The brief bout of recovery recently witnessed in air travel demand while social lockdowns were being lifted and travel restrictions eased seems to have stalled once again amid the rising tide of new COVID-19 cases in the U.S., particularly in western and southern parts of the country.
Although Americans are eager for an escape after months of stay-at-home orders and tempted to take advantage of the summer months when they typically vacation, the virus' strong resurgence and uncontrolled community spread is enough to discourage most, who can't see confining themselves a plane cabin, sitting among strangers, no matter how many precautions airlines have put in place.
In a Spirit Airlines internal memo, issued on July 15 and acquired by The Points Guy (TPG), CEO Ted Christie announced that the ultra-low-cost carrier is cutting its August 2020 schedule down to an average of 380 flights daily. That number represents a fall from the airline's previous plan for the month of around 403 flights per day. Under the prior plans, Spirit would've flown roughly 64 percent of its August 2019 amount, according to data from Cirium.
Spirit isn't alone in identifying a need to rein in planned operations amid renewed COVID-19 concerns and the resulting drop in demand. Delta Air Lines CEO Ed Bastian stated during a July 14 second-quarter earnings call that his company's August schedule will also be sharply reduced, and United Airlines last week revised its prior plans to resume more flights next month, TPG reported.
Likewise, Southwest and Allegiant have recognized the drop in demand, citing the surge of new infections in the U.S. and state travel restrictions being enacted in response to the rising contagion.
Christie also warned Spirit employees of possible mass-scale involuntary furloughs that could take place this autumn, once the federal government's Payroll Protection Act expires. "If demand doesn't recover, we may need to right-size our operation for a smaller overall market which could lead to workforce reductions," Christie explained. "We're working hard to exhaust all other options before we get to that point."
He continued: "The leisure market we serve has been more resilient than the international and business markets [but] the changing headlines have impacted demand. It will be up to our leadership team to continue to assess the future operations, staffing and size of the airline."
All of the major U.S. airlines are faced with re-evaluating their staffing needs in light of dramatically reduced travel demand. American Airlines has already sent warning notices that roughly 25,000 of its employees are facing involuntary furloughs, and United issued its own warnings last week that around 36,000 jobs could be cut by October.
Bastian said that Delta, too, is still "overstaffed in some areas of the business," despite 17,000 of its employees taking voluntary departure packages. And, while Southwest Airlines has never imposed involuntary furloughs in its almost 50-year history, CEO Gary Kelly has acknowledged that the unprecedented state of the industry might make them necessary. He said on July 13, "We need a significant recovery by the end of this year-and that's roughly triple the number of passengers from where we are today."
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