Final Report
Aviation Industry in 2020
ECO100
, 1. Introduction
In this paper we will speak on the current status of the Aviation industry and how it is
currently being affected. An industry that was once on a come up and growing at a record
breaking pace has now slowed down to numbers unheard of in this decade. The airlines today are
struggling and having to let employees go as well as rely on the government to stay afloat as well
as letting go of many of their planes and routes. This change happened because of Covid-19.
2. Size and/or Growth of Industry
The air transportation industry has been growing nonstop since 2015 and many predicted some
high number for the industry. The cost of oil being low has really allowed airlines to lower the
price of their tickets allowing more customers to fly at a more cost effectient rate. The industry
took a big hit this year due to the Covid-19 outbreak. In 2019 the industry had a market value of
$801 billion and it is projected that in 2020 the value will be much lower at $686 billion. This is
forced many airlines to furlough many of their workers, retire many routes, and had to sell off
many of their aircraft which caused the airlines to downsize. In turn you will notice that the cost
to fly is slowly increasing to make up for the lost as many airlines, for safety reasons, are having
to block off many of the seats not allowing for full flights.
3. Macroeconomic Indicator or Policy and Its Importance and Impact
Many airlines are struggling to keep their head above water. Many tough decisions are
having to be made. Prior to the Covid-19 outbreak this industry was projected to profit
approx. $29 billion which would have been the most since 2015 according to statista.com.
Now since the outbreak took place the amount of refunds given increased and the number of
travelers decreased. Now this industry is projected to profit negative $84 billion for 2020 and
for 2021 negative $16 billion. Prior to this airlines were purchasing new planes, adding on
2
Aviation Industry in 2020
ECO100
, 1. Introduction
In this paper we will speak on the current status of the Aviation industry and how it is
currently being affected. An industry that was once on a come up and growing at a record
breaking pace has now slowed down to numbers unheard of in this decade. The airlines today are
struggling and having to let employees go as well as rely on the government to stay afloat as well
as letting go of many of their planes and routes. This change happened because of Covid-19.
2. Size and/or Growth of Industry
The air transportation industry has been growing nonstop since 2015 and many predicted some
high number for the industry. The cost of oil being low has really allowed airlines to lower the
price of their tickets allowing more customers to fly at a more cost effectient rate. The industry
took a big hit this year due to the Covid-19 outbreak. In 2019 the industry had a market value of
$801 billion and it is projected that in 2020 the value will be much lower at $686 billion. This is
forced many airlines to furlough many of their workers, retire many routes, and had to sell off
many of their aircraft which caused the airlines to downsize. In turn you will notice that the cost
to fly is slowly increasing to make up for the lost as many airlines, for safety reasons, are having
to block off many of the seats not allowing for full flights.
3. Macroeconomic Indicator or Policy and Its Importance and Impact
Many airlines are struggling to keep their head above water. Many tough decisions are
having to be made. Prior to the Covid-19 outbreak this industry was projected to profit
approx. $29 billion which would have been the most since 2015 according to statista.com.
Now since the outbreak took place the amount of refunds given increased and the number of
travelers decreased. Now this industry is projected to profit negative $84 billion for 2020 and
for 2021 negative $16 billion. Prior to this airlines were purchasing new planes, adding on
2
