PPRuNe Forums - View Single Post - Airlines too pessimistic about air travel recovery: merged threads
Old 31st May 2020, 11:41
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PilotLZ
 
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The concept of protective pessimism and erring on the safe side increases an airline's cash reserve margin, should the best-case scenario not materialize. Of course, we all hope that it will, but in case it doesn't, an extra safety net of saved cash and minimized overhead costs will improve the chance of riding it out. If there's a sustained positive trend throughout Q3 and Q4 of 2020, airlines won't be too challenged to ramp up capacity for 2021. Lots of available aircraft, lots of unemployed personnel, lots of vacant slots available these days. Whenever demand picks up whoever's still in business and has solid cash reserves will be quick to benefit from it. But, to fulfill the latter two conditions, a conservative approach while uncertainty is still great helps a lot.
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