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 plunged the U.S. airline industry into an unprecedented crisis, with experts comparing the severe drop in demand and revenue to the market crash of 2008 or 9/11.
- Major carriers, including United, Delta, and American, have announced drastic capacity cuts, grounding hundreds of aircraft, implementing hiring freezes, and expecting significant employee leaves, with international flights particularly affected.
- The industry lobbying group, Airlines for America (A4A), is urgently seeking $50 billion in government support through grants, loans, and tax relief, citing an unsustainable economic environment.
- President Trump has pledged 100% government backing for the airlines, stating his administration will "help them very much" and "backstop the airlines."
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