Analysis: The Impact of Covid-19 on Airline Layovers

Originally Published: 4/22/20

No one is shocked to hear that Covid-19 has had a dramatic impact on global travel. Given we manage crew logistics for the majority of the global aviation industry, we have a unique perspective from the data mining that we have done over the past few months. In light of this unique insight, many CEO’s and board members of the major global airlines have reached out to me to better understand from a macro level how this has evolved in different regions in order to give them a better sense of their destiny so that they can be proactive in managing this crisis.  We would like to share our view as we have watched this play out initially in Asia during the early outbreak, to then similarly unfold in Europe followed by the Middle East. Finally, we have seen its impact on North and Latin America. As expected, the dataset we have shows that the impact has been eerily similar regardless of the region, the only difference being the timing of the impact based on when Covid-19 became an issue to the particular region.

Rather than continue to have these one-off conversations, although frankly being stuck at home I ask that you please continue to call as I am not wired for isolation, I think it makes most sense that we share our insight with the entire aviation community. One thing that I have explained to the executives that I have spoken with and stands true in this white paper is, our data is highly confidential on an individual client basis and no individual airline’s information will be divulged or be able to be reverse engineered.  Given our massive global reach and large client base we have aggregated extensive data sets and will merely share impacts on regions in order for everyone to have full confidentiality and enable the entire community to benefit from the global trend analysis.  What we will focus on in this paper is:

  • trends we have seen from the beginning of the crisis through present,
  • steps we have proactively made for our clients in order to financially and operationally assist them with overall best practices for the industry in regard to crew accommodations and logistics during these times,
  • and what the recovery looks like and steps airlines should be taking now in order to most efficiently and effectively manage the reset.

Crisis Trends

Over the past one hundred days, airline layover volume has seen significant decreases due to the global response to the outbreak of Covid-19. Across the globe, we have seen carriers from almost all segments of the aviation industry (apart from cargo and charter operators) significantly reducing their layovers.

Asia: Among carriers operating out of the Asia region, the response to Covid-19 took effect earlier than other parts of the world. In February, we had already witnessed an unprecedented 32% drop in layover volume from Asian carriers. By the end of March, volume had fallen an additional 69%. From peak to trough we see Asia down over 90%. That said, we are now seeing some clients in the region start to begin the reset with some new steps that they are taking (monitoring passenger’s temperature, leaving empty seats, and more stringent cleaning of the aircraft at each turn), although many are turning planes and reducing layovers. 

Source: Hotel Connections; April based on MTD projections

Europe: As you can see by this chart, in Europe the decline started in March with a 32% reduction and given how hard Italy and Spain were hit we see a further 83% reduction in April. Like Asia, from peak to trough we are seeing volume down just under 90%. We have not seen the reset take hold yet in Europe, but we anticipate it to begin sometime in late May and there are early indications the lessons learned in Asia will take hold in Europe through similar safety precautions.

Source: Hotel Connections; April based on MTD projections

Middle East: Given the wide array of destinations for Middle Eastern carriers, we can see the decline was delayed until April but was more severe (78%) than the phased declines in Asia and Europe. That said, because of proactive policies (deep airline cleaning and checking passenger temperatures and symptoms) we only saw a 79% decline in volume.

Source: Hotel Connections; April based on MTD projections

North America (excluding Mexico as it waited to shut down society more closely aligned with Latin America. We do not wish to skew our dataset and therefore will include Mexico with Latin America): Covid-19’s follow-the-sun progression has resulted in a North American decline starting in April, with carriers in the commercial space (long haul, short haul, and regional) immediately cancelling 75% of their layovers on average.

Source: Hotel Connections; April based on MTD projections

Latin America (+Mexico): Mexico and Latin America have acted much later in applying restrictions. In Mexico’s case they waited until a few days ago to start shutting down society. Accordingly we are just seeing the majority of reductions in April (although some countries like Chile, Argentina, and Brazil eliminated long haul flights into places like Europe and US quicker).

Source: Hotel Connections; April based on MTD projections

Cargo/Charter Carriers: While interestingly, with cargo delivery as vital as ever and longtime passenger clients having converted flights to cargo, we are seeing cargo relatively flat. For clients that converted planes for cargo we moved these planes from passenger data to cargo.

Source: Hotel Connections; April based on MTD projections

Private Aviation: We see a relatively smaller decline of 42% in the private aviation space given the massive reduction in commercial flying has forced corporations to resort to flying private.

Source: Hotel Connections; April based on MTD projections

Operating Moves to Drive Savings and Efficiencies for Partners

We have always said that our clients are our lifeblood and we treat them as part of the HC Family. During this time, we have been working closely with all of our airline partners to face the operational challenges posed by Covid-19.  Of course, the initial wind down of operations was critical to minimize crew impact and additional cost. Now we are working closely with our partners on the reset that we are starting to see in Asia and are anticipating in Europe, Middle East, North America and then Latin America in the coming weeks/months. Now is the time to set the groundwork and give a significant financial advantage for years to come by making the correct moves.

Further during this pandemic, one of the critical tasks that we have focused on is the safety of the crews. Since early this year, we have instituted measures to ensure the safety of airline crewmembers and continued layover operations. We have created an HC approved hotel list to ensure that each of our hotel partners comply with our Covid Hotel Approval process. This process covers:

  • the property remains open and will continue to be
  • the property is following enhanced CDC recommended cleaning practices in the common areas and crew guest rooms
  • food and beverage (“F&B”) options are available on site
  • F&B preparation safely
  • transportation is available in timely manner
  • transportation is properly cleaned
  • transportation dedicated to just our crews and driver is following safety steps (gloves, masks, social distancing from crew)
  • if the property has been exposed or is housing infected individuals: how they are being isolated or managed and how notice is being provided to other guests
  • lists of alternate accommodations in case of emergency that comply with these minimum standards

Additionally, State and local imposed travel and lodging restrictions have necessitated full cooperation between Hotel Connections, our clients, and now governmental agencies. One client for example in Europe, Alitalia (we only break this confidential bond as Alitalia decided to publicly acknowledge our heroics on LinkedIn) has been transporting medical cargo from China to their severely impacted country in their country's fight against Covid-19.  China had imposed several travel restrictions, making this flight almost impossible for Alitalia to complete as China was restricting their time on ground in addition to other regulations. Alitalia called us late Friday evening and asked if we could help. We were able to secure a hotel for the crew in Russia, despite sanctions that prohibited this layover, by getting a local waiver for this emergency flight. In the end we were then able to open back up the air bridge that was delivering millions of much needed supplies, protective medical equipment, and ventilators to the people of Italy. I am very proud of our team and we decided to donate our commission back to Italy for their fight against Covid-19 for not only this flight but for all of the Italian air bridge flights that we managed. This is not to boast but to challenge other businesses to do the same, as we are all in this together!

For one of our large cargo clients that is absolutely critical in the air bridge to bring supplies to this country (and is often the praise of the President of the United States on TV and twitter) they had a situation where they had crew on the ground, but were unable to provide them lodging at their incumbent hotel due to mandated hotel closures from the City of Miami after the County closed all hotels. Again, this fell over a weekend and it was about to jeopardize their entire operation as Miami is a critical market for them. With one phone call to Mayor Gimenez we were able to have the ordinance modified to not only exempt our crews but all airline crews. We did something similar for other clients in 5 other locations and 2 other States.

A few airlines with no former partnership with HC reached out for help as they were flying to new regions that they did not know. Given rampant hotel closures and travel restrictions, they asked us for help. Whether it was an airline (that was actually the client of a competitor that could not manage to secure a hotel) flying for the US State Department to repatriate US citizens, where we jumped in and secured the rooms to get the US citizens home, or a commercial airline that had not previously flown cargo and needed help to get medical supplies, we came through.

The Changing Hotel Landscape

The impact of Covid-19 has also been strongly felt by hotels as sweeping hotel closures and decreased demand have drastically changed the hotel landscape. These changing market conditions have led many hotels to furlough and fire many of their operational staff, heavily impacting their front desk and reservation departments. What we are now seeing is that many hotels are moving their management positions (directors of sales and general managers) to handle day-to-day operations. In response, we have had to focus on retraining hotel operators on our standard processes for managing airline crew. Day of operations processes will continue to be on our radar as hotels come back online and begin refilling positions that are currently on leave.

In addition to hotel closures, we are seeing consolidation from hotel management companies. In markets where a management company may have several hotels, they are moving the bulk of their business in the market to a single property, which is typically the higher quality property in their portfolio.

From a contract standpoint, we are seeing that hotels are very willing to negotiate on key contract terms (rate, duration rules, room caps) but are pushing back on modified payment terms as they are concerned with being paid on time. What this indicates is that if airlines are willing to adhere to standard payment terms, there are great opportunities for savings in the market.

In that vein, we have used this time to renegotiate all of our client’s current contracts both during this period and for the next few years.  From a great lesson we learned in the 2008 crisis, airlines that were proactive during that period benefited for almost a decade for their strategic planning. Therefore, we have partnered with each of our airline partners to put together a custom plan in order to reduce spending for them in the short and long term. In total, we have reduced our clients’ hotel spend by: 


Crisis Trends

First-hand insight into how the global crisis has affected airline layovers and best practices in this environment to come out stronger.


Subscribe Here!

Recent Posts

Posts by Tag