COVID-19

This week may be “Armageddon” for the airline industry

Erika Beras Sep 28, 2020
Heard on: Marketplace
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Flight attendants and other aviation workers participate in a march near the U.S. Capitol on Sept. 9, calling for extended airline support. Alex Wong/Getty Images
COVID-19

This week may be “Armageddon” for the airline industry

Erika Beras Sep 28, 2020
Flight attendants and other aviation workers participate in a march near the U.S. Capitol on Sept. 9, calling for extended airline support. Alex Wong/Getty Images
HTML EMBED:
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It’s shaping up to be a bad week for employees of commercial airlines. In exchange for a federal bailout earlier in the pandemic, carriers had agreed not to cut the ranks of pilots, flight attendants, ground crews and management until Oct. 1. Airlines are expected to begin announcing more than 35,000 job cuts Thursday.

When I asked Janet Bednarek, a professor at the University of Dayton who studies urban and aviation history, what the past few months have been like for the airlines, she didn’t even pause: “Armageddon.”

“This is the worst crisis in the history of American aviation,” she said.

A crisis for the airlines, for the airports, for the soon-to-be-unemployed. And for the hub cities — Charlotte, Chicago, Dallas-Fort Worth.

“For every direct airline employment loss, there’s about seven or eight, support and derived job losses elsewhere in the community,” said Robert Mann, an aviation analyst. 

These losses will ripple across the U.S., even to cities that aren’t hubs, said Kevin Healy, the president and CEO of consulting firm Campbell-Hill Aviation Group.

“A significant percentage of those employees don’t necessarily live where they’re based,” Healy said.

The hubs will still have planes flying in and out, moving cargo such as medical supplies. And because they had such good airline service before, those cities have other industries to cushion the loss. More affected by these job cuts, said Brett Snyder of the blog Cranky Flier, will be smaller places like Williamsport, Pennsylvania, which will lose a regular American Airlines flight, for example.

“It hurts some of the local businesses,” Snyder said. “It’s something that if it holds up in the long run that they don’t have service, then it could be a risk to the economies.”

And those cities will have a harder time rebounding when air travel returns to its pre-pandemic levels. 

COVID-19 Economy FAQs

How many people are flying? Has traveled picked up?

Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.

How are Americans feeling about their finances?

Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.

Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.

What’s going to happen to retailers, especially with the holiday shopping season approaching?

A report out recently from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.

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