Will Airlines be Hamstrung by a Great Depression Mindset Post-Covid?

In this week’s Airline Weekly Feature Story, Senior Analyst Jay Shabat asks the question: What could come next after this pandemic? The Covid pandemic is the worst crisis in commercial air transport’s century of history — that much is known. But there’s so much unknown, and airlines should be prepare for this uncertain future.

Take pandemics. Airlines are in the business of transporting people from one part of the world to another. They had long planned for pandemics, and have managed several — SARS, MERS, Ebola — in the last two decades. But a pandemic on the scale and the spread as quickly as Covid has was considered a possibility but not a high probability, Jonathan Keane, Accenture’s head of global aviation, said during today’s Airline Weekly Lounge Live. But some infectious-disease specialists have warned that we may be entering an age of pandemics, as climate change, urbanization, and population growth expose humanity to new pathogens.

Pandemics aren’t the least of it, though. Geopolitical tensions are rising. The U.S. and China were already in the process of “decoupling” economically before the pandemic. That trend has accelerated, and the rhetoric is becoming more heated. Deteriorating relations between the world’s two largest economies is something airlines will have to manage and plan for after the current pandemic subsides.

And what about other shocks to the system? Outlandish, but not impossible. Cyberterrorists could take down a country’s electrical grid or internet infrastructure, as Russia is alleged to have done to Estonia in 2007. Could these kinds of attacks become more common and far-reaching? Yes. Imagine if the reservations system in an entire country becomes inoperative.

In other words, although this pandemic is an unprecedented crisis, it may not be a freak occurrence. Airlines need to plan for a variety of scenarios that could imperil the industry. Above all, airlines are learning to be more flexible during this pandemic and will need to be nimble for whatever comes after, Keane noted.

But airlines need to continue investing, growing, and adapting for whatever comes next. This is not easy to do, when most airlines are focused on mere survival. To answer why, it’s worth quoting from this week’s Feature Story at length: