Airlines Are Losing $10 Billion a Month During Pandemic
Demand for air travel has plummeted in the last two months. The numbers are striking. At the lowest point, the number of people going through TSA checkpoints was down more than 96% compared to the same day in 2019. Airlines are burning through cash, and even the government bailout might not be enough to help them for long.
Reuters reports that U.S. airlines are “collectively burning more than $10 billion in cash a month.” The information comes from a prepared testimony by industry trade group Airlines for America that was seen by Reuters ahead of a U.S. Senate hearing on Wednesday.
The group says that even though about 50% of U.S. airlines’ fleet is active, there is an average of “just 17 passengers per domestic flight and 29 passengers per international flight.” May 3 was actually the best travel day in weeks, with 170,254 people going through TSA checkpoints, but that was still just a fraction of the 2,512,598 passengers that flew on the same day last year.
The testimony will also touch upon the issue of fare refunds. The government has instructed airlines to refund cancelled flights, but the carriers are doing everything possible to avoid that. Several lawsuit have already been filed by passengers who were refused cash refunds.
The group’s chief executive, Nicholas Calio will tell the committee that if carriers were to refund all tickets, including those purchased as nonrefundable or those canceled by a passenger instead of the carrier, id would “result in negative cash balances that will lead to bankruptcy.”
Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.