Covid-19 really came on like a tsunami. Here is what the US airline industry looked like through the year-end 2019. Just another year of growth and the future looked sunny and bright.
Traffic was strong all the way through the year-end.
Obviously, we expect to see a cliff drop come the end of the 1Q20. The purpose of sharing the year-end 2019 data is to help understand the height the industry is falling from. The magnitude of what is happening now is shocking. The damage is breath-taking.
While these are US data, the same thing is happening across the globe. No airline or travel market is immune. In China, where the virus got started, traffic dropped over 80%. As BARRON’S says, “This is as bad as any situation airlines have faced.” But China has already been through the worst of it and is coming out of the air travel slump. It appears China is doing a V-recovery in air travel. BARRON’s goes on to note: “Capacity dropped 70% at its nadir and is up 100% since then. Capacity is still off about 45% from normal“. Moreover, China is shipping experts and supplies to Italy to help them recover from the virus’ impact. Fellow EU nations have not been as helpful it is reported.
It is too soon to think that countries other than China are through the worst of it. But there are big lessons already learned. We live on a small planet. What each of us does, can and will impact those around us. We have learned the value of “social distancing” to prevent virus transmission. When the need for “social distancing” is over, it would a great lesson learned that we are all much closer to each other than we ever thought possible.