Things were looking up last month for the U.S. aviation industry. The pandemic curve was flattening and consumer demand was coming back stronger and quicker than anticipated. Then came the resurgence which continues even today. Listening to the warnings from the CEOs of JetBlue and Southwest, you’d really think the sky is falling…and maybe it actually is. But there’s also an election coming up…
JetBlue CEO Warns Of “Day Of Reckoning”
Speaking on CNBC, Hayes warned of a “day of reckoning” coming in October if another round of airline bailouts is not signed into law:
“As we get to the end of the first CARES Act period, through to September, we’re still going to be at a fraction of our normal levels. And so airlines are going to have to reset.”
Hayes, like United Airlines’ CEO Scott Kirby, is beating the war drums as pressure mounts for a second round of payroll support for beleaguered U.S. airlines.
“It has the potential to cause a significant amount of job losses in the industry and an extension of the CARES Act for the industry would prevent that.”
While Hayes sees light at the end of the tunnel, he fears the bridge necessary to reach that point:
“We all agree that we’ll see a recovery at some point. I think people instinctively want to travel. There’s a lot of pent-up demand for travel, lots of friends and families they put off seeing. The question is how do we bridge to that point.”
For Hayes, that bridge is taxpayer-funded payroll support.
Southwest CEO Says His Airlines Is In “Intensive Care”
To Texas, where CEO Gary Kelly asserts that his Southwest Airlines is in “intensive care.” While Southwest has thus-far promised there will be no furloughs regardless of whether a new federal assistance bill is passed, he issued a dire warning in a note to employees:
“Our Company is in intensive care. We’re losing roughly $20 million a day, and this massive and unprecedented amount of fresh cash is crucial to fund these losses. Without it, we run out of cash, and literally, shut down.”
One quarter of losses in 2020 wipes out a year of profits. Kelly, like all of us, is stymied by the uncertainty surrounding the pandemic:
“I know you all know, we are in the fight of our lives. It is now abundantly clear this will not be over this fall.”
And that’s the concerning thing…
Are Warnings From JetBlue And Southwest Just Electioneering?
Let’s also not forget both JetBlue and Southwest have lined up substantial funding already to weather this storm. But let’s also not forget we have a presidential election coming up in November.
No good opportunity must ever go to waste. Read my lips:
no new taxes JetBlue and Southwest will find a way to survive, but why should they do it from their own pockets if they can get American taxpayers to pay for it instead? I’m being facetious, but one can hardly blame them for taking advantage of a crisis in the 100 days before an election. My prediction: a three-month extension through Christmas.
Get used to the tough words from JetBlue and Southwest. We’re going to be hearing a lot more from airline executives in the weeks ahead as desperation grows over a new round of federal funding.
image: Tomás Del Coro / Wikimedia Commons