US Airlines face the end of Business Travel: Impact of Corona Virus

US Airlines Faces the Fatal Loss

US Airlines Faces the Fatal Loss
US Airlines Faces the Fatal Loss

U.S. airlines hit hard by the fatal loss of their passengers during this noble COVID-19 pandemic are facing a once-unthinkable scenario. This crisis will shrink much of the corporate flying they’ve relied on for decades to prop up profits.

This is one of the adverse cases where the whole Airline industry will be permanently damaged due to this COVID virus and what we lost now is gone, and will never come back. “It is likely that business travel will never return to pre-COVID levels,” said Adam Pilarski, senior vice president at Avitas, an aviation consultant.”

“I don’t think we’ll ever get back entirely to where we were in 2019 on the volume of business traffic,” Bastian said July 14 after the company reported an adjusted quarterly loss of $2.8 billion, a record. United Airlines unveils its results on Tuesday, supported by Southwest Airlines and American Airlines on Thursday.

Bruno Despujol  Stated that this situation will remain

Bruno Despujol  Stated that this situation will remain
Bruno Despujol  Stated that this situation will remain

Even for the next 18 to 24 months, the business travel will remain as low to 25% with respect to the pre-pandemic levels and this may stay down by as much as half too, said Bruno Despujol, a partner at consultant Oliver Wyman. 

“We’re pretty much locked down right now,” Berger said. “We’re not doing much travel — really rare. Now, I’m starting to get worried if we’re going to do much travel in Q1” of next year.

Job-cutting at the airlines helped them to push those improvements, and some carriers predict the eventual return of their cash-cow customers.

“We believe business travel will come back and come back strong as ever,” stated Andrew Nocella, United’s chief commercial officer. “But it will take about 6to 12 months to work through the system once a vaccine or treatment becomes widely available.”

Warren Buffet On this Loss

Warren Buffet On this Airline Loss
Warren Buffet On this Airline Loss

Warren Buffett the most profound investor, who turned back to airline investing in 2016 after years of shunning the stocks, exited his stakes in American, Delta, Southwest, and United earlier this year as the novel coronavirus caused a collapse in flying.

“The world changed for airlines,” Buffett told Berkshire Hathaway investors in May.

Enhanced video conversations or appointments further reduces the chances of returning to the heyday of corporate flying as companies look at travel budgets as ripe for cuts, said Eric Bernardini, a managing director at consultant AlixPartners.

“It won’t replace the need to go visit your customer, but there will be an impact on how many people are going to travel and how often,’ Eric Bernardini stated, a managing director at consultant AlixPartners.

“It won’t replace the need to go visit your customer, but there will be an impact on how many people are going to travel and how often,’ he added.

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