The pandemic has changed the way millions of people get around, and that has forced the airline and auto industries to rethink the way they do.
It comes down to each of these industries having one colossal shift. The airline industry is dealing with lower corporate travel — they have to try to figure this problem out at some point. However, nobody’s quite sure when corporate travel is going to come back. I would travel now personally but I can not, all the places I need to travel are in quarantine or not allowing me in through visa.
Meanwhile, in the auto industry, it is the opposite. Used vehicles are like red hotcakes. Auto auctions are seeing strong sales close to record sales; 40 million used cars will be sold in America as a guide this year. That’s a record high.
The car dealer cannot keep up with demand because dealers are saying people are asking “I need a vehicle? And my life has changed in some fashion so that I’m going to be doing more driving, either I want to, or I need to.
As a result, you’ve got used, car prices that are at a record high. All types of cars have moved higher and the reason why is because they’re, seeing greater demand and more significant sales.
Meanwhile, even new cars are seeing things positive. Toyota, the other week, gave an update on the business which was terrific considering the pandemic. One of their executives said that they are hearing reports from their dealers that they are seeing more first-time buyers than ever before.
The auto industry has weathered the storm much better than the airline industry, and this is a problem for the airline industry. It’s, not just that you have low volumes because people are concerned about COVID19 and flying, but it’s also because corporate travel is down as much as it is, it has never in the history of airline travel been globally this low with so many restrictions.
Look at the percentage of people who have a fear of flying now in recent reports. That says it all right there, people are very concerned about the health in aviation when actually in the air flying on a global scale. It has improved slightly in recent weeks, but when you have passenger levels down 80 per cent on most airlines, that also tells you why the airline stocks are suffering too.
When I say suffering look at the big four US airlines, I’m talking about right now, their cash burn levels, a daily cash burn right now, vary between twenty and forty million US Dollars and again it’s all about corporate travel. Airlines are not seeing a return to corporate travel at all soon, and they are not sure when they will come in any measurable way.
However, some airlines globally are making multiple attempts to entice us back in the air, Qatar, for example, providing face guards you must wear always. The airline flight crews and attendants are all wearing PPE, and now US airlines are going to considerable lengths to spray internally and clean every aircraft precisely before allowing new passengers.
