With COVID19 wreaking havoc worldwide, impacting virtually every aspect of life, it comes as no surprise that the airline industry has been one of the hardest hit business sectors. As the pandemic ebbs and flows around the globe, scores of air carriers are in survival mode as they try to hold on until people start flying again. Dozens of airlines grounded most or all of their fleet for a period of weeks earlier this year, and even now in late summer airline schedules are not much more than a skeleton of what they looked like a year ago.
Tens of thousands of U.S. airline employees have taken voluntary furlough or early retirement offers, while many who took what they anticipated to be voluntary time off may not ever return to the industry they loved.
Last month’s reported second-quarter losses from the largest U.S. carriers were absolutely startling:
- United Airlines – lost $1.6 billion
- American Airlines – lost $2.1 billion
- Delta Air Lines – lost $5.7 billion
- Southwest Airlines – lost $915 million
And as expected, smaller but still substantial airlines also lost vast sums of money. JetBlue reported a net loss of $450 million, Spirit Airlines lost $364 million and Alaska Air, $230 million. There is clearly no end in sight to the financially bleeding as the coronavirus continues its spread throughout the U.S. Where airlines have been slowly adding capacity during the summer months, after reaching a plateau of sorts with slightly increased traffic but still below expectations, many carriers have already announced that they will be reducing flights again during the fall of this year. And due to the failure of mitigating the virus in the U.S., international travel to and from North America with the exception of Canada has been reduced to a trickle.
Industry experts are in widespread agreement that the world airline industry will take years to recover from the COVID19 devastation of 2020, and that those airlines that do survive will have smaller fleets and serve fewer destinations.
According to Gary Kelly, chairman and CEO of Southwest Airlines, “our company is in intensive care”. JetBlue CEO Robin Hayes said, the industry’s “days of reckoning” are upon us. While these and most other airlines will find a way to survive and hopefully prosper again in the future, the industry has been forever altered by a virus that no one had even heard of a few short months ago.
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