Skift Take
The UK regional airline Flybe was the first airline casualty of coronavirus. It probably won't be the last.
As the panic over coronavirus ripples worldwide, airlines are facing their biggest challenge since the post-9/11 period. While many carriers should have strong enough balance sheets, or enough government support to get through it, some may not make it.
IATA, the industry trade group, said last week airlines could lose out on as much as $113 billion in revenue this year, up from an earlier estimate of $29 billion the group made about two weeks earlier. The difference: IATA realized the virus is no longer just an Asian problem, but a global one, affecting airlines everywhere. European airlines may lose about $44 billion from a prolonged slump, the group said, while U.S. and Canadian airlines might miss out on $21 billion.
"Bookings have fallen off a cliff over the last week and airlines sound gravely concerned about the outlook," Hunter Keay, an analyst at Wolfe Research who covers North American airlines, wrote in report. "Commentary from the airlines this week is extremely similar to what we heard in late 2008, like how business travel shut off like a faucet over a weekend."
It could get worse. For now, IATA seems to be betting airlines will keep flying, albeit with less capacity and pricing power. But there's another scenario in which some airlines simply park planes and wait this out. If no one wants to go anywhere, does it make sense to fly empty jets?
“In the near term, airlines will suffer, as they cope with severe demand shocks for leisure and business travel," said Madhu Unnikrishnan, editor of Skift Airline Weekly. "Although travel is beginning to recover in
