THE NEUTRAL ZONE
The airline industry has been struggling since coronavirus-related travel restrictions have led to decreased demand, which reached a low of 3% in April compared to the same time last year. As states are opening up, the Transportation Security Administration reported screening 500,000 passengers or about 15% of normal demand on Thursday.
The largest airlines in the U.S. have implemented programs to help passengers feel safe for the length of a flight. Face masks have been required on most airlines for the past few months, but Southwest and Delta also extended their policies of keeping the middle seat open until the end of September. JetBlue has promised passengers will not sit next to a stranger until July 31, which could raise the cost of tickets.
After bleeding cash for months, airlines are looking to increase their available cash flow before a potential second wave of infections. United Airlines pledged $5 billion of its $20 billion loyalty program in order to receive another government loan. Currently, the company is predicting to fly only one-quarter of its usual schedule in July. American Airlines is expecting to fly 55% of their usual routes in the same month, showing one of the most robust travel plans in the U.S.
Airlines in America are predicted to have $10 billion in unused passenger tickets. U.S. Public Interest Group is calling for airlines to be legally required to provide cash refunds on canceled flights. In early June, five House Democrats proposed the Cash Refunds for Coronavirus Cancellations Act of 2020 to require airlines to give cash refunds, whether the passenger or airline cancels the tickets.
As travel begins to see a slow increase in demand compared to earlier in the pandemic, travel-related coronavirus cases still pose a threat. In China, 17 passengers on a June 11 flight from Dhaka tested positive for COVID-19. The Chinese government quickly moved to ban all travel from Dhaka for the next month.
Unfriendly skies: What it’s like to fly in the US right now – Traveller – 6/14/2020
Air travel now is a matter of far fewer people, more masks, more disinfectant, less food and drink; and, unless you’re a nosy reporter, a lot less conversation. I look back at my photos of that flight and see a surreal gallery: a series of unknowable, masked humans, their eyes cast down, amid a sea of blue vinyl and gray plastic.
Airline passengers brought COVID-19 into LAX in March — and no one warned the public – Los Angeles Times – 6/14/2020
It was one of two long-haul flights into LAX in March identified by The Times in which public health officials failed to alert passengers and crew who had flown with a person who later testedCOVID-positive. In the other, a March 8 flight from Seoul, the stricken passenger reported running a fever days before boarding the aircraft and went into cardiac arrest the morning after she landed, becoming the first confirmed COVID-19 death in L.A. County.
Will A $4,000 Tax Credit For Travel Be In The Next Stimulus Package? – Forbes – 6/12/2020
The travel industry lobby has pitched a handful of policy proposals for inclusion in any future package. The tax credit would “encourage domestic business and leisure travelers to travel within a specified time frame, similar to what was done through the homebuyer tax credit in the wake of the housing crisis.” The credit would apply to any travel expense “over $50 that is incurred while traveling away from home in the U.S., with explicit reference to the expense of meals, lodging, recreation, transportation, amusement or entertainment, business meetings or events, and gasoline,” according to the proposal.
How Europe’s low-cost airlines are surviving the pandemic without billion-dollar bailouts – Quartz – 6/15/2020
As flights ramp up, budget airlines like Wizz, Ryanair, and easyJet have been more adept at managing their cash burn while their aircraft are grounded, which has helped them weather the pandemic disruption. Jarrod Castle, an analyst at UBS, points out that these companies are called “low cost” for a reason.
Bloomberg on Twitter, 6/15/2020: Travel demand probably won’t return to last year’s levels until about 2023, according to travel-search site Kayak
Josh Barro on Twitter, 6/15/2020: Air travel is coming back faster than some people expected, but as with most of the economy it’s likely to have a fast-then-slow recovery, with the airline industry remaining smaller than it was in 2019 for quite some time.
Travel + Leisure on Twitter, 6/15/2020: Here’s How Many People Are Actually Flying Right Now, According to the TSA (Video)
TransportStats on Twitter, 6/15/2020: US passenger #airlines after-tax net loss of $5.2B in the first quarter of 2020, ended a streak of 27 consecutive quarterly profits. Compared to profits in 4Q2019 ($3.4B) and 1Q2019 ($2.0B) #aviation #travel