Airlines expected to shrink in post-COVID-19 era

Business

Airlines expected to shrink in post-COVID-19 era

Friday, May 08, 2020

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Like many other industries across the globe impacted by the COVID-19 pandemic, the airline industry is one of those that has been hard pressed from the impacts, resulting in an unprecedented number of issues for carriers.


In a recent GlobalData survey, all major airlines in analysing their operations have indicated that they are faced with numerous challenges as they burn through cash in a bid to survive from the reeling effects.


Nick Wyatt, head of Research & Analytics and Travel & Tourism at GlobalData, a data and analytics company, shared his view that some of the world's largest airlines will shrink based on the recent announcements from some entities as well as growing speculation.


“Airlines will become smaller – at least in the short-to-mid-term.

Some high-profile names have come to the conclusion that a leaner, more agile business is what will be needed to help them navigate the turbulence expected over the next two-three years,” he said.


Wyatt pointed out that In their first-quarter results, Delta's chief executive officer (CEO) Ed Bastian and American Airlines CEO Doug Parker both warned that their respective airlines may well be smaller in the future. Noting also that in a letter to staff, British Airways also appeared to cast doubt on whether it will ever resume operations at Gatwick.


“It is unlikely that these will be the last such announcements,” he added.


Recent forecast by the International Civil Aviation Organisation (ICAO) also revealed that airlines may be faced with up to 1.5 billion fewer international air travellers this year. By extension they also noted that international seat capacity could drop by almost three-quarters, resulting in a 273 billion-dollar loss compared to previously expected gross operating revenues.
In the region similar struggles are also being experienced by regional carriers as ports remain closed in several territories.


CARIBBEAN AIRLINES


Caribbean Airlines, in its response to changing times brought on by the pandemic, has also had to undertake new and creative measures geared at keeping business afloat and services ongoing.


The airline recently launched its cargo charter services to support supply chains within the region. This feature, it said, was launched to meet the growing demand for cargo uplift to a number of islands which are experiencing significantly reduced cargo capacity.


They also said that subject to regulatory approval of jurisdictions and airports, the cargo service will utilise the airline's fleet of Boeing 737 and ATR-72 aircrafts offering up to 18,000 pounds for the movement of essential goods to and from destinations, including, but not limited to, Antigua, Barbados, Curacao, Grenada, Guyana, Jamaica, Nassau, St Lucia, St Maarten, St Vincent, Suriname and Trinidad and Tobago.


Marklan Moseley, general manager of cargo at Caribbean Airlines, in a recent release said, “In these unprecedented times, our cargo operations are crucial to securing the urgent supply of essential goods within the Caribbean. We will continue to adapt our business in order to meet the evolving needs of customers.”

— Kellaray Miles


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