The end the airlines ?

One of the sectors that got hit the most by the pandemic, is the travel sector and more specifically the airlines. The airlines were benefiting from the tourism sector but also a big part of their revenue was coming from the Business sector. 

A lot of businesses had business class tickets, loyalty cards, and even memberships in the same cases - they were travelling every single week and in some cases overseas to attend business meetings, conferences, explore potential deals, etc. Due to the pandemic, however, businesses started using technology for those meetings, and companies like ZOOM took a big chunk of revenue from the airline industry. 

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Most of the businesses they found out, that video conferencing works as good or even better (in some cases) as meeting someone in person. Simply, they can get the job done without wasting lots of resources. Very few of the businesses, if at all, are looking to get back to first class tickets, and have their employees travelling for meetings that can be done through ZOOM.

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It’s unknown how long it will take for the travel sector to recover, and how much of those revenues will come back. The sector is shrinking, and airlines are in trouble at the moment, - even those who even have in mind to create projects, like supersonic travel for businesses, in order to get from one continent to another (some of those projects promising) in under 30 minutes - I’m not sure they will come to fruition. 

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There is a lot of uncertainty around the travel industry, we don’t know how many people will choose to travel and even when they will be able to do it. Personally, I believe, people will continue to go on vacations and places like Hotels, AIRBNB and theme parks will recover in the next 2 to 3 years, however, the question comes down to how and even when airlines will make up their loss revenue from the business sector, as represents a big chunk of their total revenue. 

I don’t have any investments in airlines or REITS and I’m not looking to add any in the next 2 years, unless there's a clear path to revenue and profitability. 

What’s your thoughts for the airlines and the travel sector, let me know in the comments below?