PerspectiveInternational Air Travel as an Indicator of COVID-19 Economic Recovery

It seems likely that routine international air travel may not resume until the end of June at the earliest. Paul Rozenzweig writes in Lawfare that that, more than President Trump’s wishful thinking, is a true indicator of what economic recovery will look like.

He adds:

As any good student of law and economics would say, the best indicator of commercial expectations can be found in commercial enterprises—the market signals that indicate what businesses truly anticipate.

And if any enterprise is likely to be a leading indicator of economic expectations, it seems that the airline industry is a good candidate. Few other industries are under as much economic pressure (and thus anxious to resume operations), yet few are at as much risk from the virus (both because international travel is a significant vector for the spread of infection and because airplanes are, themselves, potential incubators of illness). And, unlike the cruise industry, which is similar in many respects, air travel is not a wholly discretionary choice. When air travel resumes, the first travelers will be those for whom it is essential or nearly so.

International travel, in particular, is likely to be the most sensitive indicator of a full recovery. The globalized nature of the pandemic has led many nations to close their borders or restrict entry. We can anticipate that domestic travel restrictions will ease much earlier than international ones and, thus, that the resumption of international air travel is likely to be a realistic signal of the resumption of economic activity at a level approaching that of pre-pandemic “normal.”