US airlines face grim winter, with or without a bailout
US airlines face a winter test of their finances and question marks over the reach of their domestic flight networks after failing, for now, to win fresh federal aid. American Airlines and United began laying off 32,000 workers after a deadline passed with no new help from Washington, but told staff they would reverse this if lawmakers reach a deal on COVID-19 relief. US House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin were expected to continue negotiations on Thursday. US airlines are collectively burning about US$5b of cash a month as passenger traffic has stalled at around 30% of 2019 levels. After tapping capital markets, they say they have enough liquidity to last them at least 12 months at that rate. They have argued for another US$25b in federal payroll aid to maintain their workforce and meet demand as the economy rebounds. Without the money, flight networks could further shrink, hampering their revenue power and shortening their liquidity runway. Between voluntary and involuntary furloughs, major US airlines' workforce will shrink by at least 25% in October. "Airlines quite correctly have been bulking up on cash ... but to be 25% smaller, best case, how are you going to handle the debt service?" asked airline consultant Mike Boyd. Cities will lose a number of daily flights and non-stop options, Cowen analyst Helane Becker said. "Service to small communities will decline pretty dramatically," she added.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2020-10-02/general/us-airlines-face-grim-winter-with-or-without-a-bailout
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US airlines face grim winter, with or without a bailout
US airlines face a winter test of their finances and question marks over the reach of their domestic flight networks after failing, for now, to win fresh federal aid. American Airlines and United began laying off 32,000 workers after a deadline passed with no new help from Washington, but told staff they would reverse this if lawmakers reach a deal on COVID-19 relief. US House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin were expected to continue negotiations on Thursday. US airlines are collectively burning about US$5b of cash a month as passenger traffic has stalled at around 30% of 2019 levels. After tapping capital markets, they say they have enough liquidity to last them at least 12 months at that rate. They have argued for another US$25b in federal payroll aid to maintain their workforce and meet demand as the economy rebounds. Without the money, flight networks could further shrink, hampering their revenue power and shortening their liquidity runway. Between voluntary and involuntary furloughs, major US airlines' workforce will shrink by at least 25% in October. "Airlines quite correctly have been bulking up on cash ... but to be 25% smaller, best case, how are you going to handle the debt service?" asked airline consultant Mike Boyd. Cities will lose a number of daily flights and non-stop options, Cowen analyst Helane Becker said. "Service to small communities will decline pretty dramatically," she added.<br/>
