U.S. Airlines Are Losing $10B Monthly During COVID-19 Outbreak
With lock-down orders and travel restrictions due to the coronavirus pandemic, demand for air travel is nearly non-existent. On the worst day this year, April 14th, only 87,534 people passed through TSA checkpoints. That was the slowest day for air travel in decades and an incredible drop of 96.2% from a year before.
Saturday, May 1st, was the busiest day since late March. 171,563 travelers and crew passed through TSA checkpoints. While that is almost a 100% increase from April 14th, it is still just a tiny fraction of the more than 2.5 million a year ago on the same weekday.
So it is understandable that airlines are hurting and losing money. But Reuters reports that a testimony before the Senate today will reveal that U.S. airlines are burning through $10 billion every month during the coronavirus pandemic.
“Even after grounding more than 3,000 aircraft, or nearly 50% of the active U.S. fleet, the group said its member carriers, which include the four largest U.S. airlines, were averaging just 17 passengers per domestic flight and 29 passengers per international flight.”
The testimony will also mention the issue of fare refunds, which has been a hot topic recently. The Department of Transportation has clarified that airlines must give customers refunds when flights are canceled or significantly delayed during the coronavirus pandemic. Several lawsuit have already been filed by passengers who were not given the option of 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.”