Exclusive: U.S. airlines burn $10 billion a month as traffic plummets

(Reuters) – U.S. airlines are collectively burning greater than $10 billion in money per month and averaging fewer than two dozen passengers per home flight within the wake of the coronavirus pandemic, trade commerce group Airlines for America mentioned in ready testimony seen by Reuters forward of a U.S. Senate listening to on Wednesday.

FILE PHOTO: Flight attendants speak in a practically empty cabin on a Delta Airlines flight operated by SkyWest Airlines as journey has cutback, amid issues of the coronavirus illness (COVID-19), throughout a flight departing from Salt Lake City, Utah, U.S. April 11, 2020. REUTERS/Jim Urquhart

Even after grounding greater than three,000 plane, or practically 50% of the lively U.S. fleet, the group mentioned its member carriers, which embody the 4 largest U.S. airlines, are averaging simply 17 passengers per home flight and 29 passengers per worldwide flight.

“The U.S. airline industry will emerge from this crisis a mere shadow of what it was just three short months ago,” the group’s chief govt, Nicholas Calio, will say, in line with his ready testimony.

Net booked passengers have fallen by practically 100% year-on-year, the testimony earlier than the Senate Commerce Committee mentioned. The group warned that if air carriers have been to refund all tickets, together with these bought as nonrefundable or these canceled by a passenger as an alternative of the service, “this will result in negative cash balances that will lead to bankruptcy.”

U.S. airlines have canceled tons of of hundreds of flights, together with 80% or extra of scheduled flights into June as U.S. passenger traffic has fallen by 95% since March. They are conducting extra cleansing measures and requiring all passengers to put on facial coverings.

Calio mentioned airlines “anticipate a long and difficult road ahead … History has shown that air transport demand has never experienced a V-shaped recovery from a downturn.”

The U.S. Treasury has awarded practically $25 billion in money grants to airlines to assist them meet payroll prices in change for them agreeing to not lay off staff by way of Sept. 30. Major airlines have warned they’ll doubtless must make extra cuts later this 12 months to answer a long-term decline in journey demand.

United Airlines Co (UAL.O) mentioned Monday it plans to chop not less than three,450 administration and administrative staff on Oct. 1, or 30% of these staff.

Also testifiying on the listening to on the state of the aviation sector is Eric Fanning, who heads the Aerospace Industries Association. Boeing Co (BA.N) mentioned final week it should lower 16,000 jobs by the tip of the 12 months, whereas GE Aviation (GE.N) plans to chop as much as 13,000 jobs and airplane provider Spirit AeroSystems (SPR.N) is chopping 1,450 jobs.

Todd Hauptli, who heads the American Association of Airport Executives, may also testify.

Reporting by David Shepardson in Washington and Tracy Rucinski in Chicago; Editing by Matthew Lewis

Our Standards:The Thomson Reuters Trust Principles.

Source link reuters.com

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