The airline industry is used to some level of guesswork, even in good times. No one really knows how demand will evolve, whether a new route will actually perform according to expectations or what the response by competitors will be. No matter how analytical the approach is, no matter how experienced the network planning department, some experiments will always fail.
In good times, airlines typically have the financial wherewithal to deal with some level of underperforming markets. But now, as the industry takes its first steps to emerge from an unheard-of crisis, it faces the worst possible combination: There is no financial margin left for wrong bets on capacity, pricing and network rebuilding, and the uncertainty about when, where and how demand might return is greater than ever.
Only over the past few weeks have some encouraging signs begun to emerge on a broader scale, probably good enough to call the short-term trend a recovery, but not good enough to call it stable upward development. And even as traffic begins to slowly come back, airlines will soon face the winter season, when most carriers lose money even when business is booming.