALTERNATIVE COURSE ACTION (ACA)

The COVID-19 pandemic has had a significant impact on the aviation industry due
to travel restrictions and a slump in demand among travelers.

Significant reductions in passenger numbers have resulted in flights being cancelled

or planes flying empty between airports, which in turn massively reduced revenues for airlines
and forced many airlines to lay off employees or declare bankruptcy. Some have attempted to
avoid refunding cancelled trips in order to diminish their losses. Airliner manufacturers and
airport operators have also lain off employees. Here are some of the things that the tourism
department and airline could do to bring back and regain the vitality of the sector of airline:

 PROMOS/DISCOUNTS

Discounts are very attractive to customers and may not only bring new clients but
can also bring back previous customers. Discounting products and services, particularly in-
demand ones, is a good way to get attention. Especially in these days of social media, word-of-
mouth traffic can increase results on promotions exponentially quickly.

The biggest pro, obviously, is the traveler saving money on airfare. If you’re
traveling for vacation, then that allows you to allocate those funds elsewhere in your vacation
budget. Airlines will set a base fee on the ticket, and then let you choose from there what extras
you want to add. By doing this, it allows the traveler to set their own price on getting to their
destination.

BUY 1 TAKE 1 TICKET

Buy 1 ticket and you can take your friend/family for free (at least one person). By promoting this
kind of promo, Airlines will have a lot of customer.

GIVE AWAYS TICKETS

Giveaways are the millennial generations of interactive content types. They're not only
extremely fun and engaging but also a great gift to marketers. They are cost-effective and the
right way might extend your social reach by a great manifold. For example the airlines will have
ruffles for their costumer to boost his company but before that you will complete their instruction
or the mechanics of the giveaway.

 ADVERTISING

They also have numerous choices of formats for their campaigns: print, TV, digital
and ambient adverts. Ads can be placed on in-flight magazine, passing board or displayed on
TV on-board or on the touch screen of digital devices. Many airlines are event offering free Wi-
Fi on flights, which is another very effective way for them to sneak in advertising. Some of the
ads are highly technological touch screens while others are very basic, such as the napkin a
passenger receives when they request a drink.

SEATBACK DEVICES

Seatback devices are placed right in front of every passenger behind their meal tray tables.
There are numerous possibilities to display multiple creative on each row as each seatback in a
row is visible to all the three passengers and is up close to the passenger.

PRODUCT SAMPLING

Engage your audience with your products with firsthand experiences. When airline passengers
get a taste of your product, they are more likely to endorse it, consider buying it and share it on
social media. Product sampling experiences lead to goodwill for the brand and provide an
amazing recall value from its target audience what with the plethora of options available to
explore.

SKYLINE PANNELS

Skyline Panels, visible throughout the flight starting from the front of the cabin to the back, are
placed strategically just below the cabin lights. This makes them perfect for backlit advertising
irrespective of whether it’s a day flight or night. They get all the attention and are appropriate for
a storyboard, to promote multiple features and each panel can have a different creative.
  COMMERCIAL OR PROMOTING VIDEO

A promotional video or promo video is a video used for the express purpose of
promoting a specific marketing initiative, sale, or event. Promos are often similar in style and
tone to a teaser video, where you grab your audience’s attention and draw them in to learn
more. This video for a curbside cook-off event is an effective example.

The airline industry is an important contributor towards economic development. It

has not only increased world trade activity by enabling faster and easier movement of
passengers and goods, but has also provided jobs to millions of people.

VI. CONCLUSION

The tourism industry has an important and significant role to play in one’s country
economy, and here in the Philippines tourism industry is the second major contributors in the
nations GDP. But because of the pandemic that started in the first month of 2020 tourism
industry especially airline sector is the most affected by the crisis because lockdown and closing
borders was implemented by the government for the safety of all. But because of this tourism
industry decrease its percentage of contribution because there are limited numbers of visitors
that can enter the country and some of them are OFW from other nation. Before pandemic
occurs it was expected that numbers of tourists will be at least 10 million people, but during the
pandemic this number declined because of many and different reasons.

In order to regain the life or energy of the airline sector, one solution that could be
done is making and having promotions and discounts for the future customers. Offering
promotions and discounts plays an important role in achieving the goal of the tourism industry
which is to regain the vitality of the tourism in the country. Also, those promotions and discounts
is one way to quickly draw the people attention and curiosity in ones businesses even though
they didn’t heard or known the businesses because ones they have heard that they will save
more money they will rush to look for it and most importantly promotions and discounts don’t
only help your potential customers but they could also help your businesses and can bring to
success. There are a lot of kinds that could be done and offer for the potential customers such
as buy 1 get 1 free ticket, ruffle or giveaway tickets, vouchers, bundles, discount sales, and
many more. Also promotions and discounts have a lot of benefits that could help the airline
sector in regaining its energy like it can attract new and repeated customers because majority of
customers much prefer buying things on discounted amount or in sales. Increase the sale of the
airline because promos and discounts attract more potential customers or tourists and for that
reason the revenue of the airline could increase. Lastly, it could improve the image of the airline
company because once there are plenty of customers your reputation will be known in a lot of
people from different races and ages.

These promotion and discounts could be done in two way in order to public o know
about it: physical promotion and online promotion. When we talk about physical promotion this
is where you personally give brochures or pamphlet in public places but in our status right now
this kind of work is not encouraged for the safety of the worker and the company itself. And the
second one is online promotion. We all know that online is very rampant and timely in this
generation because most of the people from different ages are now using gadgets and has
social media accounts, so we should take advantage of it and promote the airline sectors for
other and public to know more about it and most of the booking right now is done through online
so online promotion is the best choice in promoting the tourism industry in our country. Even
though our tourism industry and airline sector was badly affected by the pandemic, still there are
numerous things that could be done in order to regain the life of tourism in the country and one
of them is through creating and offering discounts and promos.

VII. REFLECTION

Flores, Vhia Biannca

When I was younger until now I am a College Student I want to pursue my dream to
become a cabin crew because I was always fascinated with the airplanes and to the flying
world. Someday my passion for aviation will become true. This is the one that I picked because I
want to be with some Filipinos that is working to out airlines. Filipinos are passionate and
hospitable when some of our visitors or foreigners are visiting country. Also, our airlines here in
the Philippines have a good quality of services. They are very strict to secure that the flight is
safe. And base on my experience, I was to go back home in Manila alone and one of the crew in
that airline that I ride guided me on what will I do because that time I was only 15 years old.
They are very generous on their career and someday I will be one of them.
Fulgencio, Andrea Mae

What I learned in our case study is The airline industry is an important contributor
towards economic development. It has not only increased world trade activity by enabling faster
and easier movement of passengers and goods, but has also provided jobs to millions of
people. Economic growth has been the primary reason for the growth in demand. As a student,
taking this course Tourism Management you will learn about sustainable tourism and how you
can mitigate the negative impacts of travel on the environment. With more and more people
travelling each year, it’s important to understand the impact this has on cultures, communities
and our planet. Tourism has the potential to make the world a better place by bringing economic
benefits to poorer destinations and keeping tourist hotspot flourishing

Geray, John Michael

In creating this case study is not an easy task to do because you really need to be
knowledgeable and you need to find legit and reliable sources in order to have a case study that
is helpful to other people. At first, me and my group don’t know yet how to start to do this task
but later on we found out on how to deal this kind of activity and with the cooperation and help
of all the group members we are able to finish this case study. This case study help me as a
tourism student to deeply learn and know the struggles and problems that the airline sector is
facing and what would happen if this problem occurs on them, and lastly what are the actions
and plans that need to be done and consider in order to solve this kind of problems. Importantly,
this crisis that we are facing right now really and badly affects the airline or aviation sector
because most of the flights were cancelled and here are limited numbers of people who can
book a flight and enter the country because of the safety precautions that the government
implemented for the safety of all. Because we all know that tourism is the second sector in our
country who contributes a lot in our economy and because of the pandemic the tourism were
affected that’s why the economy of the country was affected also. What I learned about this
case study that we conducted is that the pandemic really have a bad effect in our tourism
especially in airline sector, and because of this case study I were able to learn more and acquire
knowledge that I will treasure and will use in my future career as a tourism student.

Hora, Angel

What I learned about airline before tourist they want to experience the beautiful flight
and be comfortable when it comes to travel not in the Philippines affect even over the world and
also there not making as much money because there aren’t a lot of flights going in and out. But
nowadays during the pandemic all the airline have problem like bankrupt.

Irinco, Claresse Joy

Without a doubt, the tourism industry is among the sectors that have been greatly
affected by the COVID-19 pandemic. The closing of borders, airports, and hotels as well as
restrictions on mass gatherings, land travel and related services across the world put around
100 to 120 million jobs at risk, as estimated by the World Tourism Organization.

In the first quarter of 2020, the period when the travel restrictions and lockdowns in
most countries started, international tourist arrivals declined by 22% resulting in an estimated
loss of US$80bn in global tourism receipts. In such period, 97 destinations have totally or
partially closed their borders for tourists, 65 destinations have suspended international flights
totally or partially, and 39 destinations were implementing the closing of borders (i.e., banning
the arrivals from specific countries).

VIII. BIBLIOGRAPHY/REFERENCES

 Hockley, L. (2020). Coronavirus roundtable: How is the aviation industry

responding to the COVID-19 pandemic?. International Airport Review. Retrieved from
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pandemic/
 Maneenop, S & Katcharin, S. (2020). The impacts of COVID-19 on the global airline
industry: An event study approach. PMC: US National Library of Medicine. National
Institutes of Health. Retrieve from
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7451055/
 Mohammad, A.H. (2015). PROMOTIONAL ACTIVITIES IN THE STRATEGIC TOURISM
DEVELOPMENT OF LAPLAND. Case Study: Tour Operator’s appearance in social
media. CENTRIA UNIVERSITY OF APPLIED SCIENCES. Retrieved from
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%202.pdf?sequence=1
 Monmousseau, P, Marzouli, A. et. al. (2020). Impact of Covid-19 on passengers and
airlines from passenger measurements: Managing customer satisfaction while putting
the US Air Transportation System to sleep. Science Direct. Com. Volume7. Retrieved
from https://www.sciencedirect.com/science/article/pii/S2590198220300907
 Sakthi, M. (2018). What are some examples of creative airline advertisements?.
Quora.com. Retrieved from https://www.quora.com/What-are-some-examples-of-
creative-airline-advertisements