Much of the rich world is emerging from two years of pandemic more flush than it’s ever been. Deposits held by consumers at U.S. commercial banks are roughly $3.5 trillion above where they’d have been if they continued the pre-pandemic trend, a position that inflation is only starting to eat away.
For the airline industry, it’s precisely the opposite. While travel volumes are returning to something like normality in most of the world, the legacy of Covid — in the form of the vast debts clocked up during two years on life support — has barely shifted. If you’re looking for an explanation for the chaotic scenes of cancelled flights, lost baggage and passenger number caps at airports this northern hemisphere summer, it’s worth considering the drastic cost-cutting the industry will be undergoing for many years to come.