By Jim Ferry
The first patient in Wuhan City, China, reported symptoms similar to a coronavirus infection on December 8th. Nearly one month later on January 7th, the disease was identified as a new type of coronavirus, named COVID-19. By January 13th, the first case was identified outside of China in Thailand and on January 20th, the first US case was confirmed. As of April 26th, COVID-19 had become a global pandemic with just under 3 million confirmed cases and 205 thousand deaths across 210 countries and territories around the world1. A critical factor to the unprecedented spread of the disease is the airline industry.
A Shrinking World
Since 2010 the annual global number of airline passengers increased by 68% to reach 4.5 million passengers in 20192. This increase is driven by a strong economy and flights becoming more affordable with the average US domestic flight cost decreasing by 10% when adjusted for inflation over the same time period3. However, the number of flights only increased by 34% over the same time period2. The result is squeezing more passengers on planes by adding more seats and decreasing legroom. Infected passengers traveling by air in these close quarters helped lead to the rapid spread of COVID-19 across the world.
The US as the New Epicenter
At least 316 million people in 45 states are being urged to stay at home due to COVID-19. This represents ~95% of the US population, while the Center for Disease Control (CDC) has urged all Americans to avoid nonessential travel4. Despite these guidelines, the US continues to have ~30 thousand new confirmed cases each day and is approaching ~1 million total confirmed cases5. However, air travel makes it nearly impossible to maintain the six foot social distancing guidelines put forth by the CDC given the close proximity of seating. This has resulted in a 95% reduction in travelers passing through TSA per day and a 55% reduction in total US flights that takeoff6.
In response, US airlines have taken drastic measures. Delta was the first US airline to respond to the pandemic by cancelling all flights to China in early February and is now trimming its domestic flying capacity by 10-15%. American Airlines has reduced international flights by 75%. United is cutting its flights by up to 90% for the month of April. Almost all airlines are waiving change or cancellation fees, which is projected to materially decrease total airline passenger revenue globally in 2020 by 38%.