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 unprecedented and severe disruption to the US aviation industry, leading major airlines like United, Delta, and American to announce drastic capacity cuts (up to 75%) and implement other cost-saving measures.
- The industry lobbying group, Airlines for America (A4A), has requested $50 billion in immediate government assistance, including grants, loans, and tax relief, due to the unsustainable economic environment.
- Thousands of airline employees are expected to take unpaid leaves, and President Trump has pledged 100% government support to the airlines, acknowledging they are not at fault for the crisis.
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