While the timing is unknown, the effects of the pandemic on passengers will ultimately fade, leaving the economic fallout with which airlines will have to contend.
Even the worst economic crisis in recent aviation history left travel with three times what remains today suggesting significant room for recovery until economic factors take hold
Comparisons with China suggest a strong rebound for domestic travel is possible once the COVID-19 is vanquished.
From within the aviation industry’s relative comfort in 2019, the shock of 2020 was impossible to predict. Airlines once or twice a decade have suffered an exogenous blow, but the realm of possibility for the start of this new decade never included a 97% drop in passengers. Only sixty days into the new decade the impossible became reality.
Our understanding of the possibilities of the future are invariably formed by the actualities of today. This becomes especially difficult as 2021 looms, and an industry designed to connect people across the globe deals with a deadly, contagious virus that has kept people apart.
With 2021 on the horizon, TAC Analysis looks at the potential inflection points coming that could indicate what the recovery for next year and beyond may look like.
Yet, just as the United States saw the first-ever 97% drop in air travel inside of a month, another first was witnessed by the industry. In the intervening five months from the trough of passenger decline, air travel has grown 1,000%.
This is hardly cause for celebration. The ten-fold increase in passengers reminds a collective industry that today’s recovery in the immediate term has little to do with economic trends, and everything to do with the willingness of a population to return to the skies amidst a global pandemic. At the same time, with the current expiration of the CARES Act, airlines are making painful, long term decisions to cut costs, putting into question whether capacity will even be available to enable a quick recovery.
Just as it was difficult to predict the effects of a pandemic from the relative comfort of normality, so too is it difficult to predict the new normal from within the depths of the crisis. Yet during our work at TAC Analysis and Visual Approach Analytics aggregating the collective sentiment into our decision tree model, one very important assumption was made about the new normal: This is not it.
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