Issue No. 764

The 2020 'Pancession'

Pushing Back: Inside This Issue

It’s a pandemic. It’s a recession. A "pancession?" By whatever name, the Covid-19 virus is destroying both lives and livelihoods. For airlines, it’s destroying both supply and demand. When will it end?

The Chinese domestic market offers glimmers of hope as carriers slowly restore flights, flights slowly fill with travelers, and travelers slowly return to top tourist sites. Signs of life are flickering in the Korean domestic market too. In Europe, leading low-cost carriers are moving beyond mere cash husbandry and contemplating strategies to win the future, even if that future involves deep discounting, new public health regulations, and even bans on selling middle seats. U.S. carriers, meanwhile, finalized arrangements for the federal aid they’ll need to meet payroll through September. Beyond that, some see a dark world of downsizing.

Downsizing would mean fewer workers. And it would also mean fewer planes, prompting more Boeing customers to cancel B737 MAX orders. Gol doesn’t want as many. Neither does the leasing giant GECAS. The aircraft market could weaken further if several major carriers fighting for life don’t make it — carriers like Norwegian, South African Airways, and Virgin Australia. Virgin Atlantic too, isn’t getting the support from London it claims to need.

Europe and the U.S., hoping the worst of the epidemic is over, are plotting a gradual reopening of their economies. But air travel won’t be among the first activities to revive. In fact, given the difficulties of social distancing at 30,000 feet, it might be one of the last. The entire airline business has thus become a game of who can hold their breath the longest before oxygen — in other words revenue — finally returns.  

That’s a sobering thought to begin first quarter earnings season, which kicks off this week. Delta will be among the first to detail the carnage.   


"We remain focused on doing what is right for the company for its long term health and to ensure we are in a good position to resume flying when the pandemic is over."

easyJet CEO Johan Lundgren

Upcoming Q1 Announcements

  • Delta: April 22
  • Aeromexico: April 22
  • Volaris: April 23
  • Southwest: April 28
  • Air China: April 29
  • Finnair: April 29
  • China Eastern: April 29
  • Lufthansa: April 30
  • Air Canada: May 4
  • Gol: May 4
  • Air France/KLM: May 7
  • IAG: May 7
  • Azul: May 7
  • SkyWest: May 7
  • Ryanair: May 18
  • Norwegian: May 28

Mondays Live With Skift Airline Weekly

Starting Mon., April 27, join Skift Airline Weekly editors every Monday morning at 11:30 a.m. Eastern for a discussion on the week's issue and what lies ahead for the airline industry. We'll take your questions live and will post the recorded session for subscribers to access all week. Stay tuned for registration details.


Gol, one of Boeing’s most important B737 MAX customers, reached an agreement with the manufacturer on compensation for the aircraft’s lengthy service disruption. The deal includes an unspecified amount of cash, and also the cancellation of 34 orders. Gol now…

State of the Unions

WestJet is laying off 1,700 pilots due to a collapse in demand, especially in cross-border traffic with the U.S. The layoffs, which WestJet called a “last resort,” will affect pilots at mainline, Swoop, and WestJet Encore, with 700 layoffs expected…

Landing Strip

The Transportation Department outlined its plans to disburse $10b in federal aid to U.S. airports. The airport industry successfully lobbied lawmakers to be included in the CARES Act, but the law left it to the executive branch agencies to disburse…


Who’s bothering to negotiate airline alliances at a time like this? Finnair is, with China’s Juneyao Airlines. The two announced a joint venture last week, covering the Shanghai-Helsinki route that both of them serve — when there’s no global pandemic,…


For Sabre, 80% of its revenues are directly tied to air traffic transaction volumes. You can then figure out just how difficult things are for the company right now. Gross bookings declined by 8%, 17% and 70% y/y, in January,…

Covid Crisis 2020

The assessments keep getting gloomier. IATA, for the fourth time since the Covid crisis started, gave an updated estimate of how much airline passenger revenue will likely disappear this year. On Feb. 20, it said $29b. On March 5, its…

Feature Story

Like a sand castle washed away in the high tides, everything U.S. airlines built over the past 10 years is suddenly gone. Their muscular balance sheets. Their world-leading profit margins. Their resilient business models. Now, as they survey the ruins,…