Assessing the Damage: The Airline Industry's Grim First Half

It started innocently enough. The first two months of 2020, it seemed, had the world’s airlines on track to deliver their eleventh straight year of profitability. Fuel prices were pretty low. Demand was more or less strong. Businesses were traveling. Tourists were traveling. And the headline headaches of 2019—Brexit, cargo distress, aircraft shortages, etc.—looked set to ease. Then came … well, you know. A disease called Covid-19 turned the world upside down. The nightmare started in Wuhan, China, all but shutting down the country’s airline sector during its Spring Festival. That happens to be the busiest and most lucrative period of the year for airlines like Air China, China Eastern, and China Southern, which would report a combined $2 billion in first-quarter operating losses. The outbreak then spread to other parts of Asia, then Italy and Iran, then elsewhere in Europe. New York would become a subsequent epicenter, setting the U.S. on a course to become the worst-hit nation in terms of victims. As the first half of 2020 ended, the virus had killed more than half a million people and was still spreading rapidly through the U.S. sun belt, through Latin America, through the Indian subcontinent, through Russia, and through Africa. Airlines e