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Airlines Feel Pressure To Maintain Minimum Level Of Domestic Service

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Airlines Feel Pressure To Maintain Minimum Level Of Domestic Service

The rapid spread of the coronavirus in the U.S. is raising questions among shippers about whether domestic airlines will virtually stop flying or the U.S. government will shut down the aviation system. 

Either move is extremely unlikely, but air traffic is so depleted already that companies with cargo to move have few options for expedited transport by air. Even though airlines are bleeding cash and looking for every way to eliminate costs, they still have some incentives to keep part of their fleet in the air.

There were only 154,000 domestic travelers at U.S. airports on Monday, a 93% decrease from normal levels, according to the Transportation Security Administration. And the screening levels likely include airline crews. Airlines say flights are only 10% full and many are nearly empty.

Last week, the governor of Hawaii imposed a 14-day quarantine on all travelers to the state, prompting Hawaiian Airlines and others to suspend most flights to Honolulu.

Southwest Airlines Co. (NYSE: LUV) on Tuesday published a new schedule for May through June 5 that reduces flight activity by more than 40% to about 2,000 flights per day. 

American Airlines Group Inc. (NASDAQ: AAL) is reducing domestic capacity up to 70% in May and up to 80% in May. Alaska Air Group, Inc. (NYSE: ALK) announced a 70% reduction in available seats for the next two months and United is taking down 52% of its domestic flights. Delta Air Lines (NYSE: DAL) has aggressively shrunk its flight schedule and Spirit Airlines, Inc. (NYSE: SAVE) is reducing capacity by 45% in April from its previous plan and 75% in May.

Cuts to international operations have been even more drastic.

Airlines are considered essential to the economy, which is one reason they were the only industry to get dedicated aid as part of the $2 trillion emergency relief package enacted last week. In fact, airlines now must give second thought to further capacity reductions to meet terms of the $29 billion in grants for maintaining payrolls. Under the law, airlines that accept aid must preserve air service at their March 1 level.

The White House has been reluctant to implement strict health restrictions that hurt economic activity, and President Donald Trump has remarked that domestic flights carry a tremendous amount of cargo. Maintaining some scheduled flight capacity will be important to move essential medical supplies and vital factory components during the day rather than waiting for overnight courier services, logistics professionals say.

There are other reasons airlines will keep a portion of their fleets in active service. Deborah Birx, the White House Coronavirus Response coordinator, on "Meet the Press" last Sunday said, "We have to be able to move doctors and nurses around the U.S. to surge capacity," especially as retired medical professionals and others come forward as volunteers.

Pilots also must maintain a certain number of flight hours each month to keep their certification, so if airlines shut down it would require more time restarting operations when the pandemic passes and people are freer to start traveling again.

Nonetheless, the Federal Aviation Administration might be forced to close airports if air traffic controllers test positive from COVID-19 and can't work, and control towers have to be disinfected. That's already happened for brief stretches at Midway Airport in Chicago and other locations.

In such circumstances, the government should consider consolidating air traffic centers by bringing flights into one of the airports where several exist in the regions, such as in Washington, where Reagan National, Washington Dulles and Baltimore International Airport lie within a 50-mile radius, said Brandon Fried, executive director of the Airforwarders Association. He also recommended staffing control towers with military air controllers.

(Image: Delta Air Lines)

 

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