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Aviation Industry Updates: April 22, 2020

Treasury Finalizes Agreements with Major Airlines, Disburses Initial Payroll Support Program Payments

KEY POINTS:

  • “U.S. Department of the Treasury concluded Payroll Support Program agreements with Allegiant Air, American Airlines, Delta Air Lines, Southwest Airlines, Spirit Airlines, and United Airlines.”
  • “Alaska Airlines, Frontier Airlines, Hawaiian Airlines, JetBlue Airways, and SkyWest Airlines have also indicated that they plan to participate in the Payroll Support Program.”
  • “Treasury also made the first Payroll Support Program payments to passenger air carriers today, disbursing a total of $2.9 billion in initial payments to approved applicants.”
  • “All funds provided under the program can be used only for the continuation of payment of employee wages, salaries, and benefits.”

>> Click here to read the entire press release written by US Department of Treasury

Southwest CEO: We Don’t Want to Furlough Employees

KEY POINTS:

  • With the need for passengers and air travel to return, the CEO of Southwest Airlines, Gary Kelly, takes a few moments to tackle a question that has been on many minds; “how quickly will we ramp up service when we are ready to come back, assuming demand returns in a strong way?”
  • Gary starts off by freely admitting that this is a difficult question to answer “I just don’t know the answer to that” Mr. Kelly stated, while emphasizing the need to plan for multiple scenarios and holding on to cash in preparation for a “very prolonged, sluggish travel environment.” Mr. Kelly stresses the need to “learn patience” in what is likely an effort to comfort employees. He goes on to say “we’re not downsizing the airline” while noting the current plan to retire older aircraft will continue.
  • Recalling previous economic downturns, Mr. Kelly states that the company doesn’t “want to furlough employees” nor do they “want to ground airplanes” or close access to the cities they serve. To maintain this goal the traveling public needs to return to the air, mentioning: “I don’t think air travel will snap right back to where it was here, this year. Maybe it will come back next year; if this is a real recession and bad recession it could take four or five years.”
  • Mr. Kelly outlines the fact that the airline is exploring business decisions that will help them navigate a quick recovery, a prolonged recovery, or an extended recession, closing with “we’re just going to do the best we can to perform the best we can in any of those scenarios.”

How the COVID-19 Pandemic Could Change the End-To-End Passenger Experience Forever

KEY POINTS:

  • “In the near term after the virus has been contained, international travel probably won’t be a top priority for the majority of the global population, partly due to fear, but also partly due to the collapse of the economy.”
  • Airports and airlines need to be prepared for governments and agencies turning social distancing on and off with future threats. Immigration and security lines will have to be rethought to be social distance friendly.
  • Automation of passenger interactions will need to be automated as much as possible. “Thermal imaging cameras and temperature sensors to capture body temperature are another feature that could become a part of future solutions.”
  • There is already talk of “immunity passports,” to identify passengers who are safe to travel.
  • E-commerce will shift to provide better access for passengers in purchasing ancillary experiences and products from airlines and airports to reduce the need for face-face interactions.
  • Expect to see more protective screens around the airport, policy adjustments for those who are showing symptoms of illness, etc.
  • Airports Council International “predicts that it may take a year to 18 months to reach anywhere near pre-crisis traffic levels, and the industry may not record pre-COVID-19 traffic volumes again before the end of 2021.”

>> Click here to read the entire document curated by Future Travel Experience

Additional Resources

How Does the Coronavirus Compare to 9/11?

How to Survive Disruptive Change

Are Furloughs Coming?

What Should Pilots Do In These Uncertain Times?