Global airline industry facing ‘terminal decline’
Research and analysis firm GlobalData has offered a stark warning, saying that the industry is at a crossroads
According to the firm’s figures, in the US alone, 157.7 million domestic trips were made by air last year, making it the second biggest global market after China (which accounted for 517.2 million domestic trips). Considering the scale at which flights have been cancelled during the Covid-19 pandemic, the toughest industry would have difficulty absorbing such impacts – and GlobalData warns that such a scale back is ‘not sustainable for very long’.
Indeed, elsewhere in the world, easyJet has grounded its entire fleet, Air Canada has furloughed over 15,000 staff, British Airways has ceased all operations at Gatwick and American Airlines has requested billions in government support.
“Which way the industry goes from here remains to be seen, but government action, or in some cases a lack thereof, will be a key determinant,” said Nick Wyatt, Global Data’s Head of R&A and Travel & Tourism. “The full force of Covid-19 is now being felt on a global scale and we’ve reached a critical junction with even the US domestic industry seeing waves of flight suspensions.
“These are just a select few examples and such actions are not a coincidence. The industry is already approaching terminal decline in just a few weeks of this crisis unfolding, and governments need to act before it’s too late. Some are now acting with a sense of urgency, but too many remain too inactive. A crossroads has been reached and a wrong turn now will have far-reaching consequences for some of the world's most well-known and popular airline brands.”
This pandemic has shown just how fragile the ecosystem of business and industry really is, and how devastating the ripple effects from such a disaster can be. However things look when the dust finally settles, it is inarguable that a massive paradigm shift is underway – and whoever is left standing afterwards will need to make some tough and potentially radical choices if future disasters are to be avoided.