businessAirlines

Parked jets and fewer flights: Government aid paves way for airlines to shrink during COVID-19 crisis

Proposed grants will pay for worker salaries so airlines can run operations that match the drop in passengers.

Rows and rows of empty seats are now common on commercial airline flights crisscrossing the United States. Many planes have fewer than a dozen passengers, even though they fit more than 175.

Southwest Airlines is operating its average plane less than 20% full, an executive there told employees this week. Statistics from the Transportation Security Administration showed that on Tuesday, only 279,000 passengers went to airports to get on commercial airliners, 13% of the traffic on the same day a year ago.

And even after cutting thousands of flights during the last week, American Airlines canceled more than half of its scheduled flights Wednesday.

In the coming weeks, more planes will be parked on airport taxiways as airlines shrink to respond to decimated demand and timid passengers. By early April, airlines will likely be flying a fraction of the planes and flights they did at this time a month ago, both because passengers are abandoning flying and the bailout lawmakers are set to approve lets airlines pay workers to sit at home.

“The airlines would like the government to say ‘Don’t fly’ because that would make it easier on all of them,” said Henry Harteveldt, an airline and travel industry analyst with Atmosphere Research Group. “But that doesn’t seem to be the case, so the only option is to run an operation that is much, much smaller.”

Lawmakers came to terms on a stimulus package deal early Wednesday that provides $25 billion in grants to cover airline payrolls and $25 billion more in low-cost loans to protect against liquidity problems.

Southwest and American declined to comment on any future plans until the stimulus package was signed into law.

With money in the bank to pay salaries, airlines won’t want to continue running planes with only a dozen passengers. The industry has already made drastic cuts in the last week.

Southwest is cutting 1,500 flights a day through mid-April, and American canceled 30% of its flights into April. On Wednesday, United Airlines announced another scheduled reduction, cutting about 70% of its flights in April compared with previous plans.

American also grounded about half of its fleet as well, while Southwest sent two dozen planes into storage this weekend.

The schedule cuts are coming faster and are more drastic with each passing week as many parts of the country, including Dallas County, send residents inside and restrict business activities.

Still, it hasn’t stopped the companies from canceling flights on the fly. American canceled nearly 2,000 flights on Wednesday and is proactively axing more on upcoming days.

“Many of the flights are being, what we call, operationally canceled,” said Jeff Pelletier, managing director of Airline Data Inc. in Dallas. “What that means is the airline is canceling the flight in the same way they would cancel it if, say, an aircraft went out of service. When this happens, they don’t change the schedule, they simply cancel the flight.”

Airlines didn’t always have these options without grants from the government to cover worker pay. Nearly 80% of American’s 130,000 workers are in unions and there are contracts that govern how much the company needs to fly, how many planes can be flown by regional carriers and what kind of planes will be flown.

Flight status boards show canceled Southwest airlines flights at Dallas Love Field on Friday, March 20, 2020, in Dallas. (Smiley N. Pool/The Dallas Morning News)
Flight status boards show canceled Southwest airlines flights at Dallas Love Field on Friday, March 20, 2020, in Dallas. (Smiley N. Pool/The Dallas Morning News)(Smiley N. Pool / Staff Photographer)

“It’s much easier to work with the company when you are not talking about the furlough of employees,” said Dennis Tajer, a spokesman for the Allied Pilots Association, which represents about 15,000 pilots at American. “We want this company to succeed and come out the other end strong.”

The government has also eased “slot restrictions” at airports that require airlines to maintain flying at the country’s most congested airports to keep their flying slots.

The ramifications could be huge in North Texas.

DFW International Airport has about 60,000 workers between those at American Airlines, other carriers, airport employees and those working in retail and restaurants. The stimulus package carves out about $3 billion for contractors.

Many of those workers will be getting paid, allowing those companies to reduce operations as well.

Southwest, which is headquartered at Dallas Love Field, has about 10,000 employees in the area. Then there are thousands of other workers at manufacturers such as Triumph, Boeing, Gulfstream and smaller companies that could be furloughed during the crisis.

American has already offered partial pay leaves and retirements to pilots and has given other union employees the ability to take voluntary, temporary leave with no pay, but retain benefits.

Tajer said the pilots union will be talking with the company in the upcoming days about what a smaller operation could look like. Pilots could simply fly less or take time off until passenger traffic recovers to a sustainable level.

With COVID-19 cases in the United States and Europe still increasing, it’s unclear how long or how much of an impact this will have on travelers in the long term.

Ticket prices have plunged by almost 50% in airports such as DFW and Dallas Love Field, said Devon Cameron, an analyst with travel website UpgradedPoints. The group also conducted a survey where 20% said they wouldn’t be willing to fly on an airplane until 2021.

But for North Texas’ big airlines, it could be a long road to recovery, especially in getting back aviation traffic, international routes and the economic progress lost to the COVID-19 pandemic.

“We believe we will see more of a U-shaped recovery and the recovery will take 18 to 24 months,” said Helane Becker, an airline analyst with investment firm Cowen. “We do not believe we will see a ‘normal’ year until 2022 or 2023 at the earliest.”

Connect with needs and opportunities from Get immediate access to organizations and people in the DFW area that need your help or can provide help during the Coronavirus crisis.

Kyle Arnold. Kyle Arnold is the aviation writer for The Dallas Morning News, covering airlines, air travel and the aerospace industry. He previously worked as a business journalist for the Orlando Sentinel, Tulsa World and The Monitor in McAllen. He is a University of Washington graduate.

kyle.arnold@dallasnews.com /bykylearnold kylelarnold
Business Briefing

Business Briefing

Become a business insider. Get the latest headlines delivered to your inbox every weekday.

By signing up you agree to our privacy policy