US: The airline business is terrible. It will probably get even worse.
Delta started 2020 celebrating what it said was the most successful year in company history. Not long after, it shared a record $1.6b in profits with its 90,000 employees. But with air travel nearly shut down by the coronavirus, the airline is now bleeding money and will drop 10 more airports from its already skeletal network on Wednesday. Even as Delta and the other major airlines in the US dramatically slash schedules, they are averaging an anemic 23 passengers on each domestic flight and losing $350-$400m a day as expenses like payroll, rent and aircraft maintenance far exceed the money they are bringing in. Passenger traffic is down about 94% and half of the industry’s 6,215 planes are parked at major airports and desert airstrips, according to Airlines for America. Yet, devastating as the downturn has been, the future is even more bleak. With much of the world closed for business, and no widely available vaccine in sight, it may be months, if not years, before airlines operate as many flights as they did before the crisis. Even when people start flying again, the industry could be transformed, much as it was after the Sept. 11 terrorist attacks. And airline executives need only look in the not-distant past to see how lesser crises sank carriers that were household names like Pan Am and Trans World Airlines. The current crisis could push some airlines, especially smaller ones, into bankruptcy or make them takeover targets. Consumer fears about catching the virus on crowded planes could lead to reconfigured seating. Carriers may initially entice wary travelers with discounts, but if they can’t fill up flights, they may resort to raising ticket prices. Story has more details.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2020-05-11/general/us-the-airline-business-is-terrible-it-will-probably-get-even-worse
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US: The airline business is terrible. It will probably get even worse.
Delta started 2020 celebrating what it said was the most successful year in company history. Not long after, it shared a record $1.6b in profits with its 90,000 employees. But with air travel nearly shut down by the coronavirus, the airline is now bleeding money and will drop 10 more airports from its already skeletal network on Wednesday. Even as Delta and the other major airlines in the US dramatically slash schedules, they are averaging an anemic 23 passengers on each domestic flight and losing $350-$400m a day as expenses like payroll, rent and aircraft maintenance far exceed the money they are bringing in. Passenger traffic is down about 94% and half of the industry’s 6,215 planes are parked at major airports and desert airstrips, according to Airlines for America. Yet, devastating as the downturn has been, the future is even more bleak. With much of the world closed for business, and no widely available vaccine in sight, it may be months, if not years, before airlines operate as many flights as they did before the crisis. Even when people start flying again, the industry could be transformed, much as it was after the Sept. 11 terrorist attacks. And airline executives need only look in the not-distant past to see how lesser crises sank carriers that were household names like Pan Am and Trans World Airlines. The current crisis could push some airlines, especially smaller ones, into bankruptcy or make them takeover targets. Consumer fears about catching the virus on crowded planes could lead to reconfigured seating. Carriers may initially entice wary travelers with discounts, but if they can’t fill up flights, they may resort to raising ticket prices. Story has more details.<br/>
