Changes and challenges for aviation after Covid-19

The effects of Covid-19 and the resulting standstill in air traffic are well known. But which developments can we expect in the future? What will airports and aircraft look like in the future? Even if we are already quite carefree about the pandemic in our everyday lives, some innovations are necessary and to be expected (if not already introduced) that will affect us when we fly.

Passenger numbers are rising, air traffic is increasing again. Passenger and flight cancellations of almost 100% are currently a thing of the past again, but all airlines are under pressure to fill their planes.

Will prices continue to fall, or will there be an increase in price to cover additional costs? Will there be the same number of offers and will all destinations be possible?

There are already cheap offers again – the airlines are under pressure to fill their planes and new low-cost airlines have already been founded. In the medium term, however, prices could rise: a reduction in offers is expected, the extra expense for corona protection must be paid. And the increase of the ticket tax – especially short-haul flights up to about 300 km distance are to be taxed additionally with 30 EUR (one-way) is being. Discussions about CO2 emissions and the cancellation of short-haul flights or switching to rail are also an issue.

How is the security situation? What protective measures have already been taken or are still necessary?

An airport is a mass operation of passengers, visitors and staff employed – coming and going in crisscross fashion, queues at check-in, dense crowds in front of the security check, narrow waiting zones in front of the gates, in the feeder buses and finally on the plane itself.

The “3-G rule” of course also applies here. Corona quick tests are offered virtually at the gate: the test can be carried out for a small fee and the result is available within three to six hours. Premium services for passengers are created in order to avoid waiting times and passenger congestion.

Passenger data and seat allocation are becoming even more important to make infection traceable. Mandatory protective masks for passengers and employees, plexiglass at check-in, boarding and information desks, distance markings and disinfection, limitation of passengers per bus and protective measures in the aircraft itself such as mandatory masks will accompany us for a long time.

Current security measures can be found on the homepage of airports and airlines.

Related Insights

Ilse Konheisner-Holub

Group Practice Leader Aviation

Hotline available 24/7: +43 5 04 04 200

Sky dangers

Aviation accidents and their effects on insurance

Safety is of enormous importance, especially in the field of aviation, and must or will become an increasingly important issue – but accidents still happen. We also see the effects in the developments of aviation insurance.

Spectacular accidents are reported in the media, but a large number of small, private aircraft involved in accidents remain hidden from the public.

Aviation accidents on the rise

According to statistics from Austro Control 1), to which damage must be reported as the highest aviation authority in Austria (Regulation (EU) No. 376/2014), the human factor is the greatest cause of accidents. Not only due to a loss of control during the flight or during take-off and landing, but also due to poor briefing in flight planning and preparation, as well as from airmen ship, i.e. the behaviour and skills of a pilot in terms of dexterity, technique and also awareness of the aircraft, the flight conditions and one’s own abilities.

Technical failure, weather turbulence or e.g. bird strikes are far behind in the damage scenario!

According to Statistics Austria , a total of 64 aviation accidents were registered in Austria in 2020. Despite the Corona year with fewer flight movements, this is an increase of 14.3% compared to 2019. Hang-gliders/paragliders and parachutists are particularly affected (53 incidents). Fatalities are also reported.

The remainder relates to the area of general aviation, whereby commercial aviation in Austria did not file a claim.
Internationally, the year 2020 – despite the low air traffic – was affected by a number of major accidents, with a total of 176 incidents reported worldwide (private and commercial aviation)2. The following are certainly still remembered:

Why choose GrECo?

The insurance market has become extremely demanding. An insurance broker makes the process of gathering the offers much easier, more time and cost efficient and, above all, focused on a tailor made solution for the client. Operating completely independently, we are representing interests and benefits of the insured and not the insurer under both professional and material responsibility.

Our team work provides our clients with in-depth specialist knowledge, committed representation of the client’s interests, providing custom solutions, counseling and excellent support. Such solid foundations are the result of fruitful cooperation of our teams, their perseverance, commitment and an unwavering focus on achieving the best results for the benefit of our clients in a demanding risk management environment.

  • January: Boeing 737-800 / Ukraine International Airlines – 176 persons
  • February: Boeing 737-800 / Pegasus Airlines – 3 persons dead, 179 injured
  • May: Airbus A320-214 / Pakistan International Airlines – 97 people dead, 2 injured
  • August: Boeing 737-800 / Air India Express – 21 people dead, 100 injuredine 1

Natural disasters such as hurricanes, which have a destructive effect on airports and the aircraft on them, are a further potential hazard and source of damage.

If one assumes that a Boeing 737-800, for example, can have a value of around 85 million USD, and that the compulsory liability insurance sums for this aircraft are set at 300 million SDR, the extent for international aviation insurers can be imagined.

Consequences for the aviation insurance market

The consequence of this has been noticeable in the entire aviation insurance market for about two years, especially in rising premiums and increased deductibles, but also higher requirements in the experience of pilots and mandatory simulator training. The other effects are a shortage of capacity, insurers withdrawing from areas of the market and/or reducing the coverage capacity made available for risks. Where two years ago sums of 150 million EUR were underwritten by one insurer, today two to three are needed to cover this sum.

An end to developments in this direction is not yet in sight. The gap between claims expenditure and insurers’ income is still large and needs to be covered.

1) Annual Safety Review 2019
2) Aviation Safety Network

Related Insights

Ilse Konheisner-Holub

Group Practice Leader Aviation

Hotline available 24/7: +43 5 04 04 200