Question

How has COVID-19 impacted Southwest Airlines shareholders and stakeholders? What are the issues?

Answer 1

Coronavirus has negatively impacted the whole world. It has kept the world on a standstill, and everyone is inside the houses waiting for this pandemic to end. However, the current scenario is disturbing because it has affected many enterprises' contractual obligations because of the provisions of force majeure and frustration. The aviation industry has also come in the ambit of COVID-19. It is because people are refraining from traveling to other countries or even within their own country. Southwest airlines is one of the companies, which coronavirus affected. The company's CEO had already updated the world about a drastic fall in the gains and the airline's customer base. The airlines also mentioned that if the world's situation does not improve in the upcoming three months, it will have to function as a much smaller airline. It is because the company will not have enough funds to own many airplanes to continue its operations.

Moreover, the China Southwestern airlines will observe a considerably more drastic fall because of China's opposition from most countries. Hence, the airlines will have to observe losses. Nevertheless, the airline's managers are also getting ready to fight against the after-effects of the pandemic. The losses might turn into gains after the pandemic gets over, and the airlines begin the operations. However, for the time being, the company has to go through losses.