Airline companies to offer fewer options and higher fares after the novel coronavirus crisis
The airline and aviation industry in the United States of America is about to get smaller. And that’s bad news not only for airline employees but also for their passengers and consumers. Due to the novel coronavirus outbreak, airline traffic has plunged and might take some time to recover. Last week, the $50 billion aviation bailout was passed and this will enable airlines to be in the business and for the employees to stay on the job for the succeeding six months. Nevertheless, airline executives expect fewer flights and a decline in the demand for air travel.
According to Oscar Munoz and Scott Kirby, the CEO, and President of United Airlines respectively, if the business recovery is too slow, which is something that they are fearful about, then their airline company and its employees need to be smaller than what it is today. A leaner airline means that a huge percent of its 750,000 jobs in the industry won’t be back. Hundreds of aircraft will most probably stay grounded and it denotes a decline in capacity and higher fares. The majority of passengers enjoy booking low-cost seats but soon it might disappear.
The coronavirus outbreak shocks the airline industry but this is not the first time it experiences such a scenario. Remember the terrorist attack of 9/11, there were nine major airlines in the United States. To date, those airlines namely Northwest, US Airways, and Continental have been merged into four remaining major carriers. The biggest player now is United Airlines, Delta Airlines, Southwest Airlines, and American Airlines.
Today, almost no one is flying. The number of passengers as per the data gathered by the Transportation Security Administration fell at 93% in March 2020. Unfortunately, it will take a longer time for passenger traffic to recover and bring back into what it used to be even after the coronavirus outbreak. Following the terrorist attacks in 2001, the passenger traffic finally bounced back into normal in 2004. There’s also a great recession in the year 2008 and the passenger traffic was able to recover in 2013.
The novel coronavirus pandemic is said to be more severe if being compared to past downturns in the airline industry. It is expected that those industry leaders will undergo a long and painful recovery. The frequency of flights will be lessened to fill up a greater percentage of seats and that will lead to much higher fares than what the airline usually offers before this crisis happens.