What does the airline aid package mean for travelers? Not much
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.
“This isn’t really about consumers, as funny as that sounds.”
With an aid package worth $50 billion for airlines likely to be signed into law by the end of the week, TPG wanted to figure out what changes — or possibly luxuries — travelers might expect as a result of the cash infusion.
It turns out, any changes in the near term are likely to be minimal, and will probably go largely unnoticed by travelers.
“I’d expect more flights to operate than demand would normally indicate,” Snyder said in an email. “To me that’s the biggest potential consumer impact.”
Henry Harteveldt, a travel industry analyst and president of Atmosphere Research, agreed.
“What this means is there will be an airline industry when we come out of it. It doesn’t guarantee the survival of any particular airline. It doesn’t change the travel experience,” he said.
Harteveldt also pointed out that airlines have already significantly reduced their networks and fleets, and even when the pandemic passes, the aviation landscape won’t return to its pre-coronavirus peak.
“The airlines are putting themselves into a state of semi-hibernation,” he said. “When we start to get positive news about removing shelter-in-place orders, when businesses start to remove their restrictions on travel, the airlines have to start putting Humpty Dumpty back together again.”
But what the new normal looks like will largely be a factor of what level of demand exists after the pandemic.
“What will business travel look like? How soon will people start to travel again? How soon will companies start to remove restrictions on travel?” Harteveldt said. “The key to all of this will be the state of the economy and the speed of the recovery, not only of the economy, but of demand,” and that’s not something the current aid bill accounts for.
And, while the legislation is strong on worker protections — mandating that airlines maintain their employee rosters for a fixed period after receiving aid, for example — the bill contains no directives about things that passengers tend to focus on, like inflight service, seat pitch or ancillary fees.
“Airlines are not going to be obliged to change the fees they charge,” Harteveldt said. “It doesn’t force the airline to change the way they do business, and the airline industry fought back against government wishes to do that.”
But that doesn’t mean passengers won’t see some indirect benefits of the aid to airlines in the future. Of course, keeping airlines afloat to continue their operations after the crisis is a good thing for travelers, but Harteveldt also said there will likely be some great travel deals in the future, too.
“I do think there will be some great financial bargains for travelers in terms of airfares, hotel rates, packages and more,” he said. “There will probably be outstanding pricing from a consumer standpoint as airlines look to get people back on airplanes,” and you couldn’t get those cheap fares if there were no airlines to sell them.
Featured photo by Robert Alexander/Getty Images.
WELCOME OFFER: 60,000 Points
TPG'S BONUS VALUATION*: $1,200
CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
- Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 60,000 points are worth $750 toward travel
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Earn 5X points on Lyft rides through March 2022. That’s 3X points in addition to the 2X points you already earn on travel.