Q – We keep hearing references on the news to how hard the airline industry has been hit hard around the world. How bad has it been and will they recover?
A – There was one day in March where it was calculated that 61% of the US Airline fleet was in lockdown somewhere at a desert airfield in Arizona, New Mexico, and similar locations. (Actually, we wonder if there really are “similar” locations)
This year, the world’s Airlines have, according to the IATA, lost in the range of $118 Billion. But 2021 is also expected to show losses that exceed $39 Billion. Many of these airlines receive government subsidies as they are seen as essential industries that support the tourism sector in each country. US Airlines have been complaining for years that they are forced to compete with airlines that receive major infusions of cash from their governments.
The sense seems to be that most of the major names will survive but that we will continue to see consolidation in the industry. Churchill & Turen has long proposed the merging of our three largest US Carriers to something called, perhaps, “AmDelighted” Airlines. We are also seeing a worldwide shortage of pilots that should begin impacting international air travel in 2023 and 2024. How this shortage will evolve is unknown but it is a limit to the growth plans of many international carriers.
