Airlines Get Pushed to Brink Again With Virus Decimating Demand

Just a month ago, airlines around the world began adding flights as national lockdowns eased and people craved an escape from hibernation. But as the travel season reaches what should be its annual peak, hopes for an industry rebound have been dashed by flareups of the pandemic in Asia, a deepening health crisis in the Americas, and the reimposition of flight curbs in Europe. As a result, the aviation world is becoming increasingly resigned to years of depressed demand as optimism about a quick rebound from the crisis is swept away.

The reversal is pushing airlines to rethink plans to restore their schedules and raises the prospect of a jump in bankruptcies. It’s also forcing a reassessment of just how long travel will take to return to normal, with the International Air Transport Association predicting that last year’s traffic probably won’t be matched until 2024, a year later than previously estimated. “The situation is deteriorating,” IATA Chief Economist Brian Pearce says. “Airlines are having to take on costs, but demand and revenues are not rising as quickly as was expected, so they’re still burning cash.”