Issue No. 768

Covid's Paradox: The Losers are the Winners

Pushing Back: Inside This Issue

Airlines are just going to have to learn to live with the virus. Might there be a miracle vaccine before 2020 ends? Or a miracle cure? Not impossible. But also not the likeliest scenario. Some say the plague could linger as a public health crisis for years. Worryingly, even some countries that thought they had the pandemic under control, like South Korea, are now seeing a second wave of cases.

So airlines are pinning their scaled-back revival hopes on efforts to relieve traveler anxieties, on governments easing international travel restrictions, on better testing and tracing of the virus, and on segments of the population that are ready, willing, and able to travel despite the health risks and despite the crumbling world economy.

Four months since airlines began suspending flights to Wuhan, and two months since the pandemic caused much of the world to close its economies and borders, carriers are starting to add back flights again. They hope to salvage something from the peak summer season, in what some call the “Great Restart.” Italy, for one, an early victim of the virus, plans to reopen its borders to the rest of Europe next month. Europe’s Baltic states will create the world’s first post-crisis open travel zone, or “travel bubble.” Many Florida beaches are open again. Other places like the U.K. though, are taking a more cautious approach, imposing two-week quarantines on all air arrivals. Hawaii is sticking to its strict quarantine policy through the end of June at least.

For an intercontinental champion like Singapore Airlines, not having a domestic market could stall its recovery. But armed with a mountain of new capital, it’s sure it can survive through the crisis, and then thrive after it. Korea’s airlines are in a more precarious condition. Government cash transfusions will keep them alive. But when the time comes to finally leave the hospital, they’ll walk out in crutches.

In Brazil, where the virus is spreading rapidly, Azul sees no risk of running out of cash. In the U.S., meanwhile, Allegiant’s mouth is watering as it sees what’s happening to used aircraft prices. Ryanair sees opportunity in the aircraft market bust as well. Everyone agrees though: Demand for air travel won’t get back to 2019 levels anytime soon, and that means lots of unpleasant capacity cuts, cost cuts, pay cuts, and job cuts.


"In my own family, I have those who don’t want to come out… Others are ready to rumble looking to get back out and resume their lives. If one were to choose a 100-person sample, perhaps 40 to 50 would want to return to normal times, while the balance do not. We, as an airline, have to be able to cope with this level of uncertainty, be able to rightsize ourselves to service those 40 or 50 looking to rumble in the coming months and hopefully see the remaining 50 return later this year and in 2021."

Allegiant CEO Maurice Gallagher

Mondays With Skift Airline Weekly

Join Airline Weekly Editor Madhu Unnikrishnan and special guest Ty Osbaugh, who leads architecture firm Gensler's aviation practice, for a discussion on how airport architecture will evolve to handle this and future pandemics. Tune in this Monday at 11:30 a.m. Eastern for a livestream broadcast. Can't make it? We'll post a replay after the event every week at Registration is free for subscribers here, at


January-March (3 Months)

  • Singapore Airlines: -$522m/$24m*; -2%
  • Korean Air: -$581m/-$131m*; -2%
  • Asiana: -$461m/-$235m*; -18%
  • Jeju Air: -$83m; -28%
  • Azul: -$1.4b/-$57m*; 6%
  • Allegiant: -$33m/$33m*; 13%
  • Air Arabia: $19m; 7%
  • Chorus/Jazz: -$13m/$16m; 13%

October-December 2019 (3 Months)

  • El Al: -$59m; 0%

Net result in USD/*Net result excluding special items/ Operating margin

Weekly Skies

Already by Feb. 14, while reporting financial results for the final quarter of calendar year 2019, Singapore Airlines knew it had a virus problem. Covid-19 was already spreading through China. Singapore soon became the second country with recorded cases. But…


Former American CEO Bob Crandall told Bloomberg that he expects a “substantially smaller” airline industry for a long time to come. This crisis, in other words, is more than just a cyclical downturn. The central problem is that many people…

Sky Money

Boeing CEO David Calhoun, in an interview with NBC, caused a stir by suggesting a major U.S. airline would go out of business by the fall. “What did he just say?” was how the Wall Street Journal described the reaction…


Ryanair’s Michael O’Leary, in the category of ultra-LCC CEOs relatively bullish on recovery, told a Financial Times virtual summit last week that he’s in “advanced discussions” with Boeing about B737 MAX pricing. The talks include negotiations about how much compensation…

State of the Unions

Emirates, cutting 30k jobs? It’s a serious consideration, Bloomberg reported Sunday. It might also accelerate retirement of A380s, a plane that was ill-fit for the pre-crisis era, and even more ill-fit for the post-crisis era. The Gulf carrier, a symbol…

Landing Strip

During its morose Q1 earnings call, Air France/KLM said it was talking to Groupe ADP, the company that runs Paris Charles de Gaulle airport, about delaying its roughly $10b new terminal. The T4 project is currently scheduled to open in…


Both Sabre and Amadeus, in their Q1 earnings calls, used the term “severe” to describe the impact of the Covid crisis. Neither company sees much meaningful improvement in travel demand yet. Both, like airlines, are in liquidity preservation mode. And…


A group of Democratic U.S. senators introduced legislation to require airlines and travel agents to refund cancelled flights in cash, rather than with travel vouchers.The proposed legislation follows a Senate hearing last week during which Sen. Blumenthal of Connecticut, one…

Routes and Networks

There’s some welcome news on the network front as carriers begin building back their schedules for the upcoming summer. Lufthansa, Eurowings, and Swiss will have 106 destinations in Germany and Europe opened again by the end of June, not to…

Covid Crisis 2020

IATA’s now-routine weekly update for journalists covered several key topics, including the group’s opposition to quarantine measures for arriving airline passengers — the U.K. announced a 14-day quarantine just last week. IATA is separately still fighting with the E.U. over…

Feature Story

“We’re sure glad 2019 is over. 2020 has been so much better.”