1. Airlines plot course for coronavirus survival
Illustration: Aïda Amer/Axios. Photo: Ann Ronan Pictures, Bettmann/Getty Images
With the coronavirus pandemic worsening and no more help in sight from the U.S. government, airlines and airports are scrambling to survive the worst crisis in aviation history.
Why it matters: Promising vaccines offer hope for a recovery, but not until large swaths of the global population are immunized, and that could take years. To get people flying again, airlines are pushing testing and rethinking the travel experience.
With the coronavirus pandemic worsening and no more help in sight from the U.S. government, airlines and airports are scrambling to survive the worst crisis in aviation history.
Why it matters: Promising vaccines offer hope for a recovery, but not until large swaths of the global population are immunized, and that could take years. To get people flying again, airlines are pushing testing and rethinking the travel experience.
The big picture: A record 26 million passengers cleared U.S. airport security during the 10-day Thanksgiving travel period in 2019.
- This Thanksgiving, with cases soaring and health officials urging people to stay home, AAA predicts holiday air travel could fall by nearly half.
- But even that would be a welcome Thanksgiving bump over recent passenger traffic, which is down 65% from a year ago.
What they're doing: Airlines have partnered with premier medical institutions like the Cleveland Clinic and Mayo Clinic to create new health safety protocols.
- They've adopted mask requirements (the Federal Aviation Administration has none) and added enhanced cleaning between flights.
- Despite the hit to revenues, some are limiting passenger capacity by blocking middle seats. (Delta Air Lines has said it will continue blocking middle seats through the first quarter.)
Now they're trying to prod government leaders in the U.S. and Europe to lift onerous quarantine rules that have all but stifled international travel.
- They're urging pre-flight testing and digital health passes to verify who's safe to fly. The cost would likely get rolled into your airfare, as airport security fees do now.
- The industry hopes results from early testing efforts at select airports will convince government officials to safely reopen borders, says David Evans, co-CEO of Collinson, which runs London's Heathrow Airport test site.
- Hawaii, which lifted its quarantine restrictions in October for those who test negative before arriving, is seeing a promising uptick in tourist travel, says Airlines for America.
Where it stands: Government aid that helped airlines limp along for a while — and keep employees on the payroll — expired Oct. 1, and further relief isn't likely anytime soon.
- An estimated 90,000 airline jobs will be gone by year-end, and 1 in 4 planes remain parked.
- With $36 billion in losses already this year, U.S. carriers are burning cash at a rate of $180 million per day.
- To offset those losses, they're flying more cargo and adding leisure flights to the Sunbelt this winter.
- They've also taken on $68 billion in new debt — a portion of it in U.S. Treasury loans — and digging out of that hole will hamper future growth.
There's broad public interest in getting planes back in the air: they're needed to distribute the vaccine.
What to watch: The pandemic is accelerating the digitization of the travel experience, which had already begun with touchless kiosks in airports, for example.
- Companies are rushing to deploy new smartphone technology that would personalize and streamline the journey — and even notify you of potential virus exposures to curtail the spread.
- "This is the moment in time. We can retool everything," said Ian Matheson, CEO of 3BP Solutions, an aviation consulting firm in Vancouver, B.C.
The bottom line: These are risky times for airlines. But those that can keep passengers safe and healthy will likely take off again.