The coronavirus pandemic has had a serious impact on the airline industry because of travel restrictions. This came as some airlines were already in a bad situation before the outbreak of covid. There has also been a recession in demand among travelers.
Substantial declines in the number of passengers led to planes flying empty from the airports. Moreover, there has been a cancellation of flights. All these occurrences massively decreased the earnings for the airlines.
Several airlines were compelled to declare bankruptcy or lay off workers. Some tried to evade paying back suspended trips to curtail their losses. Airport operators and airliner manufacturers also laid off their employees.
Reports have indicated that Latam, which is the largest airline in Latin America declared being bankrupt last year In may. Further, Aeromexico, which is another main transport in Latin America, reported bankruptcy in June. This is an indication of how hard the industry was hit.
Let’s take a look at the major facts and statistics for the aviation industry. This will give you an idea of how the whole industry has been affected by the prolonged pandemic. You’ll also realize the percentage of the industry impacted greatly.
Overview of Airline Industry COVID19 Impact Statistics
- Last year the global number of expected flights reduced by below 50 percent compared to 2019.
- In the U.S. a 14 billion dollar covid aid was approved for the airlines.
- Two main U.S. airlines were set to vaccinate employees from March.
- Airlines announced a reintroduction of full beverage services while maintaining safety measures.
- The most affected American Airlines with flights to and from China are American, Delta, and United airlines.
- There has been a decline in aviation-aided jobs.
- American passenger airlines turned to cargo.
1. Last year the global number of expected flights reduced by less than 50 percent compared to 2019.
According to a recent report, there was a serious fall in global air travel due to the pandemic. The decline was about 60% In 2020. This was a level last observed 18 years ago.
Nations around the world closed their borders. Moreover, they also restricted domestic travel to help fight the covid 19 outbreak. There was a cancellation of nearly every flight. This was to help curb the spread of coronavirus which has impacted the whole aviation industry worldwide.
Last year during early October, there was a reduction of scheduled flights globally. This was a drop when compared to October of the previous year.
(UN News; Statista)
2. In the U.S. a 14billion dollar covid-19 aid was approved for the airlines.
In February 2021 the American House committee approved a proposition to provide airlines 14 billion dollars. This is in payroll aid as a portion of a broader coronavirus relief package working its way via Congress. This is the third round of assistance for the hard-hit business.
The amount is to help extend the payroll support by six more months. Hence this move is saving over 20k jobs across the United and American Airlines.
3. Two main U.S. airlines were set to vaccinate employees from March.
The airlines were to start vaccinating their respective staff against covid. They were to use the newly authorized, single-dose of Johnson & Johnson vaccine. This was beginning in Chicago.
The United and American Airlines were set to give inoculation to their City workers during early March this year. American Airlines announced that its vaccines were being stocked by the Chicago Department of Public Health. This was for distribution at the Chicago O’Hare International Airport.
The United airlines’ CEO had earlier announced he wanted to make the vaccines mandatory for workers. And he encouraged other firms to do the same.
(CNBC; Travel Pulse)
4. Airlines announced a reintroduction of full beverage services as they maintain safety protocols.
American Airlines is planning to reintroduce the full beverage service from May. This is in every domestic premium cabin. Further, from June the services will comprise water, juice, and canned drinks.
This activity will commence in the major cabin. The well-being and safety of flight crew and clients onboard is the main emphasis for Americans. This is often the guiding policy for bringing back additional inflight services helpfully and carefully.
Hence, it ensures the customers and flight attendants feel comfortable and safe.
(Center for Aviation; Travel Pulse)
5. The most affected American Airlines with flights to and from China are American, Delta, and United airlines.
Early last year the United, American, and Delta airlines reported they were discontinuing service between China and U.S. This severely hindered service some hours before the issuance of fresh travel restrictions by Donald Trump’s administration. The airlines are the three most affected American airlines from China.
Delta airlines had over 15 flights of the scheduled flights not flown. United Airlines had more than 40 flights that weren’t flown. Additionally, American airlines had 70 canceled flights.
(New York Times; Cirium)
6. There has been a decline in aviation-aided jobs.
Lots of airline employees got ready for the economic problem which was coming in the following months. United States airlines warned over 70K workers that their careers were going to be at risk in October. This was the time when the terms were to end on a 25 billion dollar federal relief package.
The aid safeguards passenger carrier employees’ paychecks. The lack of a new assistance package and the trouble in the airline industry have left workers in limbo. The American cargo and passenger carriers employ nearly 700K people.
However, other jobs may also be at risk.
7. American passenger airlines turned to cargo
The need for air travel faded away with the onset of the pandemic. The passenger airlines turned to cargo to generate fractional earnings. That is for the airlines operating around the globe.
In the United States, the main passenger airlines opted to operate cargo flights. This is after drawing their attention away from freight in the previous year to increase revenue. Those from frequent flyer miles, credit card deals, and some extra general ancillary sales.
Covid has developed an opportunity for the airlines to garner a percentage of their missing earnings from their cargo tasks. However, those airlines are functioning to deliver a word of goodwill from the freight flights. And it’s through transferring essential medical equipment.
There are also disadvantages from only running cargo flights. The freight service is mostly one-directional. Thus the airlines are managing empty aircraft on one part of the trip.
(Centre for Aviation)
Summing It Up
Covid 19 pandemic is having a great impact on the airline industry. It has affected incoming revenues, airport workforce, air cargo demand, and passenger traffic. Even with these outcomes, It’s unlikely that we have glimpsed the end of the traveling via air.
Besides, with the post-pandemic, there will still be the desire and need to travel. There is also a rising focus placed on enhancing sustainability. Hence, this industry may see transformations in the post-covid era.
Frequently Asked Questions
What is the Impact of covid-19 on the American Airlines industry?
The Airlines have encountered several major impacts like the economic loss from the decline of the capacity of the flights. According to reports, the industry has been facing critique as to how it has been responding. For instance, the allegations of buying back shares in an attempt to boost the price.
Furthermore, there has been an extreme flight reduction. The need for air travel has plummeted markedly. This, therefore, means the airline has been compelled to cancel flights.
This reason is due to the flights that aren’t profitable anymore and also the travel restrictions. Furthermore, the airline industry has seen huge economic loss with the desire for government support. The airline business is capital intensive and It costs tons of cash to keep one operating.
This is a special matter at present as there is very little cash coming in. United States Airlines has seen its share prices reduce dramatically with the onset of covid. Thus showing serious impacts in the country.
The financial outcomes were disclosed in April and they were worse than predicted. This prompted the share price to decline and thus impacted the airline. It’s also projected to be worse in the second quarter.
What is the impact of the pandemic on the global airline industry?
The spread of the coronavirus has had an awful influence on the international airline industry. Numerous industry players have been in a serious struggle for survival as the number of passengers drop. It is estimated that coronavirus impact may cost the airline industry as much as over 200 billion dollars.
This is getting adjusted upwards with alarming frequency. The state of operation in the airline industry is remarkable. This has plummeted the senior management at airlines around the world into dangerous situations.
The future is very unpredictable as the duration of the travel restrictions continues to be more unclear. The airlines are already adopting drastic action to deal with the risk of failure. However, if mass disruption is extended past summer, there may be failures.
Government intervention will be needed to stop a bigger number of airlines from moving out of business. Therefore, the way governments react will also play an important role in determining how a nations’ airline industry will look like. That’s in the post- coronavirus period.