United Airlines is once again calling for government action to support the aviation sector, either through opening borders or additional cash support. Speaking on television, airline CEO Scott Kirby says without a plan to aid the travel sector, even more layoffs will come.
United Airlines wants the U.S. Government to take one of two options to help support the travel and aviation sector: come up with a plan to open borders in the COVID-19 pandemic, or help support airlines to keep employees on the payroll. Airline chief executive Scott Kirby took the call to action when appearing Sunday, Sept. 13, 2020, on CBS’ “Face The Nation.”
“People are not going to get back and travel like they did before until there’s a vaccine”
During his interview with moderator Margaret Brennan, Kirby said that although they have raised $18 billion in free-market capital, their fundraising is unsustainable at a burn rate of $25 million per day. Additionally, the predicted recovery at the start of the novel Coronavirus update is not happening – leading the airline to call for additional help.
“Our view is demand is not coming back,” Kirby said. “People are not going to get back and travel like they did before until there’s a vaccine that’s been widely distributed and available to a large portion of the population.”
The Payroll Support Program from the original CARES Act will expire on Oct. 1, 2020, and Congress has not acted towards a second stimulus bill that could help the aviation industry. Without government help, Kirby predicts “near-depression levels” will continue in the travel industry and associated businesses: hospitality, meetings and conventions and dining.
“Business travel is almost nonexistent as people are doing things like this [teleconferencing and virtual meetings] as they get through the pandemic,” Kirby said. “And even leisure travel is down significantly from where it was before.”
In addition to additional support to prevent the layoff of 16,000 employees, Kirby also noted that United and other airlines have continually asked the White House to work with other international governments to open up borders through on-arrival testing. Much like an additional support bill, there has been no traction that plan.
“People understand the importance to the economy,” said Kirby. “We just seem to be tied up in the larger Washington discussions about the future.”
Capacity Cuts Continue as Oct. 1 Deadline Looms
With layoffs looming, United is changing how they think about scheduling. Anticipating more travelers, the airline says they will fly 40 percent of their schedule compared to Oct. 2019. This also includes renewing eight routes to Hawaii, pending approval of the state’s pre-arrival COVID-19 testing program.
The route capacity is just one of the ways the airline is trying to encourage flyers to come back. The airline also notes they were the first to mandate face mask usage on flights, and were the first to eliminate change fees on certain tickets, which sparked an industry trend.
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