Airlines saw a spike in passenger volume for the July 4th holiday weekend, but the numbers are still dismal for the industry (AAL, DAL, LUV, UAL)
US airlines saw more than 700,000 passengers per day three times over the July 4 holiday weekend. That's a new record for travel demand since the COVID-19 pandemic began. However, the numbers remained far below 2019 levels, as airlines continue to burn cash amid the drop in demand. More than 3.3 million people flew over the first five days of July, compared to more than 11.9 million during the same period in 2019. Visit Business Insider's homepage for more stories.
More than 3.3 million people traveled by air over the first five days of July, setting a new record for air travel during the coronavirus pandemic. Additionally, more than 700,000 people flew over three days of the long holiday weekend — July 2, 3, and 5, according to the US Transportation Security Administration — breaking that barrier for the first time since March 18, early into the pandemic quarantines. Despite the uptick in travel over the holiday period, however, the larger picture remains bleak for airlines in the US and globally. For instance, although the TSA saw 764,761 passengers on July 2, nearly 2.1 million people flew on the same day in 2019. Last year, nearly 12 million people flew during the first five days of July. Even with the holiday increase, travel demand is likely to come back slowly, especially as states across the US see record spikes in coronavirus cases. The overall number of travelers published by the TSA represents the total distributed across the nation's commercial airlines. Delta Air Lines CEO Ed Bastian said last week that the airline expected to fly just 600,000 passengers over the July 4 holiday weekend, compared to 3.2 million passengers last year — an 80% reduction. An American Airlines spokesperson told Business Insider that it was the airline's busiest weekend since March. Daily passenger counts in the US have grown steadily since mid-April, when the total hit a low of just over 87,000. However, that growth has been slow, and typically consists of passengers traveling for leisure, rather than more profitable business travelers. "Business travelers, who provide the bulk of our revenue, have not yet returned in significant numbers," Bastian wrote in last week's memo. Airlines in the US and globally have been decimated by the collapse of travel demand, particularly of business travel. Even as some corporate travel bans are lifted and certain unavoidable business travel resumes, such as that within the manufacturing sector, demand is expected to take 3-5 years to fully recover across the industry. US airlines are consequently seeking to cut staffing. While they are prohibited from laying off or furloughing workers through September 30, under the terms of the CARES Act, the notices have already started to go out to employees who will be impacted. American, for instance, issued its first furlough notices to management and support workers last week, while warning that it was overstaffed by about 7,000 to 8,000 flight attendants, and about 20,000 employees overall. In an effort to avoid or minimize layoffs, the major airlines have offered various voluntary separation options to workers, including buyouts and early retirements. These packages typically offer departing employees some form of continued pay, as well as helath and travel benefits. In Thursday's memo, Bastian urged workers to consider taking the "a once-in-a-career opportunity to depart Delta with generous cash severance and retiree medical and flight benefits." The airline said it would accept applications through July 13.SEE ALSO: American Airlines' decision to sell middle seats shows that the pandemic won't lead to more comfortable flights Join the conversation about this story » NOW WATCH: How waste is dealt with on the world's largest cruise ship
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United Airlines is warning of tens of thousands of possible layoffs as new coronavirus outbreaks across the US slam the airline industry (UAL)
United Airlines said travel demand is falling again, as COVID-19 hotspots break out across the US....United Airlines said travel demand is falling again, as COVID-19 hotspots break out across the US. The airline expects to warn tens of thousands of workers of impending furloughs and layoffs. United said it expects the airline industry to recover slowly, with demand rising and falling until there's a vaccine for the coronavirus. Visit Business Insider's homepage for more stories. Just as things were starting to improve for US airlines, the explosion of new coronavirus cases is set to send the industry back into a tail spin. Complicating matters are government travel restrictions and quarantine orders, which are making people nervous about booking flights. United Airlines told employees in a recent presentation that new bookings began to slide almost as soon as New York, New Jersey, and Connecticut said that they would require people coming from states with COVID-19 spikes to quarantine for 14 days. Specifically, reservations for near-term travel within the next 30 days began to plummet after steadily rebounding for months. The presentation, which was disclosed by United on Tuesday, was first reported by the Wall Street Journal. The fall was most severe at the airline's New York City-area hub in Newark, New Jersey, where near-term net bookings were just 16% of the previous year's levels — down from about a third shortly before the tri-state quarantine order was announced. The decrease in demand also coincides with when airlines are largely expected to begin notifying employees of furloughs and layoffs. While airlines are prohibited from furloughing or laying off workers until October 1 under the terms of the payroll support they received from the CARES Act, most employers are required to give 60 days of notice, where possible, under the Worker Adjustment and Retraining Notification Act, known as the WARN Act. In the presentation, United told its employees to expect WARN notices in early to mid July, with a final notice about their position's status coming in early August. American Airlines began informing some employees of furloughs in late June. Airlines including United have tried to limit involuntary layoffs by reducing head count through voluntary measures including buyouts, leaves, and early retirements. But it seems like that wasn't enough for United, and the airline reportedly said on Tuesday that tens of thousands of layoffs were coming. Notably, as the coronavirus resurgence has spread across the US, United said it was now clear that the airline industry's recovery will be a slow and protracted one, with many fits and starts. United "does not expect the recovery from COVID-19 to follow a linear path, as illustrated by recent booking and demand trends," the airline wrote in a filing with the SEC on Tuesday. "[C]onsolidated capacity through the end of 2020 is expected to be generally consistent with August 2020," the filing continued, indicating that the airline does not expect a material improvement in demand until at least 2021. Henry Harteveldt, an airline and travel-industry analyst, said he was not surprised by the bad news. "Houston, one of United's major hubs, is a virus hotspot, as is Los Angeles, another major United market," Harteveldt wrote to Business Insider on Tuesday. "Plus, Florida, a popular summer vacation destination, is another Covid hotspot. With the New York metro area and Chicago requiring quarantines from multiple states, including Florida, Texas and California, it's logical that United is seeing a fall-off in reservations. "Unfortunately, they won't be the only airline affected." In the SEC filing, United said it expects capacity to fall 65% in August compared to 2019. The airline estimated last week that the drop would be 60%, but United said it made adjustments to that announced schedule "resulting from reduced demand to destinations experiencing increases in COVID-19 cases and/or new quarantine requirements or other restrictions on travel." As air-travel demand has slowly picked up from lows reached in April, airlines have said most of the demand is coming from leisure and "VFR" travelers — those visiting friends and relatives — as states lift lockdowns and Americans seek to shake off the cabin fever built up after months in quarantine. Corporate travel, which yields higher margins for airlines than leisure, has not begun to meaningfully return.SEE ALSO: Leaked memo shows United is trying to convince some workers to quit ahead of layoffs, and it's offering up to 5 years of free flights as an incentive Join the conversation about this story » NOW WATCH: Swayze Valentine is the only female treating fighters' cuts and bruises inside the UFC octagon