A handful of aviation industry experts believe the social and economic fallout in the US from the COVID-19 virus is the worst seen since the market crash of 2008, others since 9/11, while still others say the airline service cutbacks and employee layoffs are simply unprecedented. Calling the current situation dynamic would be an understatement. In the end, comparisons really don’t matter much. What does is, “The bad news is … getting worse,” United CEO Oscar Munoz told employees on Saturday, March 14, in a letter. “We expect both the number of customers and revenue to decline sharply in the days and weeks ahead.” Munoz announced, “an approximately 50-percent cut in capacity for April and May. We also now expect these deep cuts to extend into the summer travel period. Even with those cuts, we’re expecting load factors to drop into the 20- to 30-percent range—and that’s if things don’t get worse.”
Airlines Wrestle With Fallout From COVID-19
Key Takeaways:
- The COVID-19 pandemic has caused an unprecedented collapse in air travel demand, leading major US airlines like United, Delta, American, and Southwest to implement drastic capacity cuts and suspend operations for hundreds of aircraft.
- Airlines for America (A4A), representing the US airline industry, has requested $50 billion in government financial assistance, including grants, loans, and tax relief, to address the unsustainable economic impact.
- President Trump has committed to "backstopping" and providing significant support to the airlines, acknowledging that the crisis is not their fault.
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