While appreciative of the nearly $60 billion in aid from the government’s $2 trillion stimulus package for economic relief, the airline industry says it’s not a cure-all for the waning demand in travel coronavirus.
“While this assistance is welcome, it’s important to remember that the relief package is not a cure for the unprecedented challenges we face,” Delta Air Lines CEO Ed Bastian told employees in a memo, according to CNBC.
Both Delta and United Airlines said going forward they are likely to become smaller airlines with fewer employees, although part of the government aid package, or some $25 billion in grants, requires the airlines to continue to pay employees through the end of September. The remainder of the bailout comes in the form of loans.
But given the spread of the virus, airline executives expect the new normal – drastic cuts in service, flights barely a quarter full – to last for quite a while.
“Based on how doctors expect the virus to spread and how economists expect the global economy to react, we expect demand to remain suppressed for months after that, possibly into next year,” United CEO Oscar Munoz and United president Scott Kirby, who’s scheduled to take the helm in May, wrote in a message to employees. “That means being honest, fair and upfront with you: if the recovery is as slow as we fear, it means our airline and our workforce will have to be smaller than it is today.”
Most airlines have asked employees to take voluntary unpaid leaves of absence or early retirement.
Mandatory stay-at-home measures implemented by more than a dozen states, inhibiting more than 80 million Americans from leaving their homes except to go to work or essential places of business such as grocery stores and banks, have contributed to the drastically falling numbers in airline travel and hotel stays.
But Kirby and Munoz remain optimistic.
“So when travel demand returns — and it will return — we will bounce back and be ready to accelerate towards our goal of becoming the best airline in the history of aviation,” they wrote in their memo.
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American Airlines Increasing Domestic Service for the Summer
Like the rest of the United States, American Airlines is ready for the summer.
As the demand for air travel slowly rises, American is bringing back suspended routes, offering double AAdvantage miles, reopening Admirals Club lounges and offering enhanced cleaning protocols.
American is planning to fly 55 percent of its domestic schedule and nearly 20 percent of its international schedule in July as compared to the same period last year, totaling around 40 percent of the airline’s systemwide capacity compared to July 2019.
Demand has started to rebound, as the carrier reported it flew a daily average of about 110,000 customers per day in May, which is an increase of 71 percent over the approximately 32,000 passengers it transported daily in April.
“We’re seeing a slow but steady rise in domestic demand. After a careful review of data, we’ve built a July schedule to match,” American Senior Vice President Vasu Raja said in a statement. “Our July schedule includes the smallest year-over-year capacity reduction since March. We’ll continue to look for prudent opportunities to restore service so our customers can travel whenever and wherever they are ready.”
Starting on June 22, American will begin reopening Admirals Club lounges around the country with pre-packaged snack offerings and a full-service bar for customers to enjoy complimentary beverages.
As for the airline’s commitment to health and safety guidelines, American will utilize enhanced cleaning measures, enforce social distancing protocols and provide limited food and beverage offerings.
The carrier is also allowing customers to book with confidence, as American announced it would waive change fees for customers purchasing tickets by June 30. Travelers are allowed to change their origin and destination cities as part of this offer, but must pay any fare difference.
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