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Sector Report

Q1 2020: How airlines are navigating the COVID-19 storm

  • Multi Asset
  • Industrials
  • Global

COVID-19 is wreaking havoc on the global airline industry, with dramatic reductions in scheduled flights, cost saving measures and executives forgoing compensation. Even with some government support available, the fate of the industry is still very much up in the air. Third Bridge Forum spoke to a range of specialists in Q1 2020 about the impact of the pandemic on this industry.

With airlines in “survival mode”, they face a USD 61bn cash burn in Q2 because of COVID-19, according to the International Air Transport Association (IATA). And the outlook for the rest of 2020 is just as gloomy: the IATA predicts that global passenger revenues will drop by USD 314bn, a 55% decline compared to 2019.2https://www.iata.org/en/pressroom/pr/2020-04-24-01/

This isn’t the first pandemic that airlines have battled against; the severe acute respiratory syndrome (SARS) and H1N1 (Swine flu) outbreaks were also testing times. However, the magnitude of, and pace of change triggered by, COVID-19 has been unprecedented. American Airlines cut its international capacity by 75% YoY from 16 March to 6 May, while United Airlines cut 85% of its international flights for April.  

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