The airline industry has come to a near standstill. From nearly 1.2 million international flights in December 2019, there are fewer than 200,000 scheduled to operate in April 2020. Almost all major countries have pulled up the drawbridge and restricted large extents of the world’s population from crossing their shores.
Domestic aviation markets have not been immune to this, either, with strong social distancing protocols or complete lockdowns in certain countries resulting is a significant reduction in domestic operations.
Airlines are squeezed on multiple dimensions. The top line is impacted due to little or no revenues and passengers clamoring for refunds. The bottom line is hurt due to the high fixed or recurring costs that most airlines typically carry, including expensive payments due for aircraft. And, compounding the situation further, is the high uncertainty about how long all of this will last.
In this environment, there are several actions airline CXOs – the C-suite comprising of the CEO, CFO, CCO and other senior executives – must take, across seven dimensions.
Survive the crisis
1. Aggressively manage liquidity
2. Protect or drive revenues
3. Double down on cost management
4. Communicate extensively
5. Protect employees and customers
6. Work with the industry and community
Thrive on recovery
7. Plan and invest for the future
The most immediate measures are typically geared at surviving a short disruption, and are usually applicable at all airlines. However, given the current projections of continued disruptions and a long, slow road to recovery, more aggressive actions are necessary.
In this article, Arvind Chandrasekhar offers a comprehensive view of the range of actions airline CXOs should have on their checklist – including aggressive measures that may disrupt the status quo and result in a fundamental reshaping of the airline and its operations - as they seek to navigate this unprecedented situation for the industry.
The author of the article Arvind Chandrasekhar is an Associate Partner at Lufthansa Consulting and leads the Solution Group Network and Fleet Management.
Further insights from Lufthansa Consulting’s aviation experts are available here
We at Lufthansa Consulting believe that aviation is not just an industry. It’s a way of living, a feeling, a community. And, in crises, communities stick together.
Get in touch for a complimentary 60-minute consultation call with our experts to test your plans, brainstorm options and chart a path to the future: ALcrisis-solutions@LHConsulting.com