Rather than aiming at restoring their financials to 2019 levels, airlines should be aiming for more after the COVID-19 storm has passed.
Gueric Dechavanne, vp of Commercial Aviation and Valuation Services at Collateral Verifications LLC, said the discussions around getting back to 2019 levels in the industry should be rethought. “Why are we focusing on 2019 levels? Let’s focus on getting back to profitability,” he said.
“How do we get back to getting people back on airplanes, flying again, so that airlines can start making money, and the rest of us can support the industry? How about we just get back to where it makes sense for everybody to be in business?”
Gueric pointed out that there were industry differences between the COVID-19 event and previous downturns. Record low fuel and interest rates, steeper capacity cuts, greater travel restrictions, OEM challenges, top-tier airlines with stronger balance sheets, and the industry coming off record highs (before the crisis) – he said these differences would dictate the recovery after the initial impact.
“Right now the news is definitely horrible out there in terms of what we’re seeing… to me this is kind of the calm before the storm. We’re not really seeing the full impact of what this is going to mean,” said Gueric.
