Mubasher: The Covid-19 pandemic has been brutal for US airlines, with carriers’ 2020 net losses likely topped $35 billion, CNBC reported citing analyst estimates provided by FactSet.
That includes what is expected to be Southwest Airlines’ first annual loss in more than four decades. Most carriers will not see relief until the second half (H2) of 2021.
The global pandemic ended a decade of profits that the historically boom-and-bust industry enjoyed until 2020, a stretch during which they hired tens of thousands of workers, bought new planes, and expanded their networks.
During the past year, airline stocks dropped the most in years, with American Airlines’ share price losing 45%, its biggest percentage decline since before the carrier’s 2013 merger with US Airways, whilst Delta Air Lines’ stock lost 31%.
The global health crisis, moreover, forced carriers to quickly shrink, cut routes, and park hundreds of jets. US carriers’ increased their total debt by $67 billion in 2020 to more than $172 billion to weather the crisis. Paying that down will be a headwind over the next several years.