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Opinion: The Airline Industry’s All-Consuming Coronavirus
I sat at my desk this morning trying to figure out what exactly I wanted to write about. Obviously, there is no shortage of material in the airline industry this week, and it’s as crazy of a time to be covering it as ever.
In just the past few weeks, markets have tumbled — airline stocks in particular. In the U.S. alone, shares of Southwest and Delta are down 30 percent or more, and trading as of mid-day Wednesday has American’s almost slashed in half.
Southwest Airlines CEO Gary Kelly said in an interview on CNBC that the fall in bookings that has followed the spread of the virus “has a 9/11-like feel.” And that’s for an airline that operates 97 percent of its flights in the domestic market.
While he didn’t provide any firm numbers on the changes Southwest had seen, United Airlines did reveal some yesterday that allow us to grasp the true scope of the problem. According to OneMileAtATime, United President Scott Kirby said that domestic net bookings — calculated as new bookings minus canceled bookings — has fallen 70 percent in recent days.
Those numbers seem almost apocalyptic at first glance. As United expects to lose 70 percent of revenue in April and significant portions of revenue in the months to follow, the future certainly looks grim. And that’s not even to mention the dozens of airlines based in China or the few significant carriers headquartered in Italy that have been hit even harder.
The degree to which the coronavirus has changed the airline industry and its outlook in the past two months is unprecedented. Just last year, airlines continued to post near-record profits even as some reeled from the grounding of the Boeing 737 MAX — a problem that, I would like to remind you, is still very much not solved.
I know, for the most part, this response is only natural, as fear and uncertainty continue to play a big role in investors’ and consumers’ behavior. Nobody yet knows if airlines at home or abroad will go bankrupt. Nobody yet knows how the virus will affect them or their families, or if it will at all.
And I realize the words I’ve used in this article — “unprecedented” or “almost apocalyptic” — only play into that narrative. But the events of the past few weeks are unlike anything we’ve ever seen in the modern era.
To solve the problems the virus has presented us with, the solution has seemed to be isolation. But airlines make money and operate because of the world today is more interconnected than ever.
Inherently, airlines’ missions have become somewhat at odds with public safety. And as much as I want to champion the airline industry and all it does for the world, it’s harder to be an advocate now than ever.
Nobody yet knows how long airlines and the talk surrounding them will continue to be centered around the coronavirus. Nor are we certain how long the industry will feel its effects.
Whether or not you choose to travel is up to you. But either way, as we’re being reminded day-in and day-out these days, don’t forget to use a little hand sanitizer and wash your hands whenever you get the chance.
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