Some Industry Workers Pay Quite a Price for the Pandemic

A recent newspaper article stresses the importance of planning and financial literacy.

Thursday, December 02, 2021 at 10:00 AM ET

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When the pandemic hit in 2020, many airline workers found themselves in a tough situation that required drastic measures. Credit: Adobe Stock

Key Takeaways:

While the aviation industry has largely recovered and is profitable post-pandemic, its employees, such as Delta workers, suffered severe long-term financial damage from early 401(k) withdrawals, incurring penalties and losing an estimated $4 billion in lifetime retirement savings.
Many employees were unaware of or did not utilize less damaging alternatives for accessing funds during the crisis, such as 401(k) loans, penalty-free CARES Act withdrawals, or Roth IRA principle withdrawals.
The article emphasizes the critical importance of building a robust emergency fund to cover several months of expenses, preventing the need to tap into and penalize retirement savings during unexpected financial difficulties.
Ultimately, the author advocates for better basic financial education to equip individuals with the knowledge to make informed decisions and avoid such costly financial setbacks in the future.

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Despite turmoil from the omicron variant, the COVID-19 pandemic is over for the aviation industry. No, international and business travel haven’t yet reached 2019 levels. However, as someone who spends a lot of time in airports around the country, I can tell you that business is booming.

In the airlines, passenger demand far out-strips seat supply. As long as companies are charging fares high enough to make money, they are, in fact, profitable. It will take time for some companies to pay off the massive loans they took out to survive the pandemic, but in a few years this pandemic will be remembered as nothing more than a few moments of light chop.

In short, the airlines got off easy.