Air-passenger count falls below 100,000

Companies cut flights as losses pile up

Over the past three weeks, the number of people flying in the U.S. has fallen as the pandemic has kept people home. But on Tuesday, the levels crossed a stark dividing line: fewer than 100,000 people, which is 95% below the level of a year ago.

Air travel in the U.S. fell to zero for a handful of days after the Sept. 11, 2001, terrorist attacks, and the industry was depressed for months. But the drop wasn't nearly as prolonged as the effects so far from the coronavirus, which has prompted widespread stay-at-home orders.

"I don't think there is any question that this is the largest sustained drop," said John Hansman, a professor at the Massachusetts Institute of Technology who focuses on aviation.

Airlines have been cutting their schedules as they face billions of dollars in losses, but those cuts haven't been at the same rate as the plunge in customers.

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On Tuesday, 97,130 people passed through security gates at U.S. airports. Because that includes airport workers and flight crews, the number of passengers is even lower, according to the Transportation Security Administration.

The total is less than what some of the country's largest airports screen on a busy summer day, Transportation Security Administration spokesman Mark Howell said in a tweet.

Since March 16, the number of people flying on airliners has fallen on all but two days, according to figures compiled by the agency.

There were 1.3 million people still flying on that day, which was 47% below the same day in 2019. Since then, levels have marched downward dramatically, according to the Transportation Security Administration.

The agency, which was created after the Sept. 11 attacks, has collected reliable passenger data for about 10 years, spokeswoman Lisa Farbstein said in a tweet.

Each new low in recent weeks has set an agency record for the fewest number of people to go through screening, Farbstein said.

The virus and its effect on aviation has triggered economic uncertainty for airlines and their employees, as well as airport workers and contractors. The $2 trillion economic stimulus plan from the federal government included more than $70 billion in loans and payroll subsidies for the industry.

People who have opted not to fly, often heeding government stay-at-home orders, say they are also suffering. In many instances, they are entitled to credits only for future travel and can't get refunds.

Hansman said the decline in passengers is unlike any previous shock after economic downturns, terrorist attacks, wars or other events since the start of long-range jet travel.

Economic data from previous downturns suggests that the practice of lowering fares to spur demand has led to long periods of unprofitability for airlines. For more than a decade after 2001, airlines went through waves of bankruptcies, layoffs and mergers before rebounding.

"The scary thing here is that there is no clear trajectory for the recovery buildup," Hansman said. "Until there is a widespread vaccine -- or herd immunity -- there will be barriers to travel, and it is not clear what the demand will be, but it will be slow."

The bleak picture is compounding an already dire financial situation for the airlines, which are burning through cash and talking to the Treasury Department about grants. Newly revised federal rules will let the companies cut some routes by as much as 90% through September and eliminate others altogether to avoid flying nearly empty planes.

A carrier that served a city less than five times weekly would need to provide only one flight a week under final Transportation Department rules issued Tuesday on minimum domestic flying levels through Sept. 30. A company with more than 25 weekly flights would be able to scale back to only five. On some routes, the drop in service could be about 90%.

The regulations open the door to major service reductions as airlines gird for a lean summer, when planes are usually jammed and the industry collects its largest profits.

"The airline companies are hurting badly," Transportation Secretary Elaine Chao said on Philadelphia's KYW-AM radio station last week. "But there are still people that need to get to, for example, New York to California. They can't spend three days driving."

Information for this article was contributed by Justin Bachman and Mary Schlangenstein of Bloomberg News.

Business on 04/09/2020

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