What does Covid-19 Mean for Aviation?

I do not think there is an industry that is as heavily impacted by Covid-19 as aviation. Demand for service in any industry has not dropped so abruptly and drastically anywhere else. There literally is no demand for aviation at all right now. Aviation, in essence, brings people together. It is the purpose of getting on a plane. When there is a virus, in its early days, with no immunity or vaccines, the only real way to stop it is self-isolation, which is the bitter opposite of what aviation is about. 

No single major airline is making money right now. After banning flights to China, Iran, and Italy voluntarily, their demand took a hit, but it was one they could absorb. Once a travel ban is enacted with Europe, their demand is completely slashed. It was soon that airlines like Lufthansa group, United, Qantas started having more ticket refunds than bookings. There has been no single tanking of demand larger than this one in the history of aviation, not even after the September 11 attacks. 

If we were to tell someone in 2019 that in 2020, the world’s largest airline would only offer flights to Tokyo, Dallas, Miami, and London, they would think we are crazy. But that is reality. American Airlines, the world’s largest airline by BOTH fleet size and revenue, is only offering flights to these four locations. 

So, can the industry recover from this one? No one really thought recovery was possible after the September 11 attacks, but the industry did. If there is one thing that the industry has going for it, it is that jet fuel prices are low. Really low. Saudia Arabia, in efforts to outcompete Russia out of the oil market, is slashing its prices. This could certainly help airlines with their profit margins. If the industry had these prices without Covid-19, they would be celebrating. 

To predict what the outcome this will be is virtually impossible. This is an event never really seen before in aviation. Certainly, world governments will be the largest determining factor in what steps the industry must take next. Unfortunately, it is almost certain that layoffs will ensue.