Executives from some of the world's leading airlines are optimistic COVID-19 might run its course over the next few months, but caution things will get worse before they take a turn for the better.
Airlines worldwide have suspended flights or modified services in response to the COVID-19 outbreak. Airlines in China are taking a hard hit. More than 3,250 flights originating in China on January 6 connected more than 850 city pairs worldwide. On February 21, or less than seven weeks later, only 700 such flights took off, connecting 240 city pairs.
Meeting in Austin, Texas, airline bosses, aircraft makers, and financiers took more notice of these matters. They did, however, agree the air travel business will see a long-term recovery but warned 2020 has all the makings of a lost year for growth.
They also expressed alarm the spread of COVID-19 in the United States might have swift and dire effects on the aviation industry as a whole since the U.S. is the world's leading maker of passenger aircraft. Conference attendees received a clearer picture of the tremendous hit dealt to airlines in Asia, especially in China, and were again warned about the deleterious impact COVID-19 is having on the European aviation industry.
The global aviation industry is in for "period of great uncertainty" and the likelihood of "significant airline failures" in 2020, said keynote speaker Rob Morris, global head of consultancy for Flight Ascend by Cirium. He also said the industry's 10-year growth cycle is over.
On the other hand, European airlines meeting at Brussels warned the worst is yet to come for the airline industry in terms of economic damage from the COVID-19 outbreak. They did, however, predict travel demand might stabilize in the coming weeks.
Willie Walsh, CEO of International Airlines Group (IAG), pointed to a "very significant fall-off in demand" in Italian markets over the past week, as Italy has seen the biggest COVID-19 outbreak in Europe. On the another hand, Walsh predicted demand will stabilize in coming weeks if bookings followed the pattern seen in Asia.
"I think we will see air traffic recover in due course," he said.
Ryanair CEO Michael O'Leary agreed the next few weeks will be tough. He expects a "very deflated booking environment" for the next two to three weeks, but bookings will recover when the crisis stabilizes.
"I think you will see a pretty rapid return to normal," he predicted.
The COVID-19 crisis has led to a quarter of the short-haul fleet of airlines like Lufthansa being grounded.
