Covid-19 has brought terrible misfortunes to people all around the globe. From losing family members to suffering through the terrible illness, to losing jobs and income, people's lives have been changed in such a short space of time that a lot of people couldn't have imagined.
In a bid to slow the spread of the virus, measures have been put in place by various countries to varying degrees of success.
In the USA, this is no different. Many economists and well-renowned thinkers say a recession is imminent. Job losses in the thousands and even millions are pushing people into debt. A lot of people might lose their homes causing a chain of effects not seen I'm decades-at least in these numbers.
The airline industry has been hit very hard as people are trying to follow guidelines and general fear of contracting this dangerous virus. Air travel isn't as it used to be and it might never be the same again.
According to the New York Times, "American Airlines warned employees on Tuesday that it would cut up to 19,000 workers on Oct. 1, saying that there was little sign that the pandemic-induced reluctance to travel was diminishing."
It also goes further to say "the company expects to have about 40,000 fewer employees on Oct. 1 than it did before the pandemic, a 30 percent decline in its workforce."
These announcements have been made to put pressure on the government to give stimulus packages to the airline industry so these companies can pay their staff and not have to resort to laying off these huge numbers of workers.
For many other businesses, like hospitality and live entertainment, time is running out for them. Other sectors remain either shut down or severely restricted.
Cases of the virus remain high throughout the country even though the numbers are dropping slowly.
Niraj Chokshi and Ben Casselman from NYT write "Things could get worse in the coming months. Restaurants and other businesses that have been able to shift some operations outdoors will struggle when the weather turns colder. And health experts warn that infections are likely to rise again in the fall and winter. That means businesses have to prepare for the crisis to last well into 2021 — which in many cases will mean further layoffs and cost-cutting."
American Airlines expects to fly less than half flights in the remaining months of the year as compared to last year.
United Airlines aims to fly 50% until a vaccine comes around.
Domestic travel has fallen 44% whereas international flights have fallen 75% in the USA alone.
Airlines have gone to great lengths to try to comfort a hesitant public, including by imposing mask requirements, cleaning planes frequently, and limiting seating capacity. But those changes have not brought passengers back in force as expected by airlines.
It is only a matter of time before we see if this situation gets better or suffers even more.
https://www.nytimes.com/2020/08/25/business/american-airline-furlough-19000.html
3 comments:
These numbers are very huge indeed and I definitely think that even though the economy is somewhat recovering, elevated layoffs are still a risk. This is just the airline sector, and we know that other sectors of the economy such as public transit, store sales, financial markets, and so many more have been heavily affected as well. Now, maybe a government stimulus check might provide some relief to these airline companies but I think that more so it will just limit the damages/losses, not completely halt them. Sad to say but a recession might be on its way(or is already happening?).
I think that it will be very interesting to see how the government handles this, or if they even do anything. Airlines were always a very marginally profitable business and now they are losing money faster than ever. In a country like the U.S., having air travel seems essential so I could see the government bailing out certain airlines in order to keep air travel alive. I could also see if the airline industry continues to struggle, the government bailing out airlines and making it a private industry. But we will have to see.
As of today, CNN posted an article titled "Airline Group Proposes Coronavirus Testing for Passengers at Airports." In this article, it is outlined how the CEO of International Air Transport Association (IATA) hopes that testing at airports could mitigate some of the burden airlines have faced. This would be just one part of the groups idea to help reopen international travel and to bring confidence back to travelers. The IATA believes that testing has become reliable and quick enough for it to be widely used at airport terminals. If this truly came to fruition, maybe airline travel will be more widely used sooner rather than later, easing the burden on the industry and preventing future government bailouts.
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