Article

2020-05-11 Economy

The Global Airline Industry Is in Even Worse Shape Than You Think

[Mises] The economic impact of the COVID-19 pandemic has reached all productive sectors. The massive spread of the virus and social distancing measures have led to a dramatic decrease in economic activity.

The aviation industry, vital for tourism and business, has been hit hard. Investors and analysts state that this crisis could be worse than the one that followed the SARS outbreak in 2003 and the one after 9/11.

In this article we will describe how the future of airlines looks and explain how bad the current situation is.

THE IMPACT ON THE AIRLINE INDUSTRY
The airline industry necessarily requires intensive social contact and is directly affected by travel restrictions. Therefore, it has been one of the industries that has suffered most from NPIs.

According to a Wall Street Journal report, the financial implications of the canceled flights and routes are immense. Statistics from Flightradar24...show a 73 percent fall in the number of commercial flights per day from the beginning of March to the second half of April....

Layoffs as a result of the shutdowns are already happening. The WSJ report notes that Cathay Pacific and Asiana Airlines have asked thousands of employees to take unpaid leave. Hong Kong Airlines announced that it would lay off four hundred employees, and its president said that it was a matter of survival. According to a CNBC report, Delta Airlines cut capacity by 70 percent, United Airlines by 65 percent, and American Airlines by 50 percent. Norwegian, SAS, and Lufthansa suspended most of their operations, and similar cuts are expected in other airlines.

The CEO of American Airlines, Doug Parker, stated that this is the worst crisis in the history of the industry.

CONCLUSION
In a nutshell, the economic impact of the COVID-19 crisis on the aviation industry is enormous, and the situation could get even worse.

After all, it is not only about the ruin of the airlines or how they will manage to recover (if they survive). The aviation industry represents 3.6 percent of global GDP. Its crisis will have a wide impact on the economy as a whole.
Today the industry supports 65.5 million jobs worldwide, and 25 million of them are now at risk.
This is not the time to stop worrying about industries’ performance. The global recession could have more devastating effects than the virus itself, and the example of the airlines put things in perspective.

Posted by Clem 2020-05-11 00:00|| || Front Page|| [11136 views ] Top

#1 An effective and safe modification/alternative to recirculated air will be a major issue for the airlines.

There are plenty of other problems to solve, but that just seems like it's going to be a major factor in the general population being willing to chance flying again.

Another possibility is that passenger flight will go back to being a "boutique" industry.

Which will require a major, difficult transition for the business.

Posted by charger 2020-05-11 00:29|| 2020-05-11 00:29|| Front Page Top

#2 Cruise ships, Vegas, the NFL, and air travel, are they not essential industries? How can we possibly get along without them ?

Posted by Besoeker 2020-05-11 06:48|| 2020-05-11 06:48|| Front Page Top

#3 Virtual cruise ships, here we come

Posted by Lex 2020-05-11 07:05|| 2020-05-11 07:05|| Front Page Top

#4 Perhaps if they don't pack us into tighter and smaller seats at every opportunity....

Posted by Frank G 2020-05-11 07:10|| 2020-05-11 07:10|| Front Page Top

#5 A historically difficult industry in which every possible management mistake has been made and assiduously ignored.

Posted by M. Murcek 2020-05-11 08:10|| 2020-05-11 08:10|| Front Page Top

#6 How many of these 25 million jobs are in USA?

Posted by g(r)omgoru PB 2020-05-11 08:58|| 2020-05-11 08:58|| Front Page Top

#7 /\ C-Suite and the staff...that should do it...about 20.

Posted by Clem 2020-05-11 09:01|| 2020-05-11 09:01|| Front Page Top

#8 ^million?

Posted by g(r)omgoru PB 2020-05-11 09:04|| 2020-05-11 09:04|| Front Page Top

#9 I continue to notice a huge discrepancy between what is reported and what is happening in front of my own eyes. Flew to Florida for the weekend. Plane was full. Masks were required, but 30 min into the flight half of them were no longer being worn. People were enjoying the beaches and restaurants, though a disturbingly small percentage of them were open. Biggest problem I kept hearing about was business owners calling back workers who prefer unemployment for the time being.

Posted by Iblis 2020-05-11 10:01|| 2020-05-11 10:01|| Front Page Top

#10 How hard would it be to add an ultraviolet treatment to the cabin air circulation filtration? It’s old technology, after all, a common addition to household HVAC set-ups.

Posted by trailing wife 2020-05-11 12:51|| 2020-05-11 12:51|| Front Page Top

#11 ..you ask corporations that are still trying to figure out how to shoe horn more people into steerage and charge them extra for taking anything more on board than what they are wearing?

Posted by Procopius2k 2020-05-11 15:45|| 2020-05-11 15:45|| Front Page Top

#12 According to Wikipedia Howard Hughes had his 1954 Chrysler New Yorker equipped with an aircraft-grade air filtration system that took up the entire trunk. He was, famously, a germophobe, but maybe he was on the right track?

Posted by Spot 2020-05-11 17:07|| 2020-05-11 17:07|| Front Page Top

#13 Virtual cruise ships; may I suggest Silent Hunter 4?

Posted by swksvolFF 2020-05-11 20:39|| 2020-05-11 20:39|| Front Page Top

#14 Cause you can trust them.

Posted by Procopius2k 2020-05-11 21:48|| 2020-05-11 21:48|| Front Page Top

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