Impact of COVID-19 on the global airline industry: Hot Topic Brief - Issue 3

Impact of COVID-19 on the global airline industry: Hot Topic Brief - Issue 3

  • April 2020 •
  • 18 pages •
  • Report ID: 5892744 •
  • Format: PDF
Impact of COVID-19 on the global airline industry: Hot Topic Brief - Issue 3

COVID-19, commonly referred to as the Coronavirus, is dominating headlines the world over. No industry has seen a greater impact than airlines.

Key Highlights
- COVID-19 has now spread across the globe with over 1.9 million cases being reported. The spread of the virus has had a deleterious impact on the global airlines industry and many industry players are now in a serious fight for survival as passenger numbers plunge. IATA estimates that the COVID-19 impact could cost the industry as much as $314bn, a number subject to upward revision.
- Travel restrictions are being deployed as a key weapon in the war against COVID-19. Publicized bans and restrictions have decimated the airline industry, forcing mass groundings and leaving many airlines wrestling with a plethora of tough decisions.
- The state of play in the industry is unprecedented and has plunged senior management at airlines across the globe into uncharted waters. The future is extremely uncertain as the lengths of all travel restrictions remain very much unclear. Airlines are already taking drastic action to ward off the threat of failure, but if mass disruption is prolonged beyond summer, we will likely see failures and government intervention will be required to stop a greater number of airlines going out of business.
- This week has seen the impact of COVID-19 become more visible. Richard Branson warned that Virgin Atlantic will fail if government help is not secured and the billionaire even pledged his private luxury island as collateral as he seeks to secure a £500m loan. News was less positive for sister company Virgin Australia, which become that first country’s first major corporate casualty as it voluntarily entered administration after failing to secure a government loan. It must now seek out investors/buyers from administration.
- In the US, United yesterday (April 20) became the first major airline to quantify the pandemic’s impact as it announced a pre-tax loss for Q1 of $2.1bn. It is hard to envisage United’s rivals telling a different story when they announce their results in the coming days and weeks, showing just how vital the Trump administration’s support package is for the industry.

- This report provides insight into the current state of play, offers a look at potential future scenarios and assesses the actions that airlines can take to mitigate the impact of COVID-19.

Reasons to Buy
- Gain an overview of the current global COVID-19 situation
- Understand the impact that COVID-19 is having on the industry
- Explore future industry scenarios
- Assess possible mitigating actions
- Compare key industry players’ actions

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