Home Sweet Home: identifying potential ‘winners’ in domestic-led aviation recovery

The global aviation industry is cautiously taking to the skies once again. In nearly every region, air passenger capacity (seats) is rising in June as compared to previous months.  And, across the board, domestic air capacity is leading the way. IATA estimates that domestic air travel could see a rebound to pre-crisis levels by 2022 while international air travel may take up to 2023 or 2024. 

In this context, airlines that were heavily domestic-oriented in their operations pre-COVID-19 would have a strong starting point, as they can expect to bring back more of their pre-crisis capacity. Putting aside for the moment the current financial health of an airline, a historic position of strength in its domestic market may be indicative of its ability to win relative to competition in the coming months.
An examination of the dynamics of the markets in India, Europe and North America reveal which airlines have an advantageous starting position as recovery gathers pace in the coming months.

Further, Lufthansa Consulting has identified six distinct starting positions that airlines find themselves in as they face the resumption of air service. Each has certain strategic implications, and requires a differentiated, nuanced approach to planning and preparation in order to lay the groundwork for financial sustainability and a gain in passenger market share.

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