Kyler Heise
Pronouns: He/Him
Research Mentor(s): Weikun Yang
Research Mentor School/College/Department: Strategy / Business
Program:
Authors:
Session: Session 4: 1:40 pm – 2:30 pm
Poster: 74
Abstract
The U.S. airline industry, pioneered by the first commercial flight in 1914, has connected Americans throughout the domestic and international landscapes for business and leisure. Since this first commercial flight, the industry has evolved into a complex network of nearly 87,000 flights per day, with an estimated 11.3 million employees. In recent years, the U.S. airline industry has experienced steady growth with about a 4.3% increase in air travel passengers between 2018 and 2019. This growth was uprooted by the onset of the COVID-19 pandemic in early 2020 (a year that experienced a 59% decrease in air travel passengers). This drastic decrease, propelled by travel restrictions and general fear of the virus, forced airlines to adapt to this demand shock to cut losses or as Delta’s CEO Ed Bastian put it, reduce the amount of “cash burned.” These adaptations included cost-cutting measures such as lay-offs, wage decreases, and early retirement packages for older workers. Moreover, airlines altered route design to focus on leisure travel. Airlines also lobbied the government for loans and relief packages to stay afloat while the virus passed. Furthermore, with a lack of demand, airlines decided to retire their old aircraft as well as use extra aircraft for cargo operations. The air cargo industry took off during the pandemic and many airlines attempted to realize this opportunity by focusing resources on cargo. This included using seat, aisle, and overhead bin space as well as the underbelly of the aircraft to house cargo and extended to complete conversion of passenger carriers into cargo carriers. However, entering into cargo operations resulted in many challenges and decisions for managers to make. These decisions included deciding which airlines were best suited for conversion (typically older aircraft) and how to manage regulations that were associated with travel (holding cargo in place, temperature for storing medicines, and controlling load factors on the aircraft).
