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Which airlines will soar after the pandemic?

07/08/2021| 6:29:58 PM| 中文

Big American and Chinese ones with large, increasingly virus-free domestic markets will return to profitability first.

The pandemic, with its lockdowns and travel bans, clobbered the world’s airlines. Revenues passenger kilometre, the industry’s common measure of performance, plummeted by 66% in 2020, compared with 2019. The International Air Transport Association (IATA), an industry body, expects them to remain 57% below pre-pandemic levels this year. 

The industry-wide picture conceals disparities, however. Some airlines are struggling despite having cut costs, slashed fleets and shored up balance-sheets with commercial loans. Others are brimming with confidence. Big American and Chinese ones with large, increasingly virus-free domestic markets will return to profitability first. Frugal low-cost carriers that went into the pandemic in the black are close behind. 

By contrast, airlines that depend on lucrative long-haul routes may struggle if, as seems almost inevitable, business travellers substitute Zoom for at least some flights. Regional companies in places still ravaged by covid-19, such as India or Latin America, look precarious. And the airspace between those losers and the industry’s winners is widening.

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TAGS: American Airlines | United Airlines | Air China | China Southern
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