Analyst: It Will Be 5 Years Before Airlines Fully Recover

Don’t expect the airline industry to resemble anything even remotely close to what it was when 2019 ended for at least a half-decade.

Those are the words of Helane Becker, managing director of Cowen & Co. and one of the most respected airline analysts in the world.

Becker, speaking with CNBC, said it will be five years before airlines return to the kind of traffic levels it enjoyed in 2019—and even in the first two months of the year—and that the industry as a whole could end up 30 percent smaller this year than in 2019 due to the effects of the coronavirus.

“This is a problem they didn’t create,” Becker said. “They entered 2020 in arguably the best financial shape they’ve ever been in, and January and February were very good months.”

But when COVID-19 became a global pandemic, all bets were off. President Trump put restrictions on travel to China and Europe, and even domestically the demand for travel dropped precipitously. As a result, airlines slashed their own schedules practically down to nothing.

“We think it will be five years before domestic traffic gets back to 2019 levels and at least six years before international traffic gets back to those levels,” Becker said. “The industry will end 2020 30 percent smaller than it started the year. there will probably be 100,000 and 200,000 people furloughed anyway regardless of whether (the airlines) take the (stimulus) money.”

Becker then said to preserve capital, the airlines should consider a drastic measure.

“They should probably shut down and furlough everybody and then wait for traffic to resume before they slowly start up,” she said.

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