The Coronavirus pandemic has completely altered the reality for the travel industry. Many airlines have already filed for bankruptcy, while others are struggling for survival. As customer demand has tanked, airlines are struggling to keep their workforce on board and motivated. After the initial bailout package, airlines once again find themselves in a quandary. The bailout package restrictions expire on Sept 30th. Given the current market conditions, airlines will be forced to make job cuts in tens of thousands per airline starting October. Yesterday, President Trump chimed and said that the administration will step in to help US airlines.
Trump Admin to help struggling Airlines, but how?
According to Reuters, President Trump made the comment before departing for a visit to Kenosha, Wisconsin.
We’ll be helping the airlines. You have to help the airlines. Airlines are a tough business in good times.
However, neither the President nor the White House provided any follow up or details. The ongoing negotiations between Democrats and Republicans are happening at the backdrop of an airline industry that’s bleeding jobs and money, as both parties brace up for elections in two months. The numbers clearly depict the woes of the airline industry.
U.S. passenger airlines are still collectively losing more than $5 billion a month as 30% of planes remain parked. Passenger travel demand is down about 70% and, on average, planes that are flying are half-full.
United said on Thursday it will need to cut 2,850 pilot jobs between Oct. 1 and Nov. 30 if the government does not extend assistance.
American said last month it would suspend flights to 15 small U.S. cities in October without more federal aid.
The Pundit’s Mantra
Unfortunately, I doubt that we’ll see any movement on this one. On one hand, airlines and unions are lobbying Washington for another $25 Billion in aid package. However, Congress isn’t willing to move the ball forward unless there’s a discussion on a broader Covid-19 financial assistance package.
What do you think about President Trump’s claims? Do you think we could have a meaningful aid package any time soon, given how the negotiations are panning out? Tell us in the comments section.
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