US airlines 'fighting for survival' with no hope of V-shaped recovery, trade group says
There is near unanimous agreement that the coronavirus pandemic has pushed the airline industry into one of the toughest crises in a century of flying.
While World War II temporarily halted most passenger air service around the world, the more recent tests of 9/11 and the Great Recession were never as bad as the situation is today — eight months into the coronavirus pandemic. The number of people boarding flights operated by U.S. airlines — while up from the bottom in April — remains down 70% year-over-year, and carriers continue to lose millions of dollars daily even after taking a scalpel to costs.
“Right now, we’re fighting for survival. No bones about it," trade group Airlines for America (A4A) president and CEO Nicholas Calio said during a media briefing on Thursday.
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While no major U.S. airline appears on the edge of a bankruptcy filing, every carrier has racked up significant debt while trying to bolster their balance sheets to get through the crisis. But how long it takes to beat COVID-19 will make a big difference in how the industry shakes out.
In an Aug. 30 report, analysts at Raymond James estimated that major U.S. airlines have enough cash to weather the crisis through the middle of 2022 barring no further travel recovery. However, the amount varies for individual airlines. American Airlines is sitting on only enough cash to get it to next May while Southwest Airlines could fly through August 2022.
Several regional carriers, including ExpressJet Airlines, RavnAir in Alaska, and Trans States Airlines, have already been forced to close — or soon will — their doors because of the pandemic.
Related: Global air travel unlikely to recover until 2024 as COVID remains ‘issue’ in US, elsewhere
"People talk about a V-shaped recovery — the airline industry has never seen a V-shaped recovery," Calio said. "We believe, if things go well, it will be 2024 before demand is where it was.”
A4A's forecast matches that of the International Air Transport Association (IATA), which also anticipates four-year return to pre-pandemic global flying levels.
A4A continues to push for Congress to pass additional payroll support for airlines. If included in a new federal coronavirus aid package, the funds would allow airlines to keep staff on their payrolls through March — forestalling tens-of-thousands of furloughs when the current CARES Act protections expire on Sept. 30.
Related: Should Congress dole out more money for airline employees?
The lobbying effort is led by 13 labor unions, including the Airline Pilots Association (ALPA) and Association of Flight Attendants-CWA (AFA), and backed by every major airline.
Calio describes the additional payroll funds as "aid" and not a "bailout" as they would only cover staff expenses and airlines would have to pay back at least a third of the money.
Related: Flight attendants will make up majority of United’s 16,000 employee furloughs
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- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
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| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
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You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.As High As 100,000 points. Find Out Your Offer.Annual Fee
$325Recommended Credit
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Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.