Airline industry top winners and losers for 2020
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While 2020 has been a disastrous time for commercial aviation, disaster has not been equally distributed.
Now that the end of the year has arrived, it’s a good time to take stock of who in the industry bucked 2020’s bleak trendline — and who did not.
Top performers include airline labor unions, for their role in twice securing federal support for industry employees, and Delta Air Lines — which by blocking middle seats through March 30, 2021 — has enhanced its image as a premium airline.
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The top three losers are Boeing, media pundits who in March erroneously forecast an imminent American Airlines bankruptcy, and the federal agencies that have consistently refused to require masks for airline passengers.
Among this group, Boeing stands out as the year’s biggest loser in aviation, a victim not only of the coronavirus crisis but also of management failures in the rushed development of the 737 MAX.
Those failures, and their impact, became increasingly apparent in 2020. Amid the rush to develop the MAX, Boeing sought to ensure that pilots would not require more simulator time, a cost item for its airline customers, by not disclosing the addition of the MCAS automatic flight control system. This strategy damaged a reputation for safety nurtured since Boeing’s founding in Seattle in 1916.
After two fatal crashes — one in October 2018 and another in March 2019 — that collectively killed 346 people, the MAX was grounded worldwide in March 2019. It began to fly commercially again this month.
Certainly, Boeing has borne a cost for its errors. It may have permanently lost leadership in aircraft manufacturing to its only competitor. Today, in the 200-seat, single-aisle marketplace, the biggest segment of the commercial aircraft business, Airbus has a backlog of about 3,000 orders, while Boeing’s backlog is just 500 aircraft.
Possibly the most disturbing aspect of the Boeing story came to light during a November 2018 meeting between officials from the company and the Allied Pilots Association, which represents American pilots. There, “Boeing officials told us that we were the backup” if the MCAS misfunctioned, said APA spokesman Dennis Tajer. “We lunged back, ‘How can we be the backup if we don’t even know the system exists?’ ”
The MAX is back in the U.S.: A tale of two flights: Anxiety, excitement mix onboard return of the 737 MAX
As runner-up for the worst performance of the year in aviation, how about the multiple media outlets that reported in May that American Airlines was close to filing for bankruptcy?
American expects to end the current quarter with liquidity of about $14 billion. And with a vaccine on the way, American’s cash burn – most recently around $30 million daily – seems headed for improvement.
As for third-worst performance, let’s note that the U.S. Department of Transportation has refused to mandate masks for passengers, leaving this task for airlines to enforce via patchwork of individual policies. The refusal appears to result from the Trump administration’s enduring reluctance to back the use of masks to prevent transmission of COVID-19.
On Oct. 9, the DOT rejected a petition from the Transportation Trades Department of the AFL-CIO to require masks for passengers on commercial passenger transportation. Earlier, the Centers for Disease Control had recommended a similar proposal, sources told The New York Times.
The federal agencies “won’t step up,” John Samuelsen, president of the Transportation Workers Union, said in October. “They won’t create an across-the-board mandate on anything related to COVID-19 related safety measures or worker protection.”
President-elect Joe Biden has said that his administration will require masks for interstate transportation, including flights.
As for the best performance award of 2020, that should go to the airline industry’s labor unions. In March, thanks largely to the unions’ efforts, the CARES Act provided $31 billion in direct grants to pay as many as 750,000 airline workers — many, but not all, union members — through Sept. 30.
In December, labor succeeded in assuring that the payroll support program would continue. The $900 billion stimulus bill, approved by Congress, included $15 billion for airline employees and another $1 billion for employees of airline contractors. Unions had started lobbying for the second bill in May.
As part of the effort, Sara Nelson, president of the Association of Flight Attendants, made frequent appearances on television, giving labor the identifiable spokesperson, it needs. So Nelson gets an honorable mention here.
As for airlines, while none did well, Delta may have succeeded in achieving its long-term goal to distinguish itself as a premium airline. In November, Delta said it will continue blocking middle seats for flights departing through March 30, 2021. No other U.S. airline has extended the policy for so long.
It is reasonable to think that passengers will remember this policy long past the horrible year of 2020.
Featured photo by SAUL LOEB/AFP via Getty Images.
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