As the financial results of the second quarter become available, the full picture of monumental losses COVID-19 lockdowns inflicted on the airline industry appears. Let’s take a deeper look at the worst crisis airlines have suffered so far.
Both Southwest Airlines (LUV) and American Airlines Group released their Q2 financial results on July 23, 2020. That is two of the new Big Four who control almost 90% of the commercial flights in the US, other two being Delta Air Lines and United Airlines. Their results were released earlier.
As expected, passenger demand dropped hard with travel restrictions and people’s unwillingness to travel. The amount of passengers carried decreased by average nine-tenth in all four airlines, equaling to just a fraction of what it was in the second quarter of 2019.
This impacted the total revenue of airlines greatly. It is normal for the holiday season to be the most profitable, so a dip in the last quarter of 2019 was expected. A lot less expected was the fall in the beginning of 2020, as the lockdowns began in early March. But the full force was yet to come. All four companies registered 2Q20 as the worst quarter in decades.
Final result? Losses. Unsurprisingly, none of the Big Four had profit in this quarter, all of them losing billions of dollars to the biggest crisis the industry has ever experienced. Southwest, the smallest by revenue, was understandably hit the least. Others suffered more.
…yet this is not the full story. Just an American part of it. Financial results of the largest European and Asian carriers are due to come in late July-early August. Ryanair, the largest European airline, already reported their passenger load decrease from almost 42 million in 2Q19 to 0.5 million in 2Q20. That’s -98.7%: just four red figures in that first infographic. The worst quarter for the US is on its way to become the worst quarter worldwide.
