Comment: Airlines likely to be smaller post-COVID

GlobalData head of R&A and travel & tourism Nick Wyatt weighs in on how the virus could reshape the aviation industry forever

Dubai Airport
Dubai Airport

Announcements made over the last week or so point in one direction: airlines will become smaller – at least in the short-to-mid-term.

Some high-profile names have come to the conclusion that a leaner, more agile business is what is needed to help them navigate the turbulence expected over the next 2-3 years.

COVID-19 has hit the airline industry harder than almost any other and this has caused an unprecedented number of issues for carriers. All major airlines are analysing their operations in a bid to survive as they burn through cash at an alarming rate.

This will mean that they assess route viability thoroughly and make decisions based upon the findings of such analysis. This could lead to issues with connectivity, but as the UK showed in the case in Flybe, there are limits to the value that governments place on this.

In Q1 results announcements, Delta CEO Ed Bastian and American Airlines CEO Doug Parker both warned that their respective airlines may well be smaller in the future and in a letter to staff, British Airways appeared to cast doubt over whether it will ever resume operations at Gatwick. It is unlikely that these will be the last such announcements.

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