Gediminas Ziemelis: Aviation Losses and Recovery

The novel coronavirus has affected airlines all around the globe. Lufthansa Group intends to ground 700 aircraft from their fleet of 755 aircraft. SIA Group plans to keep only nine aircraft in operation. United and American Airlines have asked for over $50 billion in funding and tens of billions of dollars in tax cuts amid coronavirus pandemic.

Governments around the world have begun devising airline assistance plans to soften the impact. Some governing bodies choose to exempt airlines from paying taxes until the situation improves, others subside job positions or nationalize carriers.

With project revenue losses for airlines in 2020 estimated to be around $252 billion, the future of the industry may look bleak. However, with financial aid packages and proper measures taken to control the spread of COVID-19, airlines are expected to recover in less than 2 years. Aviation analysts predict that traffic and revenue will recover in 3-6 months after a return “to a normal state of health.” If an economic recession starts, analysts predict an 18-month recovery period.