Tag Archives: Airlines for America

Major U.S. airlines announce additional health requirements

Airlines for America (A4A), the industry trade organization representing the leading U.S. airlines, announced that its member carriers are voluntarily implementing temporary health acknowledgment policies and procedures for passenger travel as an additional level of mitigation to prevent the spread of the novel coronavirus pandemic. Health acknowledgments are another important way passengers can “fly smart” and do their part to help prevent the spread.

Alaska Airlines, American Airlines, Delta Air Lines, Hawaiian Airlines, JetBlue Airways, Southwest Airlines and United Airlines will require passengers to complete a simple health acknowledgment during the check-in process. Health acknowledgements typically cover three primary areas:

  • Face Coverings – assurance that passengers will bring a face covering and wear it at the airport, on the jet bridge and onboard the aircraft;
  • Symptoms – assurance that the passenger is not experiencing a temperature (38C/100.4F or higher), coughing, shortness of breath/difficulty breathing, loss of taste or smell, chills, muscle pain and/or sore throat; and
  • Exposure – assurance that the passenger has not had close contact with someone who tested positive or had symptoms of COVID-19 in the last 14 days.

Health acknowledgments encourage passengers to make an evaluation of their own health prior to travel. Passengers who fail or refuse to complete the health acknowledgment may be deemed unfit to travel and each carrier will resolve the matter in accordance with its own policies. This measure is expected to remain in place throughout the COVID-19 public health crisis.

“Health assessments prior to air travel are just one more important measure in our multi-layered approach to help mitigate the transmission of COVID to passengers and employees,” said A4A President and CEO Nicholas E. Calio. “We want passengers to know that this is another change they should expect the next time they fly.”

A4A’s member carriers are also vigorously enforcing face covering requirements, as well as enhancing cleaning protocols and adjusting policies to limit onboard interaction.

U.S. airlines also encourage the traveling public to follow all CDC recommendations – including frequent hand-washing – for their protection as well as that of others.

Statement from A4A President and CEO Nicholas E. Calio on Passage of the CARES Act

On behalf of U.S. airlines and our 750,000 employees, we commend the Administration and the U.S. Congress for passing the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which includes provisions intended to assist the U.S. airline industry to continue making payroll and protect the jobs of hardworking men and women – pilots, flight attendants, gate agents, mechanics and others. We also are grateful for President Trump’s pledge to sign the legislation quickly.

We thank President Trump and Vice President Pence for their strong leadership for our country during this sudden and devastating health crisis. Secretary Mnuchin, who skillfully brokered agreement among the multiple interests involved, continues to demonstrate his appreciation for investing in our American workforce, and Secretary Chao constantly exhibits her vast knowledge and full dedication to strengthening our nation’s transportation infrastructure, especially aviation.

We applaud the efforts of Speaker Pelosi, Majority Leader Hoyer and Minority Leader McCarthy to secure bipartisan passage of the CARES Act, which is critical to starting the economic recovery of our country; House Transportation and Infrastructure Committee Chairman DeFazio for recognizing the importance of protecting the airline industry’s jobs; House Transportation and Infrastructure Committee Ranking Member Graves for understanding the need for a multi-tier approach to financial assistance; and Ways and Means Committee Chairman Neal and Ranking Member Brady whose understanding of the pandemic’s impact on business was instrumental. We also want to recognize all Members of Congress, Democrats and Republicans, who traveled from their home districts – many of whom flew on U.S. airlines – to Washington, D.C., in time to cast votes in a bipartisan manner in support of the CARES Act to provide emergency relief for our country. No doubt, they flew on almost empty planes – a clear signal how this natural health emergency has devastated the U.S. airline industry.

Air carriers have been doing everything possible to protect the jobs of men and women who are directly employed by U.S. airlines – including pilots, flight attendants, gate agents and mechanics – as well as the 10 million jobs supported by the industry during this global health crisis. Our employees are the backbone of the industry and our greatest resource. U.S. airline employees wrote more than 450,000 letters to Congress communicating the value of their jobs and requesting immediate federal assistance to protect those jobs. The Direct Payroll Assistance provisions in the legislation are designed to provide immediate financial relief that is necessary to continue funding the payrolls of U.S. airlines. We remain hopeful that the federal government will expeditiously release these funds with as few restrictions as possible to ensure airlines are able to utilize these provisions and meet our payroll.

Before this global emergency, U.S. airlines were transporting a record 2.5 million passengers and 58,000 tons of cargo each day. Today, carriers are burning through cash as cancellations far outpace new bookings for U.S. carriers, planes are only 10-20 percent full and new bookings are showing 80-90 percent declines in traffic even as airlines make dramatic cuts in capacity. This week, TSA screened just 454,000 passengers on Sunday; 331,000 on Monday; 279,000 on Tuesday; 239,000 on Wednesday; and 204,000 on Thursday. This situation is getting worse each day with no end in sight.

The U.S. all-cargo carriers have been on the frontlines of this global health crisis since January, operating in heavily impacted areas to provide continued connectivity and delivery of critical humanitarian aid shipments around the world. At the same time, they have faced significant increases in operating costs due to changing entry requirements, often imposed with no notice.

The impact of government- and business-imposed travel restrictions and public fear have devastated the U.S. airline industry, our employees, travelers and the shipping public. Since the beginning of March, U.S. air carriers – both passenger and cargo – have seen their positions of strong financial health deteriorate at an unprecedented and unsustainable pace. The human, financial and operational impacts are devastating, and the future remains uncertain.

U.S. airlines seek assistance from the government

Airlines of America made this announcement on behalf of U.S. airlines:

This is an extremely fluid situation that is evolving rapidly. The rapid spread of COVID-19, along with the government and business-imposed restrictions on air travel, are having an unprecedented and debilitating impact on U.S. airlines. Carriers have seen a dramatic decline in demand, which is getting worse by the day. Carriers have been forced to remove flights from their schedule and make historic capacity cuts. Cancelations are spiking, and for U.S. carriers those cancelations are outpacing new bookings. The economic impact on U.S. airlines, their employees, travelers and the shipping public is staggering. This crisis hit a previously robust, healthy industry at lightning speed and we remain concerned that the impacts of this crisis will continue to worsen.

U.S. carriers are in need of immediate assistance as the current economic environment is simply not sustainable. This is compounded by the fact that the crisis does not appear to have an end in sight. In order to combat this unprecedented economic downfall, A4A is recommending the following combination of programs to provide immediate and medium to long-term assistance to the U.S. airline industry and protect their employees: 1) grants; 2) loans; and 3) tax relief:

U.S. airlines take great pride in the 750,000 men and women they directly employ — from pilots, flight attendants, to reservation agents and mechanics. Each U.S. carrier is having direct and continuous conversations with their employees, and everyone understands the severity of the situation. The current economic environment is simply not sustainable, and it is compounded by the fact that the crisis does not appear to have an end in sight. In order to combat this unprecedented economic downfall, Airlines for America recommends the following combination of programs to provide immediate and medium to long-term assistance to the U.S. airline industry and their employees: 1) grants; 2) loans; and 3) tax relief.

GRANTS: IMMEDIATE ASSISTANCE

  • Passenger Carriers: Grants to U.S. Part 121 passenger air carriers in the aggregate amount of $[25]B to compensate for reduced liquidity (net of financing) – from Dec. 31, 2019 through Dec. 31, 2020 – attributable to the novel Coronavirus (or COVID-19).
  • Cargo Carriers: Grants to U.S. Part 121 cargo air carriers in the aggregate amount of $4B to compensate for reduced liquidity (net of financing) – from Dec. 31, 2019 through Dec. 31, 2020 – attributable to COVID-19
  • LOANS: MEDIUM TO LONG-TERM LIQUIDITY MEASURES

• Unsecured Loans/Loan Guarantees: A voluntary liquidity facility program in an aggregate amount up to $[25]B pursuant to which the Federal Reserve would purchase financial instruments from or provide zero interest unsecured loans or zero interest unsecured loan guarantees to U.S. Part 121 passenger air carriers and up to an aggregate amount of up to $4B to U.S. Part 121 cargo air carriers.

o The process should be simple, straight forward, and streamlined.

o Eligible financial instruments will include but not be limited to commercial paper and term loans.

o Given the credit profile of the industry prior to the onset of COVID-19, participation should be open to all carriers, no carrier shall be required to collateralize any instrument, and the particular instruments purchased or guaranteed should be structured so as to expedite the participant’s ability to re-access the private capital markets as promptly as practical and to stabilize their existing credit ratings.

• Urgency: The grant program will be designed and implemented by the Department of Treasury, and the liquidity facility program will be designed and implemented by the Federal Reserve. Treasury will implement a process for payment of the grants immediately following enactment of the legislation and the Federal Reserve will implement a process for the purchase of financial instruments within [15] days.

TAXES: RELIEF

  • 2020 Excise Taxes: Rebate to U.S. Part 121 air carriers the amount of federal excise taxes paid into the Airport and Airway Trust Fund (AATF) that have been remitted to the U.S. Government beginning January 1, 2020 through March 31, 2020.
  • Temporary Aviation Excise Tax Repeal: Temporary repeal of all the federal excise taxes on Part 121 air carriers, including those taxes on tickets, cargo and fuel through December 31, 2021 (i.e., Internal Revenue Code (IRC) sections 4261(a), 4261(c), 4261(b), 4261(e)(3), 4271 and 4081(a)(2)(c)(i)), subject to a trigger for a further extension beyond 2021 dependent upon economic circumstances.

U.S. airlines are in continuous conversations with the Administration, Congress and labor unions in an effort to secure financial assistance from the federal government to protect and preserve the 750,000 jobs of hardworking men and women who are directly employed by U.S. airlines, as well the 10 million jobs supported by the airline industry. This includes pilots, flight attendants, mechanics, gate agents, ticket agents, parking attendants and many more. Our employees are truly the backbone of the U.S. airline industry and our greatest resource, and U.S. carriers are doing everything in their power to protect their livelihood.

Airlines for America predicts the busiest summer season ever

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Airlines for America (Washington), a trade group representing the United States airlines, forecasts the busiest summer season ever. The group estimates 222 million passengers will fly on U.S. airlines from June 1 through August 31, up 4.5 percent from the same season a year ago.

U.S. airlines, according to the report, are collectively increasing the number of seats by 4.6 percent to meet the forecast demand.

Here is the report:

Airlines for America (A4A), the industry trade organization for the leading U.S. airlines, forecast that summer 2015 air travel would rise to its highest level ever while reporting that U.S. passenger airlines achieved strong operational performance and improved profitability in the first quarter despite another harsh winter.

“The continued rise in U.S. consumer sentiment and employment is leading to more people traveling more often, and air travel remains one of the best consumer bargains in America”

A4A projects approximately 222 million passengers (2.4 million per day) are expected to fly on U.S. airlines from June 1 – Aug. 31, up 4.5 percent (104,000 passengers per day) from 2014. This includes 31 million travelers (332,000 per day) on international flights – a record high. To accommodate the expected growth in demand, airlines are increasing the number of available seats by 4.6 percent, or 126,000 per day, during this period.

Published airline schedules show Canada, Mexico, the United Kingdom, Germany and Japan, respectively, as the top five nonstop international destinations from the United States. Year over year, airlines are adding the most seats to the marketplace for flights between the United States and Mexico, the United Kingdom and China.

“The continued rise in U.S. consumer sentiment and employment is leading to more people traveling more often, and air travel remains one of the best consumer bargains in America,” said John Heimlich, A4A Vice President and Chief Economist. “With 13 of the 15 busiest air travel days of the year falling in the summer months, U.S. airlines are well-prepared to accommodate the increased travel demand by adding flights and seats, and deploying new and larger aircraft, along with a boost in staffing to enhance the customer experience.”

Improving Finances Benefiting Customers, Employees, Investors and the Overall U.S. Economy

During the first quarter of 2015, 10 publicly traded U.S. passenger carriers collectively reported a Generally Accepted Accounting Principles (GAAP) net profit of $3.1 billion, or 8.4 percent, which improved from 1.1 percent during the same period in 2014. Operating revenues rose 3.1 percent year over year, due in large part to a 3.9 percent increase in the number of air travelers, which is the equivalent to an additional 72,400 passengers per day. Wages and benefits rose 10.5 percent, overtaking fuel for the top spot among industry operating expenses. While the 8.4 percent margin is an improvement over last year, it leaves the industry shy of the U.S. corporate average of 9.8 percent, as measured by the Standard & Poor’s (S&P) 500.

Heimlich noted that February 2015 was the 15th consecutive month of employment gains at U.S. airlines, having added nearly 9,500 jobs over the past five years.

Despite entering 2015 with approximately $66 billion of debt and coping with another harsh winter, meaningful financial progress enabled carriers to continue significant levels of reinvestment to further enhance operational reliability and the customer experience. First-quarter capital expenditures for the nation’s airlines totaled $3.6 billion, on track to exceed $14 billion for the full year. Collectively, these 10 airlines are slated to take delivery of 367 new aircraft in 2015, or the equivalent of roughly one per day.

“Healthy air-travel demand and lower, yet still volatile, fuel prices are helping U.S. airlines close the gap to average U.S. corporate profitability,” said Heimlich. “In the first quarter, airlines invested more than $20 per passenger in capital improvements, taking care of employees, continuing to pay down debt and returning cash to shareholders.”

1Q 2015 Financial Summary

Net profit: The $3.1 billion profit and 8.4 percent net margin reflect the results of 10 U.S. passenger airlines – Alaska Airlines, Allegiant Air, American Airlines, Delta Air Lines, Hawaiian Airlines, JetBlue Airways, Southwest Airlines, Spirit Airlines, United Airlines and Virgin America.
Operating Revenues and Expenses: Revenues increased 3.1 percent year over year and total operating expenses declined 6.7 percent, due in large part to lower fuel costs. Total fuel expenses for the group fell 32.9 percent. The decline in fuel costs exceeded increases in labor, airport-related and aircraft costs.

Capital Expenditures (CapEx): U.S. airlines reinvested $3.6 billion in the product and customer experience during the first quarter. Airline CapEx rose 170 percent from 2010 to 2014; more than $14 billion of reinvestment is expected in 2015.
1Q 2015 Operational Performance

Customer Service: U.S. passenger airlines’ operational performance improved markedly year over year as airlines invested in systems, procedures and staffing operations to cope with the winter weather. According to the Department of Transportation, first quarter 2014 to first quarter 2015, U.S. carriers improved the rate of completed flights from 95.4 percent to 96.9 percent. On-time arrival rate increased from 72.2 percent to 76.3 percent, and the share of passengers having their bags properly handled rose from 99.56 percent to 99.61 percent. The rate of involuntary denied boardings fell from an already low 1.37 per 10,000 customers to 0.85 per 10,000.

Meanwhile the group previously forecast spring travel to rise to the highest level in seven years:

Airlines for America Spring 2015 Travel

 

Airlines for America projects 2 percent more passengers to fly during Labor Day travel period, net profits up for nine U.S. airlines for the first half of 2014

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Airlines for America (A4A), the industry trade organization for the leading U.S. airlines, has delivered its Labor Day air travel forecast and first half 2014 results for U.S. passenger airlines, which reported improving profitability, enabling carriers to invest in their workforce, reduce debt and enhance the customer experience for airline passengers.

“Airlines are key drivers of jobs and economic growth, and improving finances have further accelerated their investments in people, products and technology to enhance the travel experience for customers”

A4A projects a 2 percent year-over-year increase in the number of passengers flying on U.S. airlines during the seven-day Labor Day travel period. From Wednesday August 27 through Tuesday, September 2, A4A expects 14 million air travelers will take to the skies, up from an estimated 13.8 million in 2013, with the busiest day of the period occurring on Friday, Aug. 29. Airlines are adding seats to the marketplace to accommodate the expected increase in demand.

First Half 2014 Financial Performance

Nine U.S. passenger airlines – Alaska, Allegiant, American, Delta, Hawaiian, JetBlue, Southwest, Spirit and United – collectively reported a net profit of approximately $3.8 billion, up from $1.6 billion during the same period last year. This translated to a net margin of 5 percent, or 5 cents on every dollar of revenue, an improvement from the 2.1 percent margin reported in the first half of 2013.

The year-over-year improvement was driven by a 6 percent increase in operating revenues, which outpaced the 2.2 percent increase in operating expenses, including rising wages and benefits, airport landing fees, terminal rents and aircraft ownership costs. Despite remaining their largest and most volatile cost, fuel costs dipped 2.4 percent. Airlines also saw modest relief in maintenance expenses and aircraft rents.

“Airlines are key drivers of jobs and economic growth, and improving finances have further accelerated their investments in people, products and technology to enhance the travel experience for customers,” said John Heimlich, A4A Vice President and Chief Economist. “With U.S. personal incomes continuing to outpace airfares, air travel is far more accessible to customers than it was in the past.”

While airfare remains affordable, airlines and their customers continue to pay more than their fair share in federally imposed taxes. From 2000 to 2013, adjusted for inflation, base fares dropped 8 percent while taxes rose 49 percent. Four decades ago, taxes and fees accounted for less than one-tenth of the price of an airline ticket. Today, the amount has skyrocketed to 21 percent of the price or $62 on a typical $300 roundtrip domestic ticket. That amount further increased in July to $63 when the passenger tax more than doubled to $5.60 on a one-way trip. It could go even higher if other taxes proposed by the White House become law.

In the first half of 2014, these nine airlines invested $7 billion – more than $1 billion per month – to benefit customers. New and refurbished aircraft are being delivered at a rate of nearly one per day, including 149 received in the first six months and 168 additional units slated for delivery in the remainder of the year. Additional investments include route expansion, development of mobile technology, enhanced airport check-in areas, lounges and gates. Additionally, airlines were able to further reduce gross debt by $1.8 billion.

First Half 2014 Operational Performance

U.S. airlines overcame numerous extreme weather events, such as the polar vortex and severe thunderstorms, to post a completion factor of 96.9 percent and an on-time arrival rate of 74.2 percent. According to the Department of Transportation, 99.6 percent of passengers had their bags properly handled and complaints remained low at 1.49 per 100,000 passengers.

“Customers continue to benefit from the proactive approach airlines are taking to cope with extreme weather and minimize travel disruptions,” said Heimlich. “Despite some of the worst winter weather conditions in recent memory, airlines continued to meet the needs of their customers, while connecting communities and economies and creating jobs.”

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