ECONOMIC IMPACT OF COVID-19 ON AIR TRAFFIC INDUSTRY: CHALLENGES IN CROATIA

Abstract

By the end of September, 2020 total worldwide number of Covid-19 infections has surpassed 34 million inhabitants, while the number of deaths caused by health pandemic crisis stands at more than one million. It’s predicted that the year 2020 will see about 10 percent drop in economic growth compared to the previous year. Different macroeconomic scientific and professional authors in their forecasts agree that the worse scenarios will be suffered by global and regional tourism industries together with air transport industry. The consequences of Covid-19 on air transport results in 2020 compared to results in the last three decades are analysed on four different levels - worldwide, European, South-East European and Croatian aviation achievements. Besides, the correlation between the global touristic and air carriers’ results in last three decades is considered in the paper with adequate conclusions. IATA monitors developments related to the Coronavirus outbreak, publishes industry statistics and analysis of COVID-19 impacts on the financial and traffic performance and produces outlook for the global air transport industry. According to its latest forecast, full-year 2020 traffic is expected to be down by 66% compared to 2019 while revenues are expected to fall by even more than demand. ICAO has prepared few models and analyses of final business results with different magnitudes on air transport industry recovery. Special attention and business details in the paper are devoted to the Croatian air transport situation in light of Covid-19 with conclusions, suggestions and proposals for future survival and development scenarios, including appropriate actions and measures as well as state, regional or local financial support. The activities and measures taken by Croatia Airlines can be characterized as an example of good practice in the conditions of the Covid-19 pandemic and are articulated as guidelines for the operations of regional airlines in the mentioned conditions.