Airlines get relief funds, but travel rebound may take a while
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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
What are the details of President Joe Biden’s coronavirus relief plan?
The $1.9 trillion plan would aim to speed up the vaccine rollout and provide financial help to individuals, states and local governments and businesses. Called the “American Rescue Plan,” the legislative proposal would meet Biden’s goal of administering 100 million vaccines by the 100th day of his administration, while advancing his objective of reopening most schools by the spring. It would also include $1,400 checks for most Americans. Get the rest of the specifics here.
What kind of help can small businesses get right now?
A new round of Paycheck Protection Program loans recently became available for pandemic-ravaged businesses. These loans don’t have to be paid back if rules are met. Right now, loans are open for first-time applicants. And the application has to go through community banking organizations — no big banks, for now, at least. This rollout is designed to help business owners who couldn’t get a PPP loan before.
What does the hiring situation in the U.S. look like as we enter the new year?
New data on job openings and postings provide a glimpse of what to expect in the job market in the coming weeks and months. This time of year typically sees a spike in hiring and job-search activity, says Jill Chapman with Insperity, a recruiting services firm. But that kind of optimistic planning for the future isn’t really the vibe these days. Job postings have been lagging on the job search site Indeed. Listings were down about 11% in December compared to a year earlier.
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