Daily Management Review

US Airlines Consider Possibility Of Complete Domestic Flight Halt


03/18/2020




US Airlines Consider Possibility Of Complete Domestic Flight Halt
Airlines in the United States are contemplating something that was believed to be impossible – stopping all commercial domestic flights in the country because of the coronavirus pandemic spread and its impact on air travel demand. 
 
While it is unclear whether the US government will ultimately take such as drastic measure –that would be a first time since the terrorist attacks on the Twin Towers on September 11, 2001, there are rumors of such a blanket ban on air travel being imposed for a couple of weeks or even a month.
 
However recent reports quoting top executives of several US airline companies claimed that preparation for such an eventuality was also being made by the airlines. However there was also caution sounded by them saying that such as blanker ban was not imminent.
 
According to data compiled by Johns Hopkins University, the coronavirus pandemic has so far infected about 170,000 people across the world and killed more than 6,500. On Saturday, US president Donald Trump said that potential travel bans to areas that have been hard hit by the pandemic was being considered by him. So far about 3,000 people have been infected with the virus in the US while 69 of them have dies, according to Hopkins.
 
As various governments across the world including the US have imposed very strict curbs on movement of people in order to limit the spread of the virus pandemic, airlines across the globe are trying had to preserve as much cash as possible because of steep drop in demand.
 
In response to a question about whether the administration is considering imposing a ban on domestic air travel, the US acting Homeland Security Secretary Chad Wolf said on Sunday “all options remain on the table”. An advisory that Americans should avoid unnecessary travel was given a day earlier by President Donald Trump. Last week, the Trump administration also expanded its 30 day travel ban on the European Union to include Ireland and the United Kingdom. 
 
The economies too are set to get impacted by the abrupt cuts across airlines. According to federal data as of the end of January, about 747,000 people were employed in the US airline industry. However aircraft manufacturers as large as Boeing and Airbus as well as their suppliers are now very concerned about their future as airlines ground their aircraft and defer orders.
 
While it is being touted that the US government will give some form of support to the airlines, it is not yet clear the exact nature of the aid. Reports quoting airline executives have warned that the drop in demand is more severe than in the aftermath of the 9/11 terrorist attack on the Twin Towers.
 
“We are working night and day on support and ideas to keep as much pay as we possibly can flowing to you — even if [it] gets worse from here and demand temporarily plummets to zero,” United Airlines CEO Oscar Munoz and President, Scott Kirby wrote to employees on Sunday night. Kirby is scheduled to take the reins in May. 
 
“We took early, aggressive action because we have been determined to do everything possible to avoid painful steps that affect your paycheck,” the United executives wrote. “But, based on the severity of the situation, that no longer appears realistic.”
 
All regular flight operations are to be stopped temporarily by Austrian Airlines starting Wednesday night, March 18, 2020, the airline has announced, in response to entry bans being imposed across the globe and a rapid decline in demand for air travel.
 
Cost cutting was also resorted to by other European airlines as European countries announced extreme measures to curb movement of people with a complete shutdown of public activities. Announcement to cut capacity by at least 75% from 2019 levels in April and May was also announced by British Airways and Iberia parent International Airlines Group.
 
(Source:ww.wcnbc.com)






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