- scale down
- go to the wall
- bankruptcies
Due to the coronavirus epidemic, we have seen big carriers scale down and a few smaller ones go to the wall. Bankruptcies and the end of service on some routes are sure to follow.
- early stage of reinstating passenger air service
- lockdown
- quarantine
- operating restrictions
- disruptions
- agility
- perilous
- recovery
In some regions of the world, carriers are in the early stages of reinstating passenger air service. Clearly, they are seeking way through various versions of financial chaos in an uncertain world of partial lockdowns, quarantines, operating restrictions and possible further disruptions. Survival looks to be a matter of cash, agility and luck
But while the immediate future is perilous, the events of the coming months or even couple of years say little about what recovery will eventually look like. For the airline industry as a whole, consider three key points.
One is the price of oil.
- for the foreseeable future
- key suppliers
- low demand for …
- faltering demand
Always an obsession with airline bosses, fuel will be cheap for the foreseeable future. The oil industry is characterized by geopolitics between key suppliers Saudi Arabia and Russia. Unfortunately, recession means low demand for goods, services like air travel, and commodities such as oil. Whatever the producers choose to do, fuel will be cheap even as demand falters.
Second is safety when travelling – and here, the signs are not good.
- development of a coronavirus vaccine
- remedy
- decade
- regardless of …
- take measures to protect
Don’t hold out hope for fast development of a coronavirus vaccine; talk of having such a remedy within a year to 18 months is coming from politicians and business people – not from scientists, whose experience points to decades. Regardless of the measures taken to protect people in airports and on board, the Covid-19 experience is going to leave many people afraid of travelling, except when they need to.
- risk aversion
- they will be reluctant to expect
- cautious
Risk aversion will be especially notable in business travel; companies will be reluctant to expect employee travel. Experience suggests that another pandemic will hit sooner rather than later, and remind everybody to be cautious.
Third, pure economics
- reluctance to travel for non-essential purposes
- debt fueled spending
- widespread unemployment
- job insecurity
It will reinforce reluctance to travel for non-essential purposes. The coming recession is already blowing away all nice-but-not-necessary debt-fuelled spending. Before the pandemic struck, consumer and corporate debt was already at alarming level. Now, widespread unemployment and job insecurity will only establish an instinct to save rather than spend.
- 0:46′ ban on …
- 2:48′ thin margin
- 3:03′ incite to buy
- 3:46′ lay off
- 4:04′ incur costs
- 5:08 it will take an awful lot of time
Inspired by ‘Has a Golden Age of Travel Passed’,flightglobal.com
AVIATION MARKET / AVIATION FUTURE