“Trust is a fragile thing – difficult to build, easy to break. It cannot be bargained for. Only if it is freely given it can be expected in return” –
The COVID-19 pandemic has devastated many industries, but perhaps none as swiftly or as severely as the travel industry. As borders shuttered and lockdowns came into effect worldwide this spring, reeling airlines grounded flights across the world. By April, IATA estimated that passenger traffic dropped by 91%, forcing airlines to cancel over 80% of their flights and sending dozens of airlines into bankruptcy. Major carriers including Avianca, LATAM, South African Airlines, and Virgin Atlantic filed for bankruptcy protection or were forced into receivership.
As airlines struggled to cope with the devastation, they reverted to life support mode. They massively laid off staff, grounded entire fleets, and set to work cancelling thousands upon thousands of flights. And they were left with a massive cash flow problem when, suddenly, they had to cancel virtually all of their flights and refund their passengers. So much money going out, with no money coming in? That spelled disaster. And they panicked.