Categories
FinTech Payments

US Airlines: 2020 Losses May Land Above $35 Billion

January 04, 2021 at 12:36AM

U.S. airlines are likely to lose more than $35 billion in 2020, CNBC reported, citing public documents and analysts’ forecasts.

Moreover, airlines aren’t expected to recover until the second half of calendar 2021, according to CNBC.

Among the data CNBC cited were major drops in the share prices of airlines in 2020 — declines that followed what overall had been a good decade for the industry. According to the news site, American Airlines’ market capitalization fell 45 percent, Delta’s fell 31 percent and United Airlines’ fell 51 percent. Additionally, according to CNBC, Southwest lost 14 percent of its market capitalization — all while the S&P 500 increased by 16 percent over the course of the calendar year.

One reason CNBC cited in making its gloomy assessment was the addition of significant debt to airlines’ balance sheets. According to the recent post, U.S. airlines ended 2020 with more than $172 billion in debt — up $67 billion from the level at the beginning of the year.

Citing industry analysts, CNBC reported that Southwest, Delta and Alaska are likely to return to profitability during the course of 2021.

CNBC quoted a New Year’s Day memo to Delta employees from Chief Executive Ed Bastian that read, in part: “Our mission of connecting the world has been reaffirmed by the events of the past year, but we don’t yet know what travel demand is going to look like when it rebounds. Simply re-creating the Delta from 2019 won’t be an option; our customers will give us the blueprint for the Delta of 2021 and beyond.”

Looming over any plan for airlines to return to profitability is the question of whether business travelers will return to the air. Microsoft co-founder Bill Gates, for one, has predicted publicly that the answer is a resounding ‘no.’

Gates recently said he thinks more than 50 percent of business travel and 30 percent of days worked at offices will never return to pre-COVID-19 levels.

 

US Airlines: 2020 Losses May Land Above $35 Billion …

Selected by Fintech Tube

press fctech Search Web: US Airlines: 2020 Losses May Land Above $35 Billion