Airline Passenger Counts Rebound Slightly — to 1956 Levels

The virus-ravaged U.S. airline industry rebounded ever so slightly in the past week, topping 100,000 passengers each day for the first time since early last month.

Airlines flew an average of 124,556 passengers a day April 24-30 after hovering at as little as 95,000 earlier in the month, according to data posted by theTransportation Security Administration.

But that offers little solace to the industry bleeding billions of dollars in losses with an uncertain path to recovery. Even Thursday’s total of 154,695 passengers who passed through TSA screening — the most since March 29 — is just 6% of the 2.5 million on the equivalent day last year.

“Each and every potential air passenger has a different risk profile, so it is difficult at this point to know what will be the catalyst to get people to fly again,” said a recent report byDeutsche Bank AG analyst Michael Linenberg and others.

Some people will begin traveling once shelter-in-place orders are lifted, while others will wait for better therapeutic measures to treat Covid-19 or the development of a vaccine, the report said.

As a result, it will take several years for airlines to come close to last year’s revenues and as many as seven years for passenger volumes to recover, it said.

For perspective, the low point in airline travel during mid-April was the week of April 10-16 when only 95,161 people flew a day on average. That was equivalent to the daily passenger count from 1954, according to data from the trade group Airlines for America.

This past week’s minor upturn means the industry has merely returned to the totals seen in 1956. The downturn far exceeds anything that has hit the U.S. aviation industry in its entire modern era.

After the Sept. 11, 2001, terrorist attacks prompted a brief shutdown of the airline system, traffic lagged for months. But the drop was far less severe. At most, the year-over-year passenger levels fell by about 10% to 15% in the aftermath, according to the trade group’s data.

It’s not entirely clear who is braving the current situation and flying on airlines. Anecdotally, there are emergency medical personnel, government workers and people who are doing so for family emergencies or other reasons.

“People still need to fly,”Southwest Airlines Co. Chief Executive Officer Gary Kelly said last month. “We need to be there for those who still have to travel for essential work that’s happening.”

American Airlines Group Inc. Chief Executive Officer Doug Parker said its current customers include “medical professionals flying where they are most needed and family members getting to where they feel most safe.”

Jude Bricker, the chief executive officer ofSun Country Airlines Inc. said leisure destinations that have largely been shuttered during the epidemic, such as Las Vegas and Florida, have seen the biggest declines.

Destinations where golf or family activities can still occur are seeing a gradual return of demand, Bricker said. Those include Phoenix, Palm Springs and Southern California.

The passenger airlines are eligible for as much as $50 billion in loans and payroll assistance from the federal government, which has staved off massive job losses for the time being. Carriers who accept money for wages agreed not to trim payrolls through September.

“Unfortunately, we simply don’t see any way for most US airlines to avoid massive layoffs unless the industry specific payroll protection grants/loans are extended,” saidJPMorgan Chase & Co. analyst Jamie Baker said in an April 14 report.

Source: Read Full Article