64 airlines financially ‘crash and burn’ during pandemic

[webfact]

 

By Peter Roche

 

2023 was supposed to be the year that travel finally returns to normal after three years of the industry being on its knees. However, the airline bankruptcies and increase in prices have made it challenging for travellers to plan their trips.

 

Locally, Thai Airways has been grounded, let loose from Thai government ownership, rebooted, rerouted and, currently, battling its way out of bankruptcy.

 

The average economy fares for 2023 have already increased by 36%, according to UK-based booking agency Flight Centre. Some destinations are nearly impossible to visit on a budget, with fares to far-flung countries like New Zealand increasing by 81% and to South Africa from the UK increasing by 42% in economy and 70% in business.

 

The reasons for these increases vary, but the global bookings for the first quarter of 2023 are still down by 22% compared to 2019, according to ForwardKeys. The Caribbean has suffered the least, with only a 3% decrease in bookings, while Asia Pacific continues to lag behind with a 46% decrease.

 

The issue of airline failures is not new, as starting an airline has always been a high-risk business with a challenging business model. The pandemic has, however, been more damaging to the aviation sector than previous recessions, wars or terrorist incidents.

 

According to AllPlane.tv, 64 airlines have ceased operations since 2020, and only a handful have revived after announcing bankruptcy or changing names. Alitalia, Italy’s former national airline, and Air Namibia are among the big names that have gone under.

 

Other airlines that have either gone out of business, or currently in a state of legal bankruptcy include Flybe, Trans State Airlines, Compass Airlines, City Jet, Air Mauritius, German Airways, TAME, LATAM, Level Europe, One Airlines, NokScoot, South African Airways, Island Express Air, Philippine Airlines, Miami Air International, Cathay Dragon. There are plenty of others.

 

The founder and editor of AllPlane, Miquel Ros, believes that the pandemic has been more of a jolt to the industry that finally made already struggling engines cut out. He explains that the pandemic prompted many airlines in a delicate financial situation to give up and that most of the airlines that failed in 2020 were likely to have gone out of business anyway, just a bit later.

 

Murdo Morrison, head of strategic content at FlightGlobal, finds it counterintuitive that more airlines didn’t collapse during the pandemic. He believes that most airlines were saved from destruction by governments who put their airline industries into hibernation and paid their fixed costs and most of the wage bill.

 

He also mentions that there have been a lot of launches in the past three years, but the biggest problem has been the recovery, with airlines and airports struggling to cope with the bounce-back in passenger numbers.

 

Thailand’s long-haul tourist traffic has certainly dropped off compared to demand in the last full year of tourism before the Covid pandemic. Singapore, India and Malaysia have been a big part of the reboot of Thailand’s tourism traffic over the past 6 months.

 

Russia, for completely separate reasons, is currently Thailand’s strongest tourist performer but there are multiple questions over the safety and maintenance of the aircraft flying in and out of Russia at this time, and the fares being demanded are much higher that they were in the past.

 

The travel industry is still facing many challenges in 2023, with airline bankruptcies and increased prices making it difficult for travelers to plan their trips. While the issue of airline failures is not new, the pandemic has had a significant impact on the aviation sector.

 

The past three years have seen a decline in global bookings, with the Caribbean being the least affected, and Asia Pacific lagging behind. Despite the challenges, the head of strategic content at FlightGlobal is cautiously optimistic about the summer season being extremely busy.

 

Source: https://phuket-go.com/phuket-news/phuket-travel/64-airlines-financially-crash-and-burn-during-pandemic/

 

-- © Copyright Phuket GO 2023-02-13

 

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[BritManToo]

I'm surprised more didn't go under.

The COVID shutdowns probably did more damage than WW2.

Inflation 10% and up almost everywhere, and entire countries bankrupt for nothing.

Edited February 13, 2023 by BritManToo

[sammieuk1]

The staggering price increase has killed off any slight chance of a UK run for me will look again next year maybe????

[OttoPollmann]

11 minutes ago, BritManToo said:

I'm surprised more didn't go under.

The COVID shutdowns probably did more damage than WW2.

Inflation 10% and up almost everywhere, and entire countries bankrupt for nothing.

Maybe that was the plan from beginning. Dependent countries are easier controlled and ask less questions. 

[Pique Dard]

18 minutes ago, webfact said:

While the issue of airline failures is not new, the pandemic has had a significant impact on the aviation sector.

the senseless embargo against cheap russian oil will make the situation even worse

[ezzra]

The world is in turmoil on many fronts right now and the aviation industry did not escape the brunt of oil, Covid, wars, inflation, hostilities and aggression and the down turn in the Technology and Innovation industries, so no wonder that so many airlines have folded, but given enough time and most will bounce back.

[BritManToo]

2 hours ago, ezzra said:

The world is in turmoil on many fronts right now and the aviation industry did not escape the brunt of oil, Covid, wars, inflation, hostilities and aggression and the down turn in the Technology and Innovation industries, so no wonder that so many airlines have folded, but given enough time and most will bounce back.

I don't think they will.

[spidermike007]

Nothing is the same after covid. The over reaction, cowardice and restrictions, were an astonishing thing to witness. Now, it would appear they are trying to make up for losses by hiking their prices. Much of the inflation we are witnessing has very little to do with shortages, supply chains, etc. It has alot to do with once in a generation corporate gouging and very ugly, base level opportunistic greed. Unfortunately, covid did not bring out humanity's better nature. 

[hotchilli]

4 hours ago, webfact said:

The average economy fares for 2023 have already increased by 36%, according to UK-based booking agency Flight Centre. Some destinations are nearly impossible to visit on a budget, with fares to far-flung countries like New Zealand increasing by 81% and to South Africa from the UK increasing by 42% in economy and 70% in business.

Pricing themselves out of the market.

[edwinchester]

Price of a trip back to the UK for my family is about 50% higher than it was pre covid when I thought of booking this week.

Edited February 13, 2023 by edwinchester

[Eleftheros]

7 hours ago, webfact said:

The pandemic has, however, been more damaging to the aviation sector than previous recessions, wars or terrorist incidents.

The pandemic did nothing to the aviation sector.

 

Government policies in reaction to the pandemic did all the damage.

[nigelforbes]

2 minutes ago, Eleftheros said:

The pandemic did nothing to the aviation sector.

 

Government policies in reaction to the pandemic did all the damage.

Using the same logic, the 80 million people killed in WWII were not Germany's fault but the fault of the allies? Really?

[pomchop]

4 hours ago, BritManToo said:

I don't think they will.

The top airlines will as they nearly always do...the minor players who may have gone under regardless of a pandemic may not.  People are not going to stop flying....they will fly more than ever in coming years.  Many govts will not allow their  top airlines to go bankrupt but will bail them out.

[Eleftheros]

50 minutes ago, nigelforbes said:

Using the same logic, the 80 million people killed in WWII were not Germany's fault but the fault of the allies? Really?

Trying to conflate deliberate aggressive human action aimed at the conquest of other countries, with a respiratory virus having similar effects in all countries, is beyond absurd. Really.

[nigelforbes]

15 minutes ago, Eleftheros said:

Trying to conflate deliberate aggressive human action aimed at the conquest of other countries, with a respiratory virus having similar effects in all countries, is beyond absurd. Really.

Not really, they both have much in common.

 

You do understand the difference between cause and effect, don't you!

Edited February 13, 2023 by nigelforbes

[zzaa09]

5 hours ago, spidermike007 said:

Nothing is the same after covid. The over reaction, cowardice and restrictions, were an astonishing thing to witness. Now, it would appear they are trying to make up for losses by hiking their prices. Much of the inflation we are witnessing has very little to do with shortages, supply chains, etc. It has alot to do with once in a generation corporate gouging and very ugly, base level opportunistic greed. Unfortunately, covid did not bring out humanity's better nature. 

....and all this after three years of false and bogus narratives that were forced upon the unsuspecting populations. 

I beginning to suspect that there might be validity to what some are calling The Great Reset and the malevolent strategies forthcoming. 

[zzaa09]

4 hours ago, hotchilli said:

Pricing themselves out of the market.

And we shouldn't expect these new adjusted cost to be temporary either. 

The added charges [anything/everything] will become permanent fixtures within the airline circles. 

 

All of which is slightly paradoxical when the greater percentage of commercial airlines receive auto-subsidies from respective governments. 

[Woof999]

Some of them were doomed to fail without the need to blame COVID, Putin, black cats or anything other than their appalling business models.

 

FlyBe (reincarnated) is a perfect example.

[spidermike007]

4 hours ago, zzaa09 said:

And we shouldn't expect these new adjusted cost to be temporary either. 

The added charges [anything/everything] will become permanent fixtures within the airline circles. 

 

All of which is slightly paradoxical when the greater percentage of commercial airlines receive auto-subsidies from respective governments. 

In the US, they received tens of billions of dollars, then hiked their fares into the stratosphere, as soon as demand rose. In addition they cancelled thousands of flights, at a whim, without any consequences. I think Pete lost all credibility on that front. 

[BayArea]

15 hours ago, webfact said:

However, the airline bankruptcies and increase in prices have made it challenging for travelers to plan their trips.

This right here is the crux of the issue going forward. If the airlines want to bounce back, they need to seriously examine their prices because with the impending recession looming around the world, it's going to get really ugly. 

Edited February 13, 2023 by BayArea

[realfunster]

19 hours ago, sammieuk1 said:

The staggering price increase has killed off any slight chance of a UK run for me will look again next year maybe????

Checking June for London - several airlines (Emirates, Qatar, EVA, Etihad, THAI, Swiss) offering UK return trip for THB 32-37k, which is around pre-COVID levels IIRC ?

Business fares are definitely up, at around THB 120k+, usually you might see many options at THB 85k+.

EVA premium economy remains an attractive proposition if you want a bit more comfort at around THB 55k.

 

More capacity is coming back on line, so prices and availability should improve even more as the year progresses. With current capacity levels , booking well in advance work best. 

[steve187]

13 hours ago, edwinchester said:

Price of a trip back to the UK for my family is about 50% higher than it was pre covid when I thought of booking this week.

by way of a comparison what do you think a return trip in economy Bkk/Uk/Bkk was per adult back in 2019 or 2020, (i was travelling the reverse of that journey i paid £800 ish with eva air PE Lhr/Bkk/Lhr), i have looked at Utp/Stn/Utp for June at 30,000thb but long stop overs, but Utp/Bhx/UTp comes in at 39,100thb

[edwinchester]

1 hour ago, steve187 said:

by way of a comparison what do you think a return trip in economy Bkk/Uk/Bkk was per adult back in 2019 or 2020, (i was travelling the reverse of that journey i paid £800 ish with eva air PE Lhr/Bkk/Lhr), i have looked at Utp/Stn/Utp for June at 30,000thb but long stop overs, but Utp/Bhx/UTp comes in at 39,100thb

EVA was 24k. Flights on Thai for myself, wife and daughter were just over 60k. Cancelled beginning of 2020. Cheapest direct I can find for the three of us now is just under 100k. Economy prices.