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 and severe crisis for the U.S. aviation industry, with airlines experiencing dramatic drops in customer demand and revenue, comparable to or exceeding the impact of 9/11 or the 2008 crash.
- Major U.S. carriers, including United, Delta, American, and Southwest, have implemented drastic capacity cuts, with some international routes reduced by as much as 75%, leading to thousands of employees facing unpaid leaves and widespread hiring freezes.
- Airlines for America (A4A), representing the industry, requested $50 billion in government assistance (grants, loans, and tax relief) due to the "unsustainable" economic environment, a request President Trump publicly committed to fulfilling with 100% backing for the airlines.
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