I think the first time that air travel will be back to near pre-virus levels is this Christmas. Hopefully this will be long gone by then and that’s when the pent up demand will really let loose.

In another attempt to be positive about this situation this could potentially give mainline unions more leverage to bring flying back in house if the industry recovers rapidly. With the shutdown of two regionals already in motion with the possibility of more coming combined with the pilots that will say screw it I’m out for good I think pilots should stand strong and absolutely reject any concessions except for non contractual temporary exceptions. If the regionals are decimated by this and a rapid recovery does happen the lift will have to come from somewhere.

Of course this is just an opinion talking point on the positive side but we have to try to stay positive!

There won't be a rapid recovery. The economy was built on a house of cards, and corona was just a gust of wind that knocked it down. We're going to be printing money like crazy, while unemployment will sky rocket in lots of industries. People need extra cash to fly around the country. They won't have it.

Well we know what the structural weakness was last time (bad loans). What do you think it is this time?

The thing that is going to be most disrupted and damaged by this is the globalized economy.

Return of supply chains to internal sources could be a huge boost to the domestic economy.

We can make Rx electronics and toasters here....or in friendly states.

Otoh communist chinese cant eat their toasters electronics and artificial islands.
and they cant produce the food to feed themselves

Highly leveraged companies using tax cuts and in some cases, borrowing money, to purchase stock buybacks to inflate stock prices instead of capital investments or investments in people. Amazon seems to be the only large company that didn't participate in the ponzi.

This is from November:

https://wamu.org/story/19/11/21/sec-...tock-buybacks/

July:

https://www.cnbc.com/2019/07/29/buyb...se-stocks.html


"Over the past 12 months, nonfinancial companies have drained $272 billion in cash as part of the push to return still more money to shareholders. That represents a 15% decline and is the steepest drop since at least 1980, Kostin said.

At the same time, corporate leverage continues to rise as gross debt outstanding has climbed 8% over the past 12 months. That has come during a rough time for corporate profits, with S&P 500 earnings tracking for a 2.6% second-quarter decline, according to FactSet.

“Unless earnings growth accelerates materially, companies will likely continue to fund spending by drawing down cash balances and increasing leverage,” Kostin wrote."


So we had companies with dwindling profits increasing debts to buy stock to boost the stock price.

Solvency. By the time the dust settles, there will be a lot of companies that file Chap 7. Many will also file Chap 11.

The average American doesn't have much/any rainy day savings. This may change that attitude which will also kill demand for flying from individuals. Solvency will do a lot of damage to workers flying for business.

Take a look at auto loans - a lot of those will likely go bad well after this ends so individual balance sheets are going to suck for a while.

It's too late to put the coronavirus freakout back in the bottle and at this point the economic damage will be significant even if coronavirus went away tomorrow. The longer this drags on, the worse the economy will be on the other side of this. Federal helicopter money can only fix so much of our solvency problems

I’m afraid that you’re right. I also think that there will be a fairly rapid (by the end of the year) recovery, but only to a level of around 60-70% what it was. The full recovery to where we were could take a couple of years. The damage to the global economy has been done and the market will take time to correct. This is far from over, and the economic damage will worsen. We haven’t even hit peak freak out in this country yet.

Debt in general. Living the American dream month to month.

That sounds likely; a rapid return to 60-70% but a much longer slog before demand returns to 2019 levels. That's a lot of excess capacity for the next couple of years. A lot of firm orders are going to get turned into options. And there are more than a few European and Asian carriers that are likely to close their doors, causing a further glut of used aircraft.

On a positive note, oil prices should be low for quite a while.