US: Airlines got $25b in stimulus; industry still expected to shrink
Federal stimulus money for airlines is keeping them afloat through the coronavirus pandemic, but it’s not proving to be enough to sustain the industry at its pre-pandemic size. Carriers say they will have to shrink, with fewer planes flying, fewer flights and fewer employees come Oct. 1, after restrictions related to their stimulus money expire. Airlines will likely need to park 20% of their planes and cut their pilot workforces in equal measure, Cowen analyst Helane Becker estimated in a recent research note. The coming job losses are a sign of how the government’s broad efforts earlier this year to support industries and preserve jobs as the economy shut down have been overwhelmed in some instances by the financial devastation the Covid-19 pandemic has generated. The $25b that airlines received as part of the broader economic stimulus package in March was intended as a bridge to carry airlines through as demand collapsed and keep employees on the payroll through the end of September. The money has also given carriers some time to stabilize, keep workforces trained and ready, and raise billions of dollars from capital markets. If not for the government aid, “I’m not sure we’d be flying at all,” one airline executive said. The problem now: demand hasn’t snapped back. Even as travel has picked up a bit lately, it remains a fraction of the record-high levels reached before the pandemic, and now airline executives believe the rebound will take years, not months. Airline officials and lobbyists say there haven’t been formal discussions about additional aid, though some unions are hoping that the funds to cover worker salaries could be extended. <br/>
https://portal.staralliance.com/cms/news/hot-topics/2020-06-08/general/us-airlines-got-25b-in-stimulus-industry-still-expected-to-shrink
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US: Airlines got $25b in stimulus; industry still expected to shrink
Federal stimulus money for airlines is keeping them afloat through the coronavirus pandemic, but it’s not proving to be enough to sustain the industry at its pre-pandemic size. Carriers say they will have to shrink, with fewer planes flying, fewer flights and fewer employees come Oct. 1, after restrictions related to their stimulus money expire. Airlines will likely need to park 20% of their planes and cut their pilot workforces in equal measure, Cowen analyst Helane Becker estimated in a recent research note. The coming job losses are a sign of how the government’s broad efforts earlier this year to support industries and preserve jobs as the economy shut down have been overwhelmed in some instances by the financial devastation the Covid-19 pandemic has generated. The $25b that airlines received as part of the broader economic stimulus package in March was intended as a bridge to carry airlines through as demand collapsed and keep employees on the payroll through the end of September. The money has also given carriers some time to stabilize, keep workforces trained and ready, and raise billions of dollars from capital markets. If not for the government aid, “I’m not sure we’d be flying at all,” one airline executive said. The problem now: demand hasn’t snapped back. Even as travel has picked up a bit lately, it remains a fraction of the record-high levels reached before the pandemic, and now airline executives believe the rebound will take years, not months. Airline officials and lobbyists say there haven’t been formal discussions about additional aid, though some unions are hoping that the funds to cover worker salaries could be extended. <br/>
