Tanzina: The airline industry is preparing for some major turbulence this week. On Thursday, the $25 billion the industry received as part of the CARES act in April is set to expire. The airline industry has been one of the hardest hit by the coronavirus pandemic and letting the funding lapse could be another devastating blow to an industry already in crisis. The Washington Post estimates that more than 35,000 airline employees across the US will be furloughed or lose their jobs on October 1st. For more on this, I'm turning to Benet Wilson, the senior editor at the travel site, The Points Guy. Benet, welcome back to the show.
Benet: Thank you, Tanzina. Glad to be here.
Tanzina: Why is the airline industry struggling so much? They got $25 billion in April. Is it because there aren't as many people flying?
Benet: Yes. The 25 billion was some good relief for an industry that has been devastated by this pandemic, but it was just a bandaid, a temporary fix.
Tanzina: Was it meant to shore up or make up for the lack of passengers? What was the 25 billion meant to actually do in terms of that temporary bandaid?
Benet: It was meant to keep the airlines in business as they dealt with the aftereffects of the pandemic. They had to ground a lot of their fleet, they had to cut routes. That really hit the bottom line and that 25 billion helped preserve airline routes and keep employees in their jobs.
Tanzina: We just said that there will, at least The Washington Post is estimating more than 35,000 airline employees could lose their jobs in about a couple of days now, as this funding runs out. What types of jobs are we expected to see furloughed or let go?
Benet: It's going to be all across the board, but understandably the biggest parts will be pilots, flight attendants, gate agents, rampers, the people who actually help get the planes on the ground and in the air. Because people aren't flying as much, a lot of the fleet has been grounded and routes have been cut.
Tanzina: What about individual airlines themselves like Delta, Southwest, American? How have they responded to the pandemic? I mean, did they adopt certain strategies to make passengers feel more comfortable, Benet? I think originally there were social distancing requirements on planes, but I think that may have changed. Where do they stand individually right now?
Benet: Well, the three I like to highlight our Delta, Southwest, and JetBlue. I think Delta has done the best job by far. They've been very informative, they've been very open and they are keeping their middle seats open through the end of January. They've talked about their procedures to clean the planes and they also are requiring that all passengers wear masks like the other airlines. Southwest is similar, although they're only blocking middle seats until November 30th, and JetBlue, again, they're blocking middle seats until October 15th. Although, these dates are subject to change because they have changed since this was first announced.
Tanzina: Do airlines need to rebuild trust with customers, Benet? I'm going to ask it in the broader context here. Before the pandemic flying at least for, I guess, more pedestrian folks like myself who are not sitting in the prime seats and the first-class seats, started to become not as pleasant as it once was, as I remember it being when I was a kid. Then the pandemic hit and now people are cautious about flying. Do they need to establish or re-establish trust with us?
Benet: Absolutely. I think some are doing better than others. One of the big things was when United announced it was dropping the $200 change fee. That was huge. It was one of those fees that really annoyed passengers. The fact that United decide to do that and the others followed except for Southwest, which doesn't have fees, the fact that United did that shows that they're really looking to bring passengers back.
Tanzina: I think there is a lot of frustration with the airline industry. Maybe more broadly in the sense that people, like you said, there was a $200 change fee, now you have to pay more money if you want an aisle seat, if you want a window seat, if you want to sit in a certain part of the plane. We're not just talking about first class, I mean, we're talking about incrementally better seats, right? Comfort plus, for example, charges you more. I think a lot of passengers and customers are feeling nickel and dimed by this industry that continues to get federal bailouts. How do we square that circle?
Benet: Well, they get these ancillary fees because they bring in billions of dollars a year, it's what helps keep their bottom lines in the BLACK. But now with passenger numbers plummeting and people being very reluctant to get on planes, they have to do something to shake things up and the first one was change fees. I wouldn't be surprised to see more fees fall by the wayside as we go forward.
Tanzina: Do you suspect that that would be a temporary fix, Benet, or is that something that once regular travel presumes, and we still don't know when that will be, that these airlines will go back to fees for everything?
Benet: Well, United said that this change on the change fees was permanent, but until we know what other fees will drop and what the conditions are attached, we don't know. But personally, I think it would be hard to give up that revenue if passenger numbers come back up.
Tanzina: Benet, this isn't the first time the airline industry has had a crisis it's had to navigate. How does it compare though to crises like the September 11th terrorist attacks, for example, or the 2008 recession?
Benet: This one is really different, because with 9/11, that happened in the United States and it was not a pandemic, it was a terrorist attack. We did see numbers fall somewhat, but they came back up and it didn't really affect the rest of the world. With the 2008 recession, numbers did go down, but not nearly as low as they are during this, of course, again, it was a more US-centered recession, although other countries were affected. This one is, it's affecting the entire global airline industry. Everyone is in pain.
Tanzina: Benet Wilson is a senior editor at the travel website, The Points Guy. Benet, thanks so much.
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