The Intelligence from The Economist Carriers and the disease: the airlines set for hard landings
May 18, 2020
Charles Reid, a travel industry expert, and Max Rodenbeck, the South Asia bureau chief for The Economist, share insightful commentary on the airline industry's pandemic struggles. They discuss how big, low-cost carriers are likely to survive while the market faces inevitable consolidation. Max highlights Kerala’s commendable COVID-19 response, showcasing effective strategies that outshine many Western nations. Additionally, they explore the future of Irish pubs in New York, adapting to new challenges while hoping to maintain their community charm.
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Airline Winners and Losers
- Low-cost carriers like Ryanair and Wizz, with strong finances, are positioned to survive the industry downturn.
- Airlines with weaker balance sheets, like Norwegian, will likely struggle or go bust.
Flag Carriers and Niche Airlines
- Flag carriers like Air France and Lufthansa are receiving bailouts, but with conditions like reduced short-haul flights.
- Smaller, niche carriers without strategic importance, like Flybe, are more vulnerable to collapse.
Post-Pandemic Airline Strategies
- Expect intense fare wars between low-cost and bailed-out airlines.
- Challenge state aid in court, if possible.