The destruction of the travel industry has been a sort of unspoken story in the Covid-19 crisis. In the early days of the pandemic, travel was a focus but as the crisis has drug on, travel has taken a backseat in the news. It really shouldn’t, airlines are in major trouble.
Closing the Hangar
In the past month, airlines have been major cancelations, travel restrictions, and a decrease in future bookings. Airlines aren’t just losing flights and passengers right now, they aren’t poised to recover in the future either. Many airlines have their aircraft parked around the world and some airlines like KLM, Air France, Qantas, Lufthansa and British Airways have accelerated their fleet retirements. KLM immediately phased out its 747s alongside Qantas, Lufthansa and British Airways. A380s, the world’s largest airline, is also seeing fleet reductions and retirements from a variety of airlines. Older models like the 757 and 767 have seen retirements from American Airlines and United.
Keep in mind that the airline industry has just come off a decade of spectacular growth where planes have been packed and new routes have been opened and flights added to deal with the demand, especially in Asia. However, all that growth has come into a landing with the current crisis nearly stopping most travel, especially international travel.
Airlines in Trouble
DJ’s Aviation has done a good job of keeping up with the latest service changes, closures, and staff layoffs in a variety of airlines around the world. This crisis has been particularly bad for European airlines that were already struggling. Below are some videos on how this crisis has hit the airline industry and what airlines are working on their own survival.
Airline Jobs and Bailouts
Obviously, with this kind of carnage, there are a variety of jobs at stake. Airlines are laying off employees and even ground crew are sitting idle. On Sunday, London’s Heathrow shut down one of its runways as there are not enough flights to operate both runways. Airports themselves are struggling with their own finances which could be catastrophic for the debt those airports carry. In the most recent bailout package from Congress, billions were allocated for the airlines to cover the losses from the crisis and more money is to come as the airlines march to Washington for a bailout. This has prompted calls from many, including Senator Elizabeth Warren, that those companies should freeze CEO pay and not buyback their own stock for a period of years. Over the last period of growth, airlines did not save cash but instead used the money to increase their own stock price. This resulted in the industry being cash poor during the crisis and needed yet another bailout from Congress. Ostensibly, this is to save airline jobs. Airlines employ millions of people from pilots and flight attendants to gate agents and customer service personnel.
The Future of Flight
The future of the airline industry is uncertain right now. The full damage won’t be obvious until the crisis is over and what companies are able to recover from this crisis won’t be known until at least the end of the year. There are bound to be mergers and bankruptcies in the industry out of this crisis, especially for those airlines with plenty of debt. It will be awhile before American’s feel safe enough to travel and while things will pick up once all the stay-at-home orders have been lifted, the travel industry is going to struggle for the foreseeable future putting many jobs at risk.