As millions across the globe do their part to slow the spread of coronavirus, domestic and international travel have grinded to a halt. With borders closing and social distancing in full effect, U.S. airlines find themselves fighting to stay in business.
Just how bad have things gotten? According to a story from The New York Times yesterday, an American Airlines flight Monday from New York to Los Angeles (a route typically heavy with high revenue business travelers) departed with a total of six passengers onboard.
In response to plummeting demand, American has reduced its international routes by 75% and seen domestic travel cut nearly 40%. While reductions in flights help mitigate the airlines’ biggest cost – fuel – they aren’t the only steps being taken to keep AA afloat. Hot meals, (including warm nuts) will not be offered on flights, Admirals Clubs in major hubs have reduced hours or are closed, and some flight attendants and pilots are being asked to take unpaid leave.
While Americans’ situation may sound bad (and it is), United’s is even worse. As of this writing, the Chicago based airline has reduced international routes by 90% and domestic flights by 52%. The flights United does have in the air are operating at a shockingly low capacity rate of 10%.
Delta, the nation’s highest rated airline, is also struggling to stay afloat. In a message to employees Wednesday first reported by TPG, CEO Ed Bastian stated, “The coronavirus is a challenge that is clearly the biggest challenge this company has ever faced in our history,” he said. “It feels like a war that is at hand.”
Delta has also made drastic cuts, reducing flights domestically by 70% and 80% on international routes.
Despite the massive hemorrhaging of cash, all of the airlines mentioned in this article are doing their best to ensure travelers are rebooked on new flights or receive credit or a refund for those that are cancelled. It’s important to note, that if a passenger’s flight schedule has changed, the passenger can cancel or rebook for another date/time. However, in those cases, the airline is only required to provide a voucher good for the original value of the ticket and the passenger is responsible for any difference in fare for a new itinerary. If an airline cancels a ticket, by law, the passenger is entitled to a full refund.
So, is the airline industry going to cease operations entirely in the coming months? Not likely. Thanks to multiple visits to Washington, D.C., the CEO’s of all the major airlines are likely to see financial assistance from the $2 trillion COVID-19 stimulus package to the tune of $58 billion.
Should the aid package pass Congress, the airlines will survive – courtesy of the American taxpayer.
Michael McGonigle is an anchor for DC TV and contributor to The Daily Citizen.