American Aviation: Impact Of The Pandemic

As we know, the pandemic has taken its toll on all countries. The United States is no exception. American aviation passenger traffic during the pandemic was seen to be reduced substantially due to restrictions on travel. According to the US Government Accountability Office, passenger traffic fell by 96% in April 2020 when compared to pre-pandemic levels in April 2019. The passenger levels remained 60% lower than 2019 levels in the rest of 2020.

The impacts of the pandemic have been devasting. According to the World Health Organisation, the US has had 1,023,774 deaths. This number is very significant, especially since according to Forbes, the US has 4.25% of the world’s population and yet suffered over 20% of the world’s Covid deaths.

American Airlines aircraft parked
The impact of Covid has been significant in the US © AP

The Impact of the Pandemic

The effects of the pandemic throughout the American aviation industry affected airports, repair shops and the rest of the supply chain. What this effectively means is that businesses serving the aviation industry were also heavily affected. In response to the reduction in demand, the industry responded by retiring planes. This in turn further affected associated businesses such as plane maintenance services, as there was reduced demand. In addition, members of staff were also put into early retirement or left out of work. This made it harder later on for airlines to increase their services to meet the surge in demand which took place once pandemic restrictions were reduced. Airlines were also seen to approach the commercial markets to raise liquidity.

The US Government also helped in providing the American aviation industry 100 billion dollars of assistance for airlines to pay for staff, rents and other expenses. Later on once pandemic restrictions were reduced, more loans were needed by US airlines to support the recovery, and in particular hiring more staff.

According to Reuters, in December 2021 54 billion dollars was given to airlines. From this, airlines had to repay 14.2 billion dollars. Airline Chief Executives of airlines such as American Airlines, Delta Airlines, United Airlines and Southwest Airlines were expected to defend why they needed this loan. The airlines together vehemently defended the financial help given, stating that demand for travel was still far less than pre Covid levels. Doug Parker, the CEO of American Airlines, said that the financial help had saved the industry.

Delta Air Lines
Airline Chief Executives were expected to defend the financial aid given © Getty Images

The Recovery of American Aviation

Positively, the US is now recovering strongly since the pandemic restrictions have been lifted. In contrast to the 60% reduction in passenger volumes in 2021, 2022 ticket sales have increased to only 10- 20% below pre Covid levels. The current share of the global market is also currently taken up by US domestic aviation at 24%. This makes it, according to the IATA, the largest individual market in the world.

As one can see the US aviation industry has had a difficult time with the pandemic. Airlines have had to adapt to the pandemic by reducing staff as well as planes. This had a negative knock-on-effect on other parts of the aviation industry such as airports, but also plane repair and maintenance services. Airlines have periodically needed financial support from the US Government to meet their costs. Fortunately, however, the industry in the US has shown a strong recovery from the pandemic. We hope to see this continue.

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Amuthan Chandrarajan
Amuthan Chandrarajan
Aviation Reporter - Amuthan has a background in residential and commercial real estate. He also has a keen interest in aviation and travel and has visited many countries. Amuthan has a sound knowledge of business and finance.  He has gained a Master of Business Administration and has become a Chartered Management Accountant. 


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