A Crisis Like No Other

What Makes the Covid Crisis Different From Past Airline Crises?

Pushing Back: Inside the Issue

Crises have wracked the airline industry almost since its inception. Wars, diseases, economic recessions and depressions, jet fuel price spikes — the list is almost endless and illustrates an industry almost uniquely prone to exogenous shocks. The Covid-19 pandemic started as a crisis like no other, affecting airlines in every corner of the world. A "pancession," as we called it in an Airline Weekly issue. And almost two years in, the pandemic is proving its difference in a new way.

Unlike past exogenous shocks, the Covid pandemic will be easier for airlines to climb out of. First, the global economy has shaken off its initial shock and is back to growing. Second, airlines took the painful but necessary steps early in the crisis to reduce headcount and costs, and to rationalize their networks and fleets. Governments — not all, but many — stepped in with support. These factors leave airlines in a good position to meet demand as it starts to return. Boeing upped its 20-year aerospace forecast to $9 trillion this year from $8.5 trillion last year, and expects the recovery to begin accelerating pretty quickly from 2023. Lessors are similarly bullish about the industry's long-term growth.

That's the good news. The bad news, of course, is that the near-term looks less rosy, as business travel remains depressed and travel restrictions persist. The yearend holidays remain strong, though, and airline leaders now expect the first quarter of next year to mark a fuller recovery.

The Airline Weekly Lounge Podcast

This week in the Lounge, Edward Russell and Madhu Unnikrishnan chew over why Australia’s competition regulator denied Qantas and Japan Airlines a joint venture. Will Fly Play buck the odds and make low-cost longhaul work? And, with gratuitous references to unicorns, Sasquatches, white whales, and a menagerie other mythical animals, the team considers Boeing’s $9 trillion aerospace outlook. For a full archive of the podcast, go here. A new episode drops every week.