Turbulent times for international passenger aviation

Airlines worldwide have been hit hard by the COVID-19 outbreak, with structural changes to the industry a certain long-term outcome once international travel resumes. Image: 06photo/Shutterstock
Senior Counsel of the New South Wales Bar at 6 St James’ Hall Chambers; Honorary Professor, ANU College of Law
Wednesday 29 April 2020

The COVID-19 pandemic has thrown commercial passenger aviation into disarray. Numerous airlines, including Virgin Australia, have either collapsed or are reliant upon massive government support as passenger numbers and routes have been slashed. The lack of any obvious fast pathway to return to unrestricted international passenger movement means that the problems are likely to become more, not less, severe. However, what are the commercial effects of the pandemic and how adequate are the protections offered by international legal frameworks?

Aviation in Australia and globally is an intensely competitive industry, with huge fixed costs, equally variable costs, and revenue highly susceptible to external threats. Previous events including oil price shocks and earlier pandemics, particularly the SARS virus, had lasting but relatively manageable effects upon aviation.

However, the rapid spread of COVID-19 led most nations to implement early, and severe, blocks on international passenger traffic – first from China, but increasingly from all States. Few countries now permit unrestricted travel, and even where borders remain open, passenger demand has dropped to almost zero. For example, in Australia, restrictions, notified to all aviation operators, include restrictions on entry being limited to Australian citizens, residents and immediate family members, all of whom are required to enter 14 days mandatory quarantine. Passenger departures from Australia are restricted for all Australian citizens and residents. Many Australian states and territories have locked their borders to all domestic travel.

The following statistics from the International Civil Aviation Organisation (ICAO) tell the story. Global passengers are expected to drop in the first half of 2020 by between 503 and 607 million, with global revenues expected to decline by up to US $135 billion.

Source: ICAO

These restrictions have been imposed within a structure of international law that foreshadowed, but perhaps did not anticipate the severity of, a global pandemic. The ICAO had in place relatively limited guidance in relation to pandemic outbreaks. That guidance plainly sought to balance the need for serious restrictions based on health requirements with the need to avoid devastating outcomes to the aviation industry. 

The starting point is that ICAO required that no contracting State should prevent an aircraft from calling at an international airport for health reasons other than those actions taken in accordance with the World Health Organisation (WHO) International Health Regulations (2005).

The lukewarm approach of ICAO to border control is typified by the following statement which remains current on the ICAO website:

WHO evidence provides some support for short-term measures that might interfere with international traffic at the early containment phase of an outbreak. However, longer-term restrictions are normally not effective once appropriate containment measures are in place.

Article 22 of the Convention on International Civil Aviation (the Chicago Convention) requires contracting States to expedite the navigation of aircraft and minimise delays caused by various issues including quarantine. However, Article 14 also provides that States must take effective measures to prevent the spread of communicable diseases. 

In the event that restrictions are capable of being lifted by mid-2020, it may be expected that the industry will survive, although with reduced numbers of operators after insolvencies.

ICAO relied heavily upon the WHO for guidance, including the protocol on Rapid Operations to Contain the Initial Emergence of Pandemic Influenza. That protocol included the possibility of movement restrictions and screening procedures. Although the WHO International Health Regulations do permit the imposition of quarantine, medical testing and treatment procedures and restrictions upon entry, they are intended to be temporary and the minimum required for control of the spread of disease. Curiously, and somewhat inconsistently with present circumstances, the WHO protocol expressly notes that “quarantine of large numbers of travellers is not likely to be justified, and may be difficult to implement”, and that “after the acute phase, it is also not likely to significantly prevent the spread of a major disease outbreak”. 

Airport closures are permitted, but only as a last resort. Importantly however, airspace should remain open.  

ICAO Annex 9, Chapter 2, paragraph 2.4 provides that it is a recommended practice that: 

…[C]ontracting States should not interrupt air transport for health reasons. In cases where, in exceptional circumstances, such service suspensions are under consideration, contracting States should first consult with the World Health Organisation and the health authorities of the State of occurrence of the disease before taking any decision as to the suspension of air transport services.

Generally, it appears that the restrictive procedures put in place by many States are consistent with the international instruments relating to international commercial aviation, despite the devastating effects those measures have had upon the aviation industry. 

States have also cooperated in the movement of so-called repatriation flights, outside ordinary scheduled flights. ICAO Secretary-General, Dr Fang Liu, expressly called upon all ICAO States to facilitate such flights and grant specific and swift authorisations, and that call has largely been heeded.

Given the large number of aircraft sitting idle at airports throughout the world, re-purposing passenger aircraft to carry urgent medical cargo has occurred. However, much of the cargo that is required are characterised as dangerous goods for the purposes of aviation law, and there are physical restrictions that must be complied with when using passenger aircraft fitted with seats to carry cargo. Repurposing passenger aircraft may also require approval from the registry State for the aircraft, and will involve discussions with the manufacturer, and possibly the State in which the aircraft was designed. 

In the longer term, the consequences of COVID-19 on aviation are very difficult to predict. In the event that restrictions are capable of being lifted by mid-2020, it may be expected that the industry will survive, although with reduced numbers of operators after insolvencies. In the longer term, some commentators suggest that the substantial shift to online meetings may reduce overall demand for air travel. Certainly, investment in virtual meeting technology, including the use of 3D and hologram technology, may increase dramatically. What is certain is that this event has significantly greater impact than the SARS epidemic, and is likely to have long term and structural changes in the passenger aviation industry. 

Updated:  10 August 2015/Responsible Officer:  College General Manager, ANU College of Law/Page Contact:  Law Marketing Team