As the novel coronavirus spreads throughout the world, different industries are being affected. With dozens of countries going into lockdown and quarantine, the aviation industry is one of the most affected industries. On the 5th of March, the International Air Transport Association announced that the estimated impact on aviation from COVID-19 to 63 billion dollars. We can see the impacts on the stock market as well, where airline shares have fallen around 25% since the disease started.
The economic impacts on aviation are the most severe. Worldwide quarantines are causing demand to plunge, leading to lower profits, lower employee wages (perhaps even to mass layoffs). With such a disparity between supply and demand, the entire aviation industry is at risk. A USAToday article by Ray LaHood finds that the damages caused by the coronavirus could very well be worse than the economic damage caused by 9/11. LaHood writes, "At the beginning of this crisis, it appeared as though the airlines would be able to weather the storm, thanks to careful planning and smart decisions meant to cover a future crisis. But government restrictions and widespread guidance to limit travel and social interactions have resulted in a sharp decline in bookings and a significant uptick in cancellations. In fact, multiple countries are considering bans on travel. The European Union is considering a ban on flights into its 27 member countries."
As we see more and more cases of COVID spread throughout the world, it's essential to find a solution to save the many industries that are affected. These negative externalities only spread to other parts of the economy, which is why it's crucial to find new ways to support industries during the coronavirus outbreak.
https://outline.com/v5RYbg
https://www.aa.com.tr/en/latest-on-coronavirus-outbreak/covid-19-impact-on-aviation-was-rapid-report/1779268
https://www.usatoday.com/story/opinion/2020/03/19/coronavirus-crisis-save-aviation-industry-10-million-jobs-column/2870595001/
I can definitely see how the Coronavirus has a greater effect on aviation than 9/11. The main challenge for 9/11 was making sure that a similar event didn't happen again. Companies(if they wanted to and had employees who were willing) could resume their normal travel schedules soon after, but with the Coronavirus, it's a safety hazard to keep airlines operating. Having almost no revenue for months is not good for any business, much less one operating on such low margins like airlines are.
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