Airline executives are heading to the White House this week to discuss coronavirus. Will bailout be on the agenda?
Last week, President Donald Trump designated Vice President Mike Pence to oversee White House efforts to deal with COVID-19, the strain of coronavirus that has thrown the world into a tizzy.
COVID-19 has proven particularly hard on airlines. Airline stocks have rapidly declined in 2020 and more route suspensions are on the horizon. Rosy forecasts of profits have been discarded and the airline industry in the U.S. (and worldwide) now faces a year of mounting losses.
To discuss strategy and how the U.S. government and airlines can work together, airline executives will meet with Pence on Wednesday. Airline CEOs are already heading to Washington to speak Thursday at the U.S. Chamber of Commerce Aviation Summit, so this meeting will not require a special trip.
No agenda has been released, but you have to wonder whether bailouts will be discussed. It may be premature now, but with demand continuing to retreat and no end in sight to the outbreak, the U.S. may find itself in a position similar to what I covered yesterday in Israel.
There, EL AL is already facing collapse due to COVID-19 and the government has indicated it will step in to protect the airline, seen as a strategic national asset.
It’s far too premature to discuss airline collapse in the USA beyond this: with competition having already dwindled, there will be strong pressure on federal and state governments to lessen the turbulence airlines currently find themselves in.
CONCLUSION
CEOs from American, Delta, and United have already confirmed attendance at the meeting. Nice that Mr. Bastian isn’t on vacation this week…
Will anything come of the meeting? Perhaps not. But it does demonstrate how serious COVID-19 has become for the U.S. aviation industry.
@ Matthew — Bailout of what exactly? The airlines have records profits until now. They can borrow money like other companies. The government should be a last resort?
What a corporate sh!t show this will be.
You said it. The only way a bailout should be arranged is if the big 3 are broken up to help reverse some of the damage that overconsolidation has caused.
From your earlier posts, I think Alitalia and El Al will not be allowed to fail. I wonder if Abu Dhabi will take the same view of Etihad? We should know how Etihad fared over the last year when they release their annual report in three or four months.
Stocks at all time highs and the fed is cutting rates. What a sham. Like republicans the v fed has also dropped any pretenses of following laws.
Trump is incompetent and he makes a lot of noise just to be able to blame someone later for his failures.
In any case this is a capitalistic society. Let them go bankrupt. The bondholders can take over. Why is there a need for bailout?
If there is a bailout it is just a money grab by the rich and i want to see some heads chopped using a guillotine French revolution style, after Bernie becomes president.
You’ve not mentioned that Pence’s approach to everything seems to involve prayer (which has been scientifically shown to not work) to his deity (that there is zero evidence to support the existence of).
First airline to de-brand and bring back the Trump Shuttle name gets a $5B line of credit
On day #1, China’s government REQUIRED their carriers to cancel flights for passengers and give full refunds.
Not a fee waiver, not a rebook within X months using a travel credit, but a good old fashioned refund. To discourage travel and make the general public financially whole again.
Would love to see that in the US. Carriers are upsetting their customers and treating it as some sort of new advertising promo (book THIS week and we’ll give you–not existing customers–flexibility to change flights with no fee).
@Matthew Strange you didn’t mention the “real” reason for this meeting. The TSA is about to announce a load more travel restrictions. Mike Pence is going to give the airlines the bad news!
https://www.dailymail.co.uk/news/article-8070347/TSA-warns-new-travel-restrictions-90-American-travelers-travel-plans.html
No bailout for the airlines this time, as was the the case after 9/11/01. The airline executives are hypocrites; their crews rarely, if ever clean the airline seats, or the blankets (if they still have any). Also, do their flight attendants wash their hands before serving food? The rest rooms are also filthy. Are the oxygen masks ever disinfected?
With airlines showing $5 billion earned annually, while avoiding nearly $400K in taxes on the fees, what are they doing with that money?? Oh, I forgot, those CEOs get millions! Congress. NO BAILOUT FOR AIRLINES, please.