As with any other industry, the air travel industry relies on its customers to fuel growth and strengthen profits. However, in a time when prolonged proximity and breathing recycled air has become dangerous, strongly discouraged, and even restricted by governments in some cases, how do airlines operate and survive?
The answer is by taking extreme measures. According to the Wall Street Journal, all airlines in the US have reduced their capacity to 50%. In addition, 62% of the world’s planes have been grounded due to the overall decrease in the necessity and desire for travel. Finally, many airlines, most notably the large international ones, laid-off workers in response to the pandemic. United and American have cut over 32,000 jobs in total since the pandemic began.
The pandemic sent airlines scrambling. Despite the reduction in plane capacity, staff cuts and other extreme measures taken thanks to the pandemic, nothing hurt airlines as much as the new, undesirable task of finding and paying the steep bills for grounded-plane parking. This is an in-demand and expensive commodity given that all airlines are simultaneously grounding most larger international planes according to Bloomberg. The specific conditions for parking planes long-term don’t help airline companies either: only dry, non-humid landscapes won’t endanger expensive hardware.
A few other headaches, according to Bloomberg, that come with grounding planes is paying for the fuel parked aircraft require to keep them stationary and not moving in the wind. Companies must also control animal infestations, including those by nesting birds, rodents, insects, etc. that could gather on or bite away at expensive hardware. Paying for constant technical checks to make sure that when the time comes planes will be ready to be flown again and that they will not pose any dangers is also expensive. This is all money being spent while little income is being generated.
An additional question airlines– specifically international ones– have faced due the pandemic is how can they survive when 86% of international travel is restricted?
International airlines, which normally depend on making the majority of their money from long-haul travel, have begun competing with budget airlines for control over popular domestic flight routes and, in the US, flights to nearby Mexico and the Caribbean. The downsizing of larger airlines and essentially turning them into budget airlines have hurt normal budget airlines by taking away their customers. Despite larger airlines taking domestic routes away from budget airlines, budget airlines have actually adapted to the pandemic better due to their already-small staffing and less-expensive-to-deal-with planes.
Ultimately the pandemic has squeezed the air travel industry. The National Bureau of Economic Research reports an 80% reduction in the industry’s income during the second quarter of 2020 as compared with the second quarter of 2019. Although this may seem like just a temporary decrease in air travel and airline profits, an overall reduction in travel may become permanent due to increases in both fear of traveling and an increase in people working remotely.
Airlines may have to make drastic permanent changes to their staffing and fleets, because who knows? The pandemic may have had a permanent effect on them.