The pandemic became a major factor that undermined the global economy and harmed many other spheres. Nevertheless, the main manifestations of the COVID-19 pandemic were a slowdown of economic growth and a fast reduction of opportunities for businesses. Essentially, the pandemic itself, as well as the restrictions imposed by governments, disrupted entire economies and, subsequently, people’s lives worldwide (Nicola et al., 2020). The pandemic affected social mobility and the capacity of people to provide for their families, which was particularly noticeable in poorer countries (Estrada et al., 2021). During the pandemic, entire industries experienced crises, and the level of impact varied depending on particular segments. The airline industry was one of the primary victims of the pandemic and the policies introduced by governments concerning it.
COVID-19 and Airline Industry
The considerable negative impact experienced by the airline industry to a large extent can be attributed to the travel restrictions which the majority of countries introduced. Before the outbreak of the COVID-19 pandemic, the number of airline passengers has been steadily growing for a decade before 2019 (Iacus et al., 2020). As the number of people infected with COVID-19 rose, governments around the world did not see any other way of resolving the situation other than by limiting the inflow of people to their countries. According to official estimates, in 2020, the year when all travel restrictions were introduced globally, airline carriers lost approximately $118.5 billion (Stalnaker et al., 2021). The pandemic caused airlines to experience massive losses.
Passengers are the sole source of airlines’ revenues, and the drop in their number, especially unexpected, remains the only reason why carriers experience financial troubles. Since governments of many countries introduced travel restrictions and closed their border to foreign tourists, people simply avoid going anywhere outside their towns and cities. In 2020, the overall international passenger demand was less than 70% of the 2019 level, and the capacity of planes decreased by more than 60% (“Airline industry statistics,” 2021). Domestic travel still experienced a downturn and a drop in the number of people willing to go to other parts of their countries by plane. In 2020, the domestic demand globally decreased by more than 45% when compared to the previous year (“Airline industry statistics,” 2021). Such evidence shows that people avoided traveling by plane during the pandemic.
About United Airlines
United Airlines can be considered one of the largest airline carriers in the United States, which has been in operation for almost one hundred years. The carrier has always been known for its commitment to the adoption of technological advancements. For instance, the company was the first in the industry to utilize jetliners which revolutionized the airline travel experience and enabled people to travel farther distances faster (“United Airlines. Firsts in aviation,” n.d.). Over the years, United Airlines has managed to establish its presence not only in the United States but also internationally. As a result, the company operates hundreds of domestic and international routes, and its services are used by millions of people annually (“United Airlines. Firsts in aviation,” n.d.). Additionally, the company is a founder and member of the Star Alliance, a network of major airlines from different parts of the planet.
United Airlines and the Pandemic
United Airlines, as a notable part of the global airline industry, experienced large financial losses because of the small number of passengers using its services during the pandemic. Before the pandemic, international routes were essential for United Airlines’ economy, yet in 2020, the revenue from them decreased by more than 80% (Koenig, 2021). Domestic traffic yielded the largest share of the company’s revenue, yet in 2020 it considerably decreased. As a result, the company’s domestic revenues in 2020 suffered a drop of more than 70% (Koenig, 2021). Thus, United Airlines faced a challenging situation and had to find a way to stay solvent. The total amount of losses of United Airlines by the end of 2020 surpassed $7 billion (Koenig, 2021). The company will likely continue experiencing financial problems.
The main strengths of United Airlines include the size of the company and the diversity of its operations which enables it to operate numerous routes and quickly adjust to servicing those most profitable. Additionally, the carrier is popular with passengers, and in 2019 alone, there were more than 150 million people who flew with United Airlines (Salas, 2021). The main weakness of United Airlines is its reputation, and according to the customer review platform, Skytrax, United Airlines scored three stars out of five (“United Airlines,” n.d.). The primary opportunities for the company are offering lower prices to attract clients and reducing its expenses. The key threat to the company is the prolongation of government restrictions capable of further disrupting air travel.
Apart from government restrictions, political factors include authorities’ assistance to companies affected by the pandemic. Special loans and incentives are given to carriers to help them survive a difficult period. The key economic factor impacting United Airlines is the lack of resources among potential passengers due to financial problems caused by the pandemic. The social factor affecting the company is the potential fear of flying, which many people experience due to the threat of being infected with the virus. The technological factor faced by the company is the possible emergence of new aircraft on the market, which will be more comfortable than the ones present in United Airlines’ fleet. Legal factors which United Airlines has to consider concern government regulations in the sphere of emissions.
United Airlines’ Goals
United Airlines is a company that has been steadily losing money almost for two years now, burning cash. Currently, it is unclear whether the pandemic will stop shortly, yet the company must still embrace a certain strategy. According to the official report published by United Airlines at the beginning of 2021, the company decided to focus on recovery to improve its financial situation (“United announces 2020 financial results,” 2021). The company wants to reform its business to be more resilient and able to counter the challenges related to the pandemic. By 2023, the company wants to achieve a full recovery from the COVID-19 pandemic and reach an EBITDA margin larger than that in 2019 (“United announces 2020 financial results,” 2021). Such goals will be difficult to achieve if the pandemic continues beyond 2022.
United Airlines’ Pandemic Measures
During the pandemic, the company adopted a long list of measures to adjust to the new pandemic circumstances and make travel safer for passengers. United Airlines introduced cleaning and disinfection policies in partnership with Clorox to maintain its airplanes clean, as well as installed electrostatic spraying aircraft interiors (“Coronavirus (COVID-19) updates,” n.d.). The company’s clients also received an option to undergo touchless check-ins with the help of special kiosks deployed in more than 200 airports (“United announces 2020 financial results,” 2021). Additionally, all United Airlines passengers can now check-in, using the carrier’s official mobile app, the restrictions implemented in countries and cities of their destination (“United announces 2020 financial results,” 2021). The company is committed to continuing to offer excellent service even during the pandemic.
The behavior of Airlines Passengers During the Pandemic
The pandemic brought numerous challenges to people, which limited their ability to travel and especially use the services of airline carriers. Many people lost their jobs due to the pandemic, and they did not have the means to go on vacation or simply visit their relatives living in another state. There was also a group of people who were scared of traveling in closed quarters due to the fear of contracting the disease and facing negative health outcomes. According to Lamb et al. (2021), the absolute majority of airline passengers, when asked to share their opinions, reported having trust issues and fear associated with being near other people. The detection of the infected passengers also led to cancellations of flights. As a result, during the pandemic, many people preferred buying refundable tickets as a way to avoid losing money if their flights got canceled (Monmousseau et al., 2020).
Demand for Safe Travel Options
The aforementioned issues experienced by airline passengers indicate the presence of one common theme, namely, people require a safer way of traveling by plane. People who use airlines’ services during the pandemic are not sure whether their experience on a plane will not lead to them becoming infected. Similarly, when a flight gets canceled during the pandemic, the cause of it often concerns the discovery of an infected passenger. The primary opportunity concerning these problems which United Airlines can utilize is the provision of safe travel options which would minimize the probability of passengers getting the virus. As of now, the only way of guaranteeing maximum safety to people is through vaccination. As a result, United Airlines can offer certain flights only for inoculated individuals as its new feature.
The main proposal of the current project concerns the introduction of safe travel flights by United Airlines. Instead of opting for face masks, the company has to introduce flights for fully vaccinated passengers only. Such measures are even more discriminatory towards people who refuse to get inoculated. Some people choose not to get a vaccine because of their underlying health conditions, while others believe that vaccines are inherently dangerous. Such people will not have the opportunity to utilize United Airlines’ special safe flights. Thus, the discriminatory actions against such people on the part of United Airlines can result in the loss of numerous clients. Some people may choose not to use the services of a company that openly decides to work only with a certain group of clients and discriminate against another.
Implementation of the new approach requires the company to design a clear and detailed plan as well as protocols that all employees will follow. The company’s top management must focus on designing such an action plan which will serve as the foundation for the introduction of safe travel options. Official guidelines on the new safe travel option will facilitate the process of adoption and will make it easier for employees to perform. The offering of safe travel programs will require joint efforts on the part of all United Airlines departments.
The primary recommendation of the project is the introduction of safe travel involving the provision of special flights for inoculated people. Thus, people who fear being close to others due to the possibility of contracting the disease will be able to use United Airlines’ flights with fewer risks. Additionally, another problem targeted by the safe travel option is the cancellation of flights due to the discovery of passengers with COVID-19 symptoms. A flight without unvaccinated people onboard is less likely to get canceled because its passengers are more protected against the disease.
The safe travel option is a viable way of gaining a competitive advantage in the market. Such a strategy can be considered one based on differentiation which was described by Porter (Thuis and Stuive, 2019). The introduction of the safe travel lights aligns with the strategic goals of the company, which were previously outlined. The flights for the vaccinated will assist the company in reaching full recovery from the pandemic and the restrictions related to it by the end of 2023. Finally, the provision of flights for vaccinated people is an opportunity for the company to restore its reputation. Essentially, by giving people a chance to travel in a safe environment, the company shows its commitment to the health and safety of clients.
United Airlines’ financial situation, as well as that of the entire airline industry, was significantly undermined due to the start of the COVID-19 pandemic, which caused the company to lose $7 billion. Nevertheless, the company plans to recover from the consequences of the pandemic by 2023. Research shows that many people refuse to travel by plane during the pandemic due to the fear of contracting the disease. United Airlines can use the existing situation to its advantage and offer safe travel to vaccinated people to achieve its recovery targets.
Airline industry statistics confirm 2020 was worst year on record. (2021). IATA. Web.
Coronavirus (COVID-19) updates. (n.d.). United Airlines.
Estrada, R., Arturo, M., Evangelos, K., & Minsoo, L. (2021). Stagpression: The economic and financial impact of the COVID-19 pandemic. Contemporary Economics, 15, 19-33.
Iacus, S. M., Natale, F., Santamaria, C., Spyratos, S., & Vespe, M. (2020). Estimating and projecting air passenger traffic during the COVID-19 coronavirus outbreak and its socio-economic impact. Safety Science, 129, 104791.
Koenig, D. (2021). United Airlines posts $1.9 billion loss in pandemic-laden 4Q. ABCNews. Web.
Lamb, T., Ruskin, K., Rice, S., Khorassani, L., Wintera, S., & Truonga, D. (2021). A qualitative analysis of social and emotional perspectives of airline passengers during the COVID-19 pandemic. Journal of Air Transport Management, 94, 1–8.
Monmousseau, P., Marzuoli, A., Feron, E., & Delahaye, D. (2020). Impact of Covid-19 on passengers and airlines from passenger measurements: Managing customer satisfaction while putting the U.S. Air Transportation System to sleep. Transportation Research Interdisciplinary Perspectives, 7, 1–11.
Nicola, M., Alsafi, Z., Sohrabi, C., Kerwan, A., Al-Jabir, A., Iosifidis, C., Agha, M., & Agha, R. (2020). The socio-economic implications of the coronavirus pandemic (COVID-19): A review. International Journal of Surgery, 78, 185–193.
Salas, E.B. (2021). Number of passengers boarded by United Airlines from F.Y. 2014 to F.Y. 2020. Statista.
Stalnaker, T., Usman, K., Buchanan, A., Alport, G., Taylor, A., & Heilakka, R. (2021). Airline economic analysis 2020 – 2021. Oliver Wyman. Web.
Thuis, P., & Stuive, R. (2019). Business administration. Routledge.
United Airlines. (n.d.). Skytrax.
United Airlines. Firsts in aviation. (n.d.).