With regular income flowing in from frequent enterprise journey, baggage charges, and low cost seats, airways have been flying excessive final 12 months, wrote Byrne Hobart in Marker. However as enterprise journey got here to an absolute lifeless standstill and with shoppers experiencing justifiable demand shock for the higher a part of the 12 months, airways proceed to face an uphill battle with journey analysts and executives saying a full restoration received’t happen till at the very least 2024. Final week, Delta reported it misplaced a whopping $5.4 billion in Q3 with income down 75% from final 12 months.
With no second spherical of presidency bailouts, airways have been laying off and furloughing tens of thousands of employees and placing up numerous belongings for collateral, together with their worthwhile frequent flier mile packages. Hobart wrote about how loyalty reward packages — a “high-margin, high-growth enterprise” — may very well be one of many few viable sources of income on the flailing sector’s stability sheet that’s retaining them afloat proper now. However the way forward for these packages hinges on airways truly holding onto their flights and routes and never scaling them again.