Ten major U.S. airlines -- Alaska, Allegiant Air, American, Delta, Frontier, Hawaiian, JetBlue, United, SkyWest and Southwest -- have agreed to participate in the federal government’s Payroll Support Program, Treasury Secretary Steven Mnuchin said yesterday.
“Conversations continue with other airlines regarding their potential participation,” according to the press release announcing the development.
“The airlines, which have been hit hard by border closures around the globe, had been working with the Treasury Department to secure relief to keep workers on the payroll. With the majority of their flights axed because of the lack of demand, several airlines have drastically cut staff hours, some have continued service with a single passenger and others have suspended routes,” Claire Atkinson writes for NBC News.
“Airlines have been crushed financially by an unprecedented drop in air travel demand due to the coronavirus pandemic. The number of people flying is down 95% since the beginning of March, and as a result, the bigger carriers are burning through tens of millions of dollars a day,” reports NPR’s David Schaper.
“To prevent mass layoffs of airline employees, Congress authorized $25 billion in payroll grants, along with another $25 billion in loans, as part of the $2.3 trillion coronavirus economic relief package approved last month. The CARES Act required the Treasury Department to begin doling out the payroll support last Monday,” Schaper continues.
“Mnuchin’s statement did not include details of the agreement. However, individuals close to the discussions, who were not authorized to speak publicly, said under the terms of the deal 70% of the money would be given to the airlines outright and 30% would have to be paid back to the government. In addition, the government would be given warrants equal to 10% of the amount the carriers receive, these individuals said,” Lori Aratani and Ian Duncan write for The Washington Post.
"Separately Tuesday, the Transportation Department announced how it plans to distribute $10 billion in funding for airports, which are suffering alongside the airlines. Much of the money will go to the biggest hubs, but even small airfields will get some aid,” they add.
A Wall Street Journal hed this morning tells us -- lest you had any doubts -- “The Coronavirus Economic Reopening Will Be Fragile, Partial and Slow.”
“Walt Disney Co. reached a coronavirus milestone of sorts last month when it reopened a portion of its Shanghai Disney Resort as China’s pandemic began to ebb,” write Erich Schwartzel, Alison Sider and Heather Haddon in their lede.
“But a trip to Tomorrowland may never be the same. Guests at the Shanghai resort must wear masks at all times, removing them only for eating. Hours and capacity are limited. And just to gain entry, visitors must submit to a temperature check and present a government-controlled QR code on their phone that indicates they are virus-free.”
Bottom line: “Officials and business leaders predict that operations won’t fully return to normal until an effective vaccine hits the market, estimated at least a year away,” Schwartzel, Sider and Haddon add.
Boeing, meanwhile, said its customers canceled 150 orders last month.
“The canceled orders were all for the 737 Max jets, the single aisle passenger plane that has been grounded since March 2019 in the wake of two fatal crashes that killed 346 people. Boeing has been struggling to find a fix for the safety system blamed for the crashes. But despite those troubles, the company suffered only a modest number of canceled orders until the coronavirus started decimating air travel earlier this year,” writes CNN Business’ Chris Isidore.
“According to tracking service Circium, there are now nearly 14,000 jets parked by airlines around the world, representing 63% of the global fleet,” Isidore adds.
“One of the things that we’ve seen from crises in general is that the industry is very resilient, and that we rebound fairly quickly. We also are seeing that there will be some pent-up demand and that people will be ready to travel. There’s some indication that travel will be closer to home initially and that people will do more driving tourism But there’s going to be a segment of the population that is more willing to jump on a plane and go overseas,” Pennington-Gray says.
Ah, yes. Remember those halcyon days when you could simply jump on a plane overseas for a weekend lark among the crowds in Barcelona?