A recovery for airlines is largely based on when people feel comfortable flying again. Some people are genuinely scared to fly right now, while other people are trying to do the socially responsible thing.
As we watch data from the TSA on passenger numbers, we see a steady increase in the number of travelers, though the recovery is still very slow. We’ve gone from a ~96.4% decrease in passenger numbers to “only” a ~92.5% decrease in passenger numbers.
Most airline executives believe that demand bottomed out in early April, though there are disagreements about just how long the recovery will take.
Along those lines, I think it’s interesting to hear how our leaders view a return to normal for airlines. President Trump was asked by reporters how he would assess the confidence the American public has in traveling on airlines.
Here’s his answer:
“They have great confidence, and they have great confidence in us, and they have great confidence in the airlines. We saved the airlines with $25 billion and another $25 billion. We have airlines that are now in good shape, obviously they are going to pick up with the fares and with the seats. The airline industry is in good shape. We’ve been able to save the airline industry, which would have been devastating if that happened. So, they’re in good shape.”
I’m sure we’re all wondering how this situation will play out over the coming months. While the airlines did receive around $50 billion in grants and loans, that will only last them through September.
Most airline executives believe a recovery will take a lot longer than that, and the expectation is that they’ll be asking for another bailout in a few months. It’s not entirely clear whether Trump’s belief that airlines are in “good shape” refers to the next few months, or if he actually thinks that airlines have everything they’ll need to survive.
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