U.S. Airlines ‘Fighting for Survival,’ A4A Chief Says
WASHINGTON—The chief executive of the top U.S. airline lobby called on federal lawmakers to promptly approve more industry aid, telling reporters the situation facing carriers remains “dire” as the summer leisure travel season draws to a close.
“We are doing everything we can to keep our companies afloat,” Airlines for America (A4A) president and CEO Nicholas Calio said Sept. 3.
“People talk about the situation being dire. It is dire,” Calio said. “Right now, we’re fighting for survival. Make no bones about it.”
Calio warned that allowing carriers to proceed with mass furloughs following the expiration of federal payroll support on Oct. 1 would hinder the country’s recovery from the COVID-19 pandemic-induced economic recession.
“We believe that airlines, given how much they do and have done to fuel the economy over the years consistently ... can help empower the recovery, but we need the tools to do it,” Calio said. “Our hope, frankly, is that there will be more aid coming from the government.”
A4A chief economist John Heimlich reported passenger volumes are still down around 70% year-over-year, with domestic traffic down 60% and international down 94%. The end result is that traffic measured by revenue passenger miles flown is currently down 77%, while booked revenues are 86% lower, harmed by the paucity of more profitable business and international travelers.
Making matters worse, Heimlich estimated the nine largest U.S. carriers will increase their total debt burdens by $53 billion by year end, amounting to a 50% increase over 2019. “That debt will stay high for the next several years ... It’ll put a drag on earnings, a drag on growth and will crowd out other investments that carriers would like to make in their product and people,” Heimlich said.
U.S. scheduled passenger flights are estimated to be around 50% lower year-over-year in September, according to data from A4A, with the largest declines expected in the Washington D.C. area (74%), New York (72%) and Hawaii (70%). Rural states, on the other hand, will retain a greater portion of their scheduled service, with the smallest declines experienced by Montana (4%), Utah (22%) and Idaho (24%).
A4A SVP for legislative and regulatory policy Sharon Pinkerton outlined the trade group’s proposal to set up an international pilot program between the U.S. and either Europe, Canada or “somewhere in the Pacific” to evaluate how best to implement a COVID-19 testing program and eliminate quarantine restrictions for international arrivals. “We’re working very closely with our airport partners ... laying out a framework that essentially calls for a test that is reliable, accurate, rapid, affordable and scalable,” Pinkerton said.