Issue No. 818

Could the Pandemic End Air Transport Liberalization?

Governments are looking inward and becoming more protectionist in response to the pandemic

Pushing Back: Inside the Issue

Brian Pearce has been IATA's chief economist since 2004, and in that time he's seen his share of exogenous shocks to the industry: SARS, MERS, the global financial crisis, the historic spike in oil prices, and now Covid-19. The industry has weathered all of them, but the breadth and scale of this pandemic has left no almost no airline unscathed. And governments have responded, many stepping up with financial support for the industry. But what will happen after? Pearce notes in this week's Feature Story that more governments are turning inward and becoming increasingly protectionist. That doesn't bode well for an industry that by its definition is global. It especially doesn't bode well for future consolidation or liberalization. And just how profitable was the industry before the pandemic?

Elsewhere in this issue, even though Norse Atlantic reached an agreement with the largest U.S. flight attendants union, pilots unions remain skeptical. Fallout continues after the Belarus hijacking incident, with governments moving quickly to ban flights from that country and to bar their airlines from overflying Belarus. This raises concerns that air transport and safety are becoming politicized and that the tit-for-tat could escalate. Are U.S. ultra-low-cost carriers best positioned to emerge from the crisis? Opinions are split. Iberia is returning aircraft to its fleet and re-converting some "preighters" back to passenger aircraft — perhaps a sign that travel demand is returning.

Meanwhile, Covid-19 has shown its not done with us. While vaccination rates in Europe and North America climb and societies return to normal, infections elsewhere are rising. Countries that were standouts early in the pandemic — Uruguay, Vietnam, and Japan, for example — are grappling with new surges. Disturbing new variants continue to evolve. While U.S. airline CEOs are bullish about the potential return of business travel, it's becoming increasingly clear that globally, this will be a second lost year for the airline industry.


"I think the volumes of domestic [business] travel 12 months forward are actually going to be even higher than the domestic volume we saw in 2019 alone because there is such a demand.”

Delta CEO Ed Bastian on the surge in U.S. business travel could begin as soon as July.

The Airline Weekly Lounge Podcast

New episodes drop every week and are available wherever you get your podcasts and on In the latest podcast, Edward "Ned" Russell and Madhu Unnikrishnan debate whether European airlines face another lost summer, and why is there so much merger talk in Brazil? Listen to the episode.

Weekly Skies

Europeans may be flocking to Mediterranean beaches for getaways delayed by the coronavirus pandemic, but — at least at Swiss International Air Lines — the rise in leisure bookings belies a broader travel recovery.

Sky Money

Fresh off the collapse of its proposed merger with Air Canada, Transat is making corporate moves that could boost its tour business. The company has acquired the remaining 30 percent stake in TraficTours Canada and taken full control of the…

State of the Unions

Norse Atlantic and the Association of Flight Attendants (AFA) recently reached a pre-hire agreement that sought to defuse concerns that the new carrier would undercut European and U.S. labor laws, but pilots unions remain skeptical about the airline and are…

Routes and Networks

Wizz Air is using the crisis to expand the breadth of its network in a push that its CEO József Váradi sees as both strengthening its business and accelerating its recovery. During its 2021 fiscal year that ended in March,…


Lufthansa Cargo ordered its 14th Boeing 777F, bringing its total cargo fleet up to 15 aircraft by the end fo the year. The new freighter will join Lufthansa's fleet before the end of the year, the German carrier said. "The…

Feature Story

The aftermath of the Covid-19 pandemic could usher in a new era of airline industry growth and innovation, provided governments don’t stand in the way of the trend towards liberalization and consolidation that were gaining in strength before the industry…