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Airlines predict prolonged coronavirus drought

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U.S. airlines expect it will be years before their business recovers from the coronavirus pandemic, even after raising more than $ 100 billion by tapping into government aid and mortgaging assets, including airplanes and loyalty programs.

The carriers said they likely have enough cash on hand to withstand a prolonged downturn. But passenger demand will be depressed for years, the CEOs of United Airlines Holdings Inc. and Delta Air Lines Inc. said this week.

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Airlines have two main challenges: alleviating the fear of flying that took hold during the pandemic and reinvent yourself to compete part of an airline company that suddenly became much smaller.

“Although the pandemic is the worst crisis in aviation history, it has also offered us an opportunity,” United chief executive Scott Kirby and chairman Brett Hart wrote in a note to company executives on Friday. Aerial.

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UALUNITED AIRLINES HLDG.34.16-0.09-0.26%
OFDELTA AIR LINES INC.31.47+0.13+ 0.41%

United and Delta together lost $ 16.8 billion in the first nine months of the year. Both have downsized by at least 20%, including more than 13,000 on leave at United.

“Make no mistake, we are still in the first miles of this marathon,” Delta general manager Ed Bastian wrote in a note to employees on Thursday.

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Airlines had been pushing for a second wave of government aid to avoid job cuts, hoping to be better prepared to rebound when demand returns. however, negotiations on a larger back-up plan have hung around for months without resolution.

American Airlines Group Inc. and Southwest Airlines Co. are expected to release their third quarter results next week.

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AALAMERICAN AIRLINES GROUP INC.12.46+0.23+ 1.88%
LUVSOUTHWEST AIRLINES CO.39.68+0.88+ 2.27%

The passengers have started to come back, but they are a trickle, not a push. When nearly a million people passed through U.S. airports on Sunday, volumes were over 60% lower than the same time a year ago, and on most days the volumes are worse than that. .

And with most business travel still on hold and international borders closed or subject to a range of entry requirements, some analysts see little room for improvement for a while. Delta expects fourth quarter sales to be 66% lower than last year’s levels. United’s Mr Kirby said travel demand will likely be capped at half of typical levels until a vaccine is developed and widely available. Business travel is unlikely to return to normal until 2024, he predicted.

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As people return to some parts of their normal lives – returning to work or school in some cases – airlines are redoubling their efforts to convince them that it is also safe to get on a plane.

This claim was reinforced this week by the results of a study of the movement of viral particles during flights, conducted by the Department of Defense, United, Boeing Co. and others.

Using cough dummies that spit fluorescent tracer particles onto widebody Boeing planes on loan from United, the study found that aerosols are quickly diluted by aircraft ventilation systems and air filters. The risk of exposure is minimal, even for passengers on long flights sitting next to an infected person, according to the study.

There were caveats: the study looked at what happens if one passenger is infected, not several, and does not take into account the additional risks of passengers moving around the cabin or turning their heads to talk to each other.

Other university researchers have documented nearly four dozen cases where Covid-19 appears to have been transmitted during flights, many at the start of the pandemic before masks were widely needed.

Military officials and airline executives said they were encouraged by the new study’s results. On social media, United touted the study, which Kirby said shows planes are “really exceptionally safe.”

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Even though people can be persuaded to board planes, there are fewer places to go.

Efforts to create travel bubbles in Asia have failed, and increase in cases in Europe have resulted in tighter travel restrictions there.

Something similar could happen in the United States, if infection rates continue to climb. Over the summer, an increase in cases in parts of the country travel restrictions triggered which cut short what had looked like the beginnings of a rebound, leaving airlines to decide how best to serve aviators. Today’s customers book last minute, pay great rates, and fly short distances.

“We’re literally looking at where people want to go next week,” said Joe Esposito, senior vice president of network planning at Delta, at an industry event this week.

United is monitoring metrics like occupancy rates for New York City skyscrapers to get a sense of when people might start traveling for work again, Chief Commercial Officer Andrew Nocella said Thursday.

Carriers are also seizing the opportunity to take up space at once congested airports. The Southwest announced this week that it will begin flights at major airports in Chicago and Houston, adding to its presence at secondary airports in both cities and face to face against United in its hubs.

Mr Kirby said United have their own plans. The airline is considering returning to New York’s John F. Kennedy International Airport, he said. Mr Kirby has long said he believes United made a mistake by leaving JFK in 2015 before joining the company.

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