It might take years for the airline industry to recover from COVID-19

when will airlines recover covid-19
Photo via Jorge Diaz/Flickr (CC BY SA 2.0)

The airline industry has been hit hard by COVID-19, and it’s taking longer than expected to recover. With less people traveling and airlines running at reduced capacity to comply with social distancing rules, the airline industry might not fully recuperate until 2024, according to a new report from the International Air Transport Association. So, how will airlines recover from COVID-19?

Though airlines started seeing an uptick in business in July and August, the increase is “barely visible,” according to IATA chief economist Brian Pearce. Air traffic in June was down 86.5% compared to June 2019. The IATA measured air traffic as the distance traveled by “revenue-generating” passengers.

In addition to a fear of traveling for one’s health, financial struggles as a result of the COVID-19 pandemic are preventing people from flying. Many businesses have slashed travel budgets in an effort to save money, and that has also affected the airline industry. On average, domestic flights are operating while only 62.9% full and international flights are only 38.9% full, according to the IATA.

The airline industry has been heavily affected by U.S. citizens. The U.S. is seeing a resurgence of coronavirus cases in many parts of the country, which is prolonging airline restrictions and citizens’ aversion to travel.

Now that the U.S. has extreme numbers of COVID cases, U.S. citizens are only permitted to travel to a handful of countries and have been banned by most of the European Union (for what it’s worth, some investors believe Chinese airlines are in a better position to recover more quickly than their American counterparts). Meanwhile, some airlines are banning people who refuse to wear masks—including Delta, which has put 240 people on its no-fly list.

“[The United States’] continued closure, particularly to international travel, is a significant drag on recovery,” the IATA said in a statement.

In an effort to woo customers, major U.S. airlines—including United, American, and Delta—have eliminated most of their ticket change fees in early September. “We’ve said before that we need to approach flexibility differently than this industry has in the past, and today’s announcement builds on that promise to ensure we’re offering industry-leading flexibility, space, and care to our customers,” Delta chief executive Ed Bastian said in a statement.

According to CNBC, the third quarter of 2020 was a debacle for the industry, as airlines posted losses of more than $10 billion. But American and Southwest seemed slightly optimistic that leisure bookings would begin rising.

Read more on traveling during the pandemic:

Sources: USA Today, CNN, Business Insider

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