COVID-19 cases are surging in the USA, antibodies are now thought to only last 2-4 months, and the efficacy of a potential vaccination doubtful. Let’s imagine a world in which things do not get better. What will this pandemic mean for U.S. airline survival?
My Airline Pandemic Survival Predictions For A Worst-Case Scenario
I hate to be grim on a Friday afternoon, but let’s be honest. It is increasingly looking like COVID-19 is here to stay. And since we, the USA, botched the initial response, we are stuck with a problem of rolling economic calamity or rolling death counts and economic calamity. Whatever happens in November will not change that overnight.
Some scientists are linking COVID-19 to brain damage. Let’s imagine a more virulent strain this winter that impacts more people. Hospitals fill up. Death counts pile up. A subset of the population, mostly younger healthier people, is able to fight on with it. Business travel dies. Leisure travel remains restricted with limited air bubbles and a huge overall backwards step in our ability to freely travel between nations even internally within the United States.
Then what? What if 60-90% reduction in airline demand becomes the new norm, not a temporary problem?
Well, news this week suggests a path forward in which the strong become stronger and the weak band together or die. I think five major airlines would survive:
- Delta – the strongest airline in the USA today will survive as a stand-alone airline
- American + Alaska + JetBlue (the new American) – American would solidify its partnership with JetBlue and Alaska to offer a more comprehensive route map across the USA.
- United – United is already the strongest international carrier and will become the primary international airline of the USA, serving six continents in a much more limited capacity than it did pre-pandemic. Domestic flights would be whittled down.
- Allegiant + Frontier + Spirit + Sun Country (The new Spirit Frontier) – a combined ultra-low-cost airline that would offer cheap fares on point-to-point routes across the country appealing to leisure travelers
- Southwest – also a strong airline, Southwest would survive as a stand-alone airline and preserve much of its current route map.
I’m not including Hawaiian Airlines in this list, but expect it would survive under subsidies from the Hawaiian government.
If things get even worse we could see the nationalization of carriers, a return to regulated routes and pricing, and a divvying up of route maps to keep each airline shielded from the sort of intense competition that has marked air travel in the preceding decade.
Far-fetched? Sure. From all accounts, Europe and Asia have settled into a new rhythm in which life is returning to a normalcy that is not quite the same, but hardly as dystopian as I imagine. I sincerely hoping this is all just a bad dream that will eventually pass. But if the situation continues to deteriorate and the virus rears its ugly head in a powerful new form, we’ll revisit the predictions again and see how right (or wrong) I was. I’m hoping I’m way off, but it isn’t unreasonable at this point to start thinking about worst-case scenarios.
How do you think airlines would stack up if the situation deteriorates further?