Airlines Face Uncertain Times

By Thomas Price Monday, October 5, 2020

It is no surprise to anyone that in 2020, with ongoing concerns involving the COVID-19 pandemic, many different industries have seen unparalleled losses. Of those industries, it can easily be argued that the airline industry has struggled the worst. With borders being closed and stay at home orders issued, the market for commercial air travel has never been smaller. These struggles look like they may be getting even worse as the government sponsored, Payroll Support Program, that had previously given the airline companies $25 billion in aid has expired. With talks still locked in Congress for extending that aid, what exactly has the fallout been for the major airline companies, and what can be expected from Congress in the coming weeks in order to curb as much harm as possible?

Row of airplanes at an airport.

The Airline Industry in 2020

Airlines have seen unparalleled struggle to stay afloat as demand for flights has dwindled down to almost nothing. Without the United States government interfering, many would have most likely already gone under. Economic analysis for the travel industry as a whole has estimated that over $500 billion have already been lost in revenue in 2020, with recovery likely to take years just to reach previous heights. In fact it is estimated that it may take until 2024 until travel revenues return to 2019 levels.

As for individual airlines, each has seen their revenues tumble this year to incredible lows. American Airlines reported a paltry $1.622 billion in their most recent quarterly report. In comparison to the same quarter in 2019, this is an astounding 86.44% decline in revenues. American Airlines are not alone in this struggle as other major companies such as Delta and United have also seen similar collapses in revenue. For Delta Airlines, the company generated $1.468 billion in their most recent quarterly report. The decline in revenues from the same quarter in 2019 to 2020 is slightly higher than their competitor in American Airlines at 88.29%. United Airlines has also struggled tremendously reporting only $1.475 billion in their most recent quarter. Again, this is a similar decline in revenues in comparison to 2019 with the dropoff being at 87.06%.

While this is already a devastation of the industry as a whole, the expiration of the Payroll Support Program could lead to even more dire circumstances for the thousands who count on these companies for employment.

Loss of Jobs and Congressional Standstill

At the end of September, the Payroll Support Program expired, and while Congress had been in a back and forth to extend the aid for another few months, it did not materialize. As a result, the aid has been cut, and in response to this, over 32,000 employees across different airline companies have been furloughed until further notice. This will cost them their healthcare, benefits, and stream of income in the midst of the worst economic recession since the Great Depression. This may not be the end of it as well. As it currently stands, Delta Airlines plans to furlough 1,900 of their pilots on November 1st, unless conditions improve either through increased air travel or with the extension of some sort of federal aid.

In response to this, Speaker of the House, Nancy Pelosi, has urged airlines to hold off on furloughing employees, as she plans to make headway in getting the Payroll Support Program back on its feet. While it appears that the standstill in Congress is slowly moving toward an eventual compromise which should at least provide some aid, it is unlikely to happen in the next few weeks. The talks hit another roadblock after Senator Mike Lee tested positive for COVID-19, which puts doubt into whether or not the Senate will meet at all next week despite scheduled plans.

The House of Representatives is still set to reconvene next Tuesday. The delays have already cost tens of thousands of employees their jobs and their healthcare, so there is certainly a level of urgency present in Congress to get something passed soon. The goal is to gain another $25 billion to cover the payroll support in order to keep the airline workforce employed and under benefits.

Final Conclusions

The outlook for the airlines as a whole and more specifically, their employees continues to look bleak as congress is still at odds with each other. With the possibility of the Senate not meeting next week after positive COVID-19 cases, and The House of Representatives still trying to pass any legislation in support of workers in the airline industry, the Congressional standstill has now officially run out of time. Over 32,000 workers have already been furloughed with the possibility of more in the near future. The pressure is certainly on for the government to provide aid in order to regain thousands of workers’ healthcare as the COVID-19 pandemic continues to sweep across the globe.

About the Author

Headshot of Thomas Price

Tom Price is a writer focusing on Entertainment and Sports Features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.

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