COVID-19

Airlines get relief funds, but travel rebound may take a while

Meghan McCarty Carino Dec 29, 2020
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A pilot walks through New York's LaGuardia Airport on Dec. 3. Spencer Platt/Getty Images
COVID-19

Airlines get relief funds, but travel rebound may take a while

Meghan McCarty Carino Dec 29, 2020
Heard on:
A pilot walks through New York's LaGuardia Airport on Dec. 3. Spencer Platt/Getty Images
HTML EMBED:
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Thousands of airline workers will keep their jobs thanks to funding in the new COVID-19 relief package.

Southwest Airlines canceled plans for furloughs and pay cuts while United and American said they would bring back thousands of furloughed employees.

The relief measure provides $15 billion to pay workers’ salaries through the end of the March. But it may take much longer for the industry to rebound.

With people now beginning to get vaccinated for COVID-19, many Americans may start to think about travel, said analyst Henry Harteveldt.

“Our research shows that 80% of business travelers and 84% of leisure travelers in the U.S. say they can’t wait to start traveling again,” he said.

But it won’t be instantaneous. Widespread vaccination could take until midyear or beyond, and a weakened economy could blunt demand.

“It’s going to take a little bit of time for the travel industry to wake up,” Harteveldt said.

He predicts air travel will remain slow until April, then rebound to about 60% of pre-pandemic levels next year. And while tourists may be eager to take all those missed vacations, some business travel may never return, said airline consultant Jay Sorensen.

“For some airlines, it’s a big piece of the revenue pie,” he said.

Sorensen said business travel is often booked at higher rates so it generates more profits for airlines.

COVID-19 Economy FAQs

Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?

This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.

Could waiving patents increase the global supply of COVID-19 vaccines?

India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.

Can businesses deny you entry if you don’t have a vaccine passport?

As more Americans get vaccinated against COVID-19 and the economy begins reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.

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