COVID-19’s Impact on the Airline Industry

Posted by Holly Hou on 9/8/20 2:09 PM

So much has happened over the past several months: stay-at-home orders, social distancing requirements, and restrictions on non-essential travel. Airlines, hotels, and other travel service providers have been hit hard by the coronavirus outbreak. As a result, airlines have updated their cancellation policies, cleaning regimes, and loyalty program qualifications. Once bustling, crowded airports are now empty; once full flights are now operating at reduced capacity. Read on as we explore some major events in the airline industry during this time.

 


 

An Unexpected Alliance

We were all surprised when American Airlines announced its partnership with JetBlue on July 16, 2020. This partnership is aimed to enhance each of these airlines’ offerings in the midst of this pandemic. JetBlue, based in New York (JFK) is looking forward to increasing flights out of New York’s three major airports. A code sharing agreement with American Airlines means that JetBlue can also offer flights operated by American Airlines on different routes.

 

In most cases, airlines can offer another routing to its customers without the airline having to actually operate the flight through a codeshare or interline agreement. If you are familiar with airline alliances, that’s it! American will launch international service from New York (JFK) to Tel Aviv (TLV) and to Athens (ATH), and JFK to Rio De Janeiro (GIG) while Jetblue will be adding more flights in New York for seamless connections, especially since international flights are limited.

Virgin Australia’s Journey

While some airlines continue to weather the storm, there are other airlines that are undoubtedly losing ground. On April 21, Virgin Australia filed for Chapter 15 bankruptcy, becoming one of the first major airlines to fall victim to the pandemic. Bain Capital was announced as the winning bidder for Virgin Australia. Under Bain Capital’s administration, Virgin Australia will go through restructuring and approximately 3,000 jobs may be cut. 

 

Tigerair, Virgin Australia’s low-cost carrier, might come to an end. Bain plans to shut down the brand due to low demand, though Virgin Australia will retain Tigerair Australia’s air operator certificate, “to support optionality to operate an ultra-low-cost carrier in the future when the domestic market can support it.” With these upcoming changes, Tigerair’s passengers affected by any cancellations would be provided with a travel credit for use on Virgin Australia operated services.


Good bye, Boeing 747!

Planes have been stuck on the tarmac since flight services have been reduced significantly. British Airways announced that it will retire its iconic fleet of Boeing 747 aircraft. Known for its large size perfect for cargos, Boeing 747 aircraft requires maintenance more often than newer models. At this time when airlines are facing lower revenues, it is not efficient anymore to continue operating the aircraft.

 

While the travel industry has undoubtedly been greatly affected by the pandemic, travel will come back - it’s just a matter of when. People love to travel and as we wait for the pandemic to subside, we can scratch our travel itch in other (safe!) ways, such as local stays and road trips. Read more on travel during this time here.

 

If you have any existing flight reservation affected by the above changes, feel free to reach out to us. We are here for you anytime!

 

Topics: Air Travel, COVID-19

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