The travel industry has been hard hit by the pandemic. While things have improved significantly compared to the first half of the year, business in the travel industry is not expected to bounce back to pre-corona levels until 2024. According to United Airlines CEO, Scott Kirby, demand for corporate flights could start improving in the final quarter of next year.
Travel Industry Woes
The sentiment comes at a time when most countries are struggling with a second wave of infections that is already threatening a series of lockdowns. Rising cases of infections in Europe and the U.S has already seen the re-emergence of social distancing policies, all but shredding all the gains achieved in the past few weeks.
Airlines remain the most affected as people refrain from traveling on fear of contracting the deadly virus. With business at subdued levels, airlines have already started cutting back on staffing as part of an effort to keep expenses low.
Republicans and Democrats struggling to reach an agreement on a new round of stimulus all but spells gloom for the embattled airline industry. Most of the companies refrained from laying off staff in the first half of the year in the wake of a massive government bailout. With the bailout channel drying up, the airlines have been left with no choice but to cut back on spending.
Coronavirus Uncertainty
Chicago-based United Airlines has already posted a $1.8 billion net loss for the third quarter as the virus took a toll on its core business in the quarter. The airline has already furloughed more than 13,000 workers. With the outlook not showing signs of improvement any time soon, the airline might be forced to lay off most staffers.
Stalemate on the development of coronavirus vaccine all but continues to compound woes in the airline industry. A vaccine is highly needed to get people back to traveling. With drug makers hitting stumbling blocks on the development of a safe and effective vaccine, airlines are likely to continue feeling the full brunt of the pandemic.
