After corona, what will be left of the once unstoppable airline industry?
My favorite industry is bleeding. As the global lockdown continues, one of the hardest hit industries is aviation, and this week has seen a daily stream of grounded airlines announcing staff reductions of 50% or more.
As an avid traveler and self-confessed travel geek, this saddens me. I have followed the industry with childish fascination since my first flight decades ago, and I have been fortunate to travel the world extensively, if a bit less in recent years.
(According to my stats on flightmemory.com, in my lifetime of flying I’ve tracked 385,463 miles, equivalent to 1.6 times the distance to the moon.)
Used to change
Airlines have seen shakeups before, with waves of consolidation as state-owned carriers became gradually more competitive, some losing out, others gaining muscle. De-regulation across America and then Europe saw the rise of low-cost carriers, and more efficient aircraft saw fares decline as legacy airlines adapted to a new reality. The financial crisis was a hit to the industry, yes, but demand slowly but surely crept back, as fares continued their downward spiral.
We have grown accustomed to ever-growing demand, with airport and airlines a sure bet for the future. In a globalized world, how could demand go any other way than up?
Last year we saw a small blip in that, with Greta Thunberg’s “flight shame” actually catching on to a degree that people in Sweden were flying less, at least domestically. Was this a forbearer of a world where people would travel less in order to save the environment?
Towards a new normal
Once again, Corona changes everything. One thing is the current standstill, which is bad enough. Nobody has enough capital to endure this for much longer.
But when restrictions eventually ease and we’re out of the crisis, then what? Basic supply and demand stipulates that if people want to fly, there will be companies willing to fly them. But at what cost? Many businesses have now seen how well things can be run virtually – this could very well mean a permanently lower demand for business travel. That could change the industry drastically.
A new report predicts that after the crisis, only five major airlines will remain in Europe, with much higher fares than previously.
For years I have had a dream that it would be awesome to work in the airline industry. For the time being, however, I count myself fortunate that those ambitions have not yet come to life. I do hope that whatever survives will be able to flourish once again.