Fallout From COVID-19: Potential Impact to US Airlines and Employees
The news regarding the efforts to stop the spread of the coronavirus as well as its wider ranging impacts on healthcare and the economy is constantly expanding. This paper is meant to present a rough snapshot of the whirlwind of changing state-of-affairs that are rapidly developing over the past week, with particular focus on the airline industry. Several carriers have announced large scale cuts to capacity over the short term and prospects for job loss are increasing for the first time in a decade. The industry has faced job losses exceeding 150,000 in the past caused by external events of 9/11 and the 2008 meltdown. While it is true that fuel prices are down, aircraft are being parked, and low fuel costs do not offset a loss of jobs due to excess capacity. Air carriers today are fewer and are in much better financial shape than in the past but are still likely to need assistance in coping with the financial fallout from the coronavirus and to protect airline jobs. The reaction to the virus has now likely triggered a longer-term economic recession and a bear market, with impacts likely outlasting the current health crisis. As the virus inevitably spreads the impacts on the industry and the economy in general will grow, affecting the airline business most acutely as the health care crisis likely turns into a prolonged economic slow-down. As more health effects and economic impacts are realized in the coming months, this analysis will be updated as needed.
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