Airlines flew empty flights to get coronavirus aid; now they’re asking Congress for help
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
As the aviation industry hemorrhages money amid historically low travel demand, the $50 billion pot of government aid has been a crucial lifeline for U.S. carriers.
But, in order to receive their taxpayer-funded boost, airlines must adhere to certain requirements, including continuing to fly to most cities they served before the coronavirus pandemic hit.
With most citizens still under some kind of stay-at-home order, however, airlines are largely having trouble filling the flights they’re required to continue running.
Carriers have found some ways to squeeze efficiency out of their pared-down networks by operating tag and triangle routes that serve multiple cities with the same plane and crew. Airlines have also applied for exemptions from serving some of the lowest-demand airports on their maps, though the Department of Transportation has been somewhat unpredictable in granting those requests.
Now, the airlines say, they hope to see some of the flight frequency regulations relaxed as they continue to try to conserve cash.
Nicholas Calio, the CEO of the Airlines for America (A4A) trade group that represents big U.S. airlines, pressed the case Wednesday in testimony before the Senate’s Commerce, Science and Transportation Committee, saying that his organization wants to work with the DOT to find a more “reasonable and practicable” level of air service than what’s currently required by the law.
“We hope for a rationalization,” he said. “It does not make sense when you have multiple carriers flying multiple flights into places where there is no demand.”
Calio’s claim is backed up by data from his organization.
Ahead of his testimony, A4A told Reuters that U.S. airlines are collectively losing $10 billion a month, and only averaging 17 passengers on each domestic flight.
Delta, for example, recently noted in a waiver request that it had only two passengers aboard a 162-seat Airbus A320 for a recent flight from Minneapolis/St. Paul to Boston.
The situation is bad for airline employees, passengers, and the environment, Calio said in his testimony.
“It harms the consumer because the recovery will be longer, the chance of keeping the most employees on board will be undermined, and if you want to look at it from an environmental point of view, we should not be flying airplanes that are empty.”
To address the issue of redundant flights, government representatives and industry stakeholders alike seem to be warming to the idea of temporarily granting U.S. airlines antitrust immunity, which would allow them to coordinate directly with the DOT and each other to sustain services while also temporarily cutting flights for which there is little or no demand.
Sen. Mike Lee (R-Utah) said airlines could take a page out of the operating manuals of U.S. railroads, for the time being, and coordinate their services more closely as they work to overcome the coronavirus slump.
“There ought not to be artificial constraints by which we require an airline to continue operating air service for which there is no demand,” he said. “There needs to be some flexibility on the part of the airlines because if there is not, we will burn through that money much more quickly and make air travel that much less affordable.”
In a previous interview with TPG, Sara Nelson, the president of the Association of Flight Attendants was more blunt in her assessment.
“We need antitrust immunity for a short period of time so DOT can bring the airlines together and have a rational review of the schedule, to maintain essential service,” she said.
Sen. Roger Wicker (R-Mississippi), the Senate committee’s chairman said during Wednesday’s hearing that the group would “think through” the issue.
Of course, it’s also not as simple as just lifting antitrust immunity or relaxing the provisions of the CARES Act. Fewer flights on any route means it could be harder for passengers on the planes that are flying to practice social distancing, since the same number of passengers would presumably be spread over a reduced offering of flights. That, in theory, could jeopardize the health of passengers and crews alike.
Similarly, any move to change antitrust rules would need to be carefully monitored to ensure airlines were not overstepping the provisions of that immunity, which would likely be limited to coordinating service on low-demand routes only while coronavirus is a major factor affecting travel.
For the time being, though, enforcement of the CARES Act will likely continue with no immediate changes. That means many planes will continue flying empty —or close to it — and airlines will continue to lose significant amounts of cash every day. In just the last few weeks, all the major U.S. airlines have combined to report losses of billions of dollars.
Calio said on Wednesday that continuing to operate this way is a money-losing and job-losing proposition, and one that the airlines will need to address if they hope to recover after the pandemic.
Featured photo courtesy of American Airlines.
Welcome to The Points Guy!
Earn 90,000 bonus miles after you spend $3,000 in purchases on your new Card in your first 3 months. Offer ends 8/3/2022.
With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.
- Limited Time Offer: Earn 90,000 bonus miles after you spend $3,000 in purchases on your new Card in your first 3 months. Offer ends 8/3/2022.
- Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs up to two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
- Earn 3X Miles on Delta purchases and purchases made directly with hotels.
- Earn 2X Miles at restaurants worldwide including takeout and delivery in the U.S., and at U.S. supermarkets.
- Earn 1X Miles on all other eligible purchases.
- Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. Payment of the government imposed taxes and fees of no more than $80 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
- Enjoy your first checked bag free on Delta flights.
- Fee Credit for Global Entry or TSA PreCheck® after you apply through any Authorized Enrollment Provider. If approved for Global Entry, at no additional charge, you will receive access to TSA PreCheck.
- Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
- No Foreign Transaction Fees.
- $250 Annual Fee.
- Terms Apply.
- See Rates & Fees