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If you think we at Skift — and me personally through my essays and posts on LinkedIn and elsewhere — have been dire and dour about how slow the recovery in travel will happen, how this is a generational break from the past, how we may have already seen peak travel in various parts of it, how much of the demand may be permanently lost, and how long it would take for recovery to come close to pre-Covid levels (maybe a decade, maybe never?), just wait till you spend 43 minutes listening to this ray of sunshine.
Transport consultant and aviation restructuring expert Hubert Horan talked to The Financial Times Alphaville editor Izabella Kaminska last week in this live video, archived on YouTube, about the dire fundamentals facing airlines carriers in the post-coronavirus world, how it will spawn a complete mayhem in the industry, and why it is the top airline executives, and the investment community that invests in them, who are deciding to ignore the obvious.
The big message: The airline industry is in denial about its imminent collapse and the reasons why that is.
Horan further lays out his analysis on his own blog Naked Capitalism, and proposes a solution on industrywide restructuring of the airline sector, but has little hopes of this actually happening due to the political climate and leadership crisis we have around the world and particularly in U.S.
“The industry, capital markets and the business press have willfully ignored the actual magnitude of the collapse and remain wedded to absurd narratives that falsely assumed rapid, robust demand recovery. The industry and government officials who are actually dealing with the crisis have been myopically focused on narrow objectives (e.g. protecting the financial interests of select investors, minimizing direct government payments to workers).
“These parties have no interest in restoring and protecting society’s interest in efficient and competitive airline service, and do not appear to consider broader economic interests as legitimate or relevant,” he continues. “In the U.S., it is not clear that the competence to oversee an industry-wide restructuring focused on overall economic welfare exists anywhere in the federal government.”
See, I did warn you about this.