To say that airlines in 2020 witnessed turmoil would be an understatement. In what is aviation’s most turbulent year, airlines have collectively lost $120 billion and counting. The losses are expected to worsen. From the beginning of the year till date, around fifty airlines have shut shop.
Many others have continued only by virtue of being propped up by government bailouts which aggregate to $173 billion. And with the continuing coronavirus pandemic, the industry continues to fly in the eye of a storm. Even with the vaccine on the horizon, risks abound. Precautions must be taken. The flight ahead is forecast to be extremely turbulent.
The coronavirus impact: All hopes are pinned on the vaccine and on domestic demand reviving
The coronavirus epidemic continues to haunt travellers. It is not the first time the system has witnessed a shock. But the scale and spread of the virus has been unlike anything seen before. To give an idea of the demand fallout consider these statistics:
- 1991 Gulf War: 7 percent–9 percent reduction in passenger demand
- 2001: 9/11 & US Recession: 12 percent reduction in some markets and a host of airline bankruptcies
- 2003: SARS: 20 percent decline in demand in Hong Kong (and peak demand declined up to 50 percent)
- 2004: Indian ocean earthquake/tsunami: up to 35 percent reduction in demand for Bali & surroundings
- 2010: Eyjafjallajokull – volcanic eruption: 20-30 percent reduction in demand
- 2020: Corona Virus – demand decline estimated to be up to 60 percent and counting