[ad_1]
Qatar Airways CEO Akbar Al Baker has offered his opinion on the current state of the aviation world. The head of the airline has indicated that he believes the airlines are not yet clear and will likely need more support from governments. He also extended the comments to cover his own airline.
Still unclear
In comments made to CNBC, Al Baker stated that “the worst was not behind any airline.” He believes that a second wave, which could be worse than the first wave, could lead to the collapse of other airlines or bailouts of countries.
As for Qatar Airways itself, CEO Akbar Al Baker stated that he believed the losses would continue for the airline. The airline this year posted a massive annual loss of nearly $ 2 billion. The airline received $ 2 billion in support of its government.
Airlines are still in trouble
Look no further than the United States to see that the airlines are still in trouble. After receiving billions in support in March and April, airlines turned to Congress again in a bid for more funding. However, so far those offers have been unsuccessful.
Most carriers are still consuming significant amounts of cash. Just a few days ago, IATA released an alarming statistic that, globally, airlines are spending nearly $ 300,000 per minute. This will see the global cash burn in the second half of the year reach a whopping $ 77 billion.
Add to that significant international travel restrictions, international routes, which generate lucrative profits for airlines ranging from Qantas to British Airways to United Airlines, it is clear that airlines are still battling a perfect storm.
Is right?
In a year from now, we’ll probably know if Al Baker was right or wrong. For now, it’s the best guess of anyone. Yet few, if any, airline CEOs from Europe, North America, South America and others project an optimistic outlook. Most hope that a vaccine will help stabilize some of the losses by giving more passengers the confidence to fly and open more borders.
While airlines cannot let their guard down, the US aviation sector is seeing signs of a rebound. Since around July, passenger numbers have been somewhat constant with ups and downs and recently signs that there could be better days ahead.
However, the comment about your own airline is pretty harsh. Qatar Airways has significantly more exposure to international travel compared to most other airlines globally, which means that travel restrictions hurt it more than others. While airlines like LATAM, American Airlines, and China Southern may depend on national networks for some revenue, Qatar Airways doesn’t have that luxury.
So it’s not unthinkable for Qatar Airways to suffer losses in the coming years without a return from most international travel, but that hasn’t stopped the airline from pursuing growth with new flights to Accra and San Francisco, among others.
Some sectors, such as China, Vietnam and Russia, have so far shown signs of a strong recovery. Vietnam, in particular, had taken very strict measures to shut down international tourism, although the country has recently started opening international flights.
Time will tell
Ultimately, few industries are as volatile as the airline industry. Hardly anyone would have predicted that airlines would be in such dire straits after airlines began shutting down flights to China in January and February. Since then, the global spread of the virus has wreaked havoc on airlines, their employees, and all employees in the tourism sector.
Do you think the worst is behind the airlines? Let us know in the comments!
