COVID-19 Impacts on Airline Industry

Airline travel has been greatly affected by the recent COVID-19 virus. Just recently, Warren Buffet has just sold all of his airline stocks. Airline companies are struggling. As a matter of fact, they have been struggling even before COVID-19. Although the recent event may be the final blow that will bring major restructuring in this industry.

Personally, I don't see a world without planes. They are an essential part of the world dynamic. Flying is still the fastest way for people to move from one point to another for long-distance displacement, especially intercontinental.

Even though the current travel restrictions are putting the airline companies in trouble, the aviation industry will still thrive because it is needed.

What I can see happening out of this mess:

  1. Mergers - There might be a lot of merging in the airline industries. Weaker airline companies may be absorbed by the persistent ones. With fewer customers (low demand), ticket prices will drop, which will be a hardship for small and medium companies.
  2. Nationalization - This is a possibility. The Government may acquire the airline industry market share by providing a federal service controlled by the Government. Basically, we may see the government taking ownership of airline companies. The practice of government ownership of airlines, particularly flag carrier airlines, occurs in many countries. AIR America, anyone?

What can save the airline industry:

  1. New Technology - Innovation can bring a new desire for the customer to want to travel again. I'm not just talking about bigger and faster airplanes. We need efficient machines, running a new power source, and providing a different experience compared to the current arrangements.
  2. Promotions - Airlines will need to run free promotions in order to attract more customers. For example, running a free ride for senior citizens for a set period. Or a Kids ride free with parent ticket purchase type of deal would go along way to generate more demand.
  3. Scale down - Some of these airline companies have just gotten enormously too big and have been operating inefficiently. With a smaller fleet and optimized flight routes, the companies may be able to share the profit, at least until the public demand gets bigger again.

Either way, I don't see the aviation industry disappearing. Until someone invent teleportation services, we are bound to the physical displacement of ourselves using machines such as airplanes, especially for intercontinental travel.

As for myself, I'm still planning on visiting the world more. And by the way, I still love flying.

Previous post Celebrating Earth Day
Next post Five Questions to Ask an African living abroad, and Five to avoid at all cost