Coronavirus crisis forcing airlines to burn over $10 billion each month
The coronavirus crisis is reportedly forcing US airlines to burn through more than $10 billion in cash each month as demand for travel evaporates.
Industry group Airlines for America plans to detail the pandemic’s staggering cost at a Wednesday US Senate hearing on the state of the beleaguered aviation sector, Reuters reported.
“The US airline industry will emerge from this crisis a mere shadow of what it was just three short months ago,” Airlines for America CEO Nicholas Calio plans to tell lawmakers in prepared testimony that Reuters obtained.
Airplane passenger traffic has plunged more than 95 percent year-over-year amid widespread lockdowns and travel restrictions aimed at containing the spread of the coronavirus, according to Airlines for America data.
Demand is falling faster than airlines can cut capacity, which has only dropped about 83 percent, the group says.
The group’s member airlines are carrying an average of just 17 passengers on domestic flights even though they have idled more than 3,000 planes, or nearly half the nation’s active fleet, according to Reuters.
Calio also said carriers would fall into bankruptcy if they refunded all tickets amid a plunge in bookings, the news agency reported.
The Senate Commerce Committee hearing will come about a month after the feds granted airlines a $25 billion bailout in a massive stimulus bill meant to shore up the US economy during the pandemic.
The package was meant to help airlines keep workers employed through September, but United Airlines is planning to cut thousands of jobs in October once the aid is up. United has also joined rival airlines Delta and American in offering employees unpaid leave.