Posted on 03/06/2020 9:50:40 AM PST by ConservativeMind
The coronavirus outbreak’s effect on airlines threatens to become as severe as the blow dealt by the Great Recession.
Already, travel demand is dropping, and airlines are drastically reducing flight capacity while offering new waivers to passengers.
If the virus spreads more extensively, the plunge in air travel could amount to $113 billion in lost revenue for the world’s airlines, about one-fifth of their annual total, the International Air Transport Association (IATA) said Thursday. That’s on par with the effect of the 2008-09 recession and worse than the SARS outbreak in 2003.
“The turn of events as a result of COVID-19 is almost without precedent. In little over two months, the industry’s prospects in much of the world have taken a dramatic turn for the worse,” Alexandre de Juniac, IATA’s chief executive, said in a statement.
Airline stocks have fallen nearly 25% since the outbreak began, more than they did at a similar point in the SARS crisis when cases were confined mainly to Hong Kong and southern China.
Corporations are imposing bans on nonessential business travel for their employees, and major conferences and meetings are being canceled or postponed.
With corporate travelers a key source of airline profits, carriers are cutting operations and costs.
Delta Air Lines, the dominant carrier at Minneapolis-St. Paul International Airport, has reallocated dozens of widebody aircraft, typically reserved for long-haul flights, to snowbird routes, like MSP to Las Vegas and MSP to Phoenix.
“This has the potential to be the worst-ever incident to impact the aviation industry — bigger than SARS, bigger than 9/11 — with the potential to linger in consumer confidence for quite some time,” said John Grant, a senior analyst with OAG. “That’s because 20 years ago, the size of the aviation market was nowhere near as large as it is today.”
(Excerpt) Read more at startribune.com ...
Cattle car conditions are what keep me away add on the corona and a huge NOPE to air travel is in order
This is good news for Boeing. Their year long delay in delivering 737 MAX aircraft will have a lessened impact on the industry, so the damage payments should be lower.
BS. Some trips will obviously be cancelled. A majority will be rescheduled.
Nope. Most of the cancelled trips do not get rescheduled.
It’s like closing down a coffee shop. Those cups of coffee not sold will not be reordered.
More seat options and upgrade opportunities for me!
Also the club is less crowded.
Gas is getting cheap. Drive instead. I hate air travel now. It has become horrible. Even first class sucks now.
on the bright side, the Boeing 737-Max should be ready to fly again when this all shakes out...….
I quit flying a LONG time ago and do not have plans to start back up.
The very low fuel prices are going to help. I really think the next 5-8 weeks will be tough. I bet our economy will recover quicker than many people believe.
They’ll go bankrupt and be bailed out by the feds.
This is not an exaggeration of a joke. The airlines are facing major economic headwinds. For 10 straight years, the airlines have enjoyed profitability. For pilots, we may see furloughs. Something that has not hit the industry in a while. Pilots get paid for when they fly. Period. The next few months will be interesting. The CEO of Southwest is already raising the warning flag.
Need to fly to Orlando in a few weeks, not complaining one bit about the lower prices.
I fly Delta; I traveled Monday and Tuesday of this week for work, the flights I was on were pretty crowded, not sold out, but not that many open seats, and not many upgrades.
I flew Southwest last Sunday. The plane was completely full.
>>not that many open seats, and not many upgrades.<<
I am not seeing that yet but a man can hope.
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