United Airlines CEO: business travel is "almost nonexistent", need vaccine for aviation to recover

[Demovictory9]

"It was a remarkable bipartisan response really to rescue not just the aviation industry, but the whole economy back in March, an unprecedented bipartisan response," Kirby said in an interview on CBS' "Face the Nation." "But this is lasting longer and is deeper than most people thought back then. And our revenue, we just said, is going to be down 85% in the third quarter. And in a world like that, United Airlines and others come Oct. 1, without an extension of the CARES Act ... is going to be forced to lay off employees just to survive."

He explained that business travel is "almost nonexistent" while leisure travel is "down significantly from where it was before." As for international travel, United's revenue was down 96% year-over-year for the second quarter and continues to take a hit as coronavirus restrictions keep borders closed.


Kirby said that demand for air travel shows no sign of rebounding anytime soon without people feeling safe around each other.

"That's going to take a vaccine, and that's just the reality," Kirby said. "Some businesses can recover earlier, but in aviation and all the industries that we support, it's going to take longer."

While the airline has gone to the private market for roughly $18 billion in capital to get through the pandemic, Kirby said it isn't a sustainable long-term strategy as millions of dollars are burned each day.

https://www.foxbusiness.com/economy/united-ceo-warns-airlines-economic-woes-will-get-worse-without-vaccine-new-round-of-stimulus

"In a world where we're still burning $25 million per day, you just can't go forever on that," Kirby said. "And our view is demand is not coming back. People are not going to get back and travel like they did before until there's a vaccine that's been widely distributed and available to a large portion of the population. And I hope that happens sooner, but our guess is that’s the end of next year. And so you just got to survive those losses through that time and be ready to bounce back."

[Sherman A1]

1. I don't see airlines ever returning to the

Pre Covid business. Companies are going to use virtual means to hold meetings as much as possible to save on travel expenses, just as they will have more staff working remotely and the office landscape will diminish.

Neither will completely disappear, but they both will be heavily modified.

[uponit7771]

3. +1, can you imagine a company justifying relocating onsite now? But the airlines continue to be ...

... relatively quiet about Trumps mismanagement of CV19

[uponit7771]

2. Oh WOW !! NOW one of these guys are speaking up, just DAMN ! How long did it take ?! Your damn

... business is getting bent because of the way Trump has acted during CV19 and even ADMITTEDLY lied to the country about aspects of it and you're talking about 25 million a day x 365 + days ?!

SCREAM AT TRUMP !!!

SCREAM LOUD AND OFTEN !!!

[Klaralven]

4. The airlines need to restructure now to be much smaller in the future

The business traveler will never come back to the previous volume, especially internationally, since business has figured out how to use information technology for conferencing and collaboration effectively and much more cheaply.

Without the high-priced business traveler tickets being sold, and because of smaller total volumes, leisure travel tickets will have to cover most of the costs. Thus leisure travel tickets will be a couple times more expensive than previously. The combination of high prices and weakened economy means that leisure travel will be very slow to recover.

So trying to tide the airlines over until traffic resumes is a waste of taxpayer money. The airlines need to cut flights, cut routes, cut destinations and resize their fleets and work forces.

[Dial H For Hero]

10. Not all seats in business (and first) class are filled by business travelers. Many are of them are

purchased by leisure travlers, who will (presumably) be flying just as much in a year or two.

[Klaralven]

11. Whether in first, business or economy, yield management algorithms extract more from business travel

A fair number of first and business class leisure travelers are high status business travelers using upgrades from economy while on vacation.

[Dial H For Hero]

12. Some of them, certainly. Then there are the ones who are points hackers (like myself), gaming the

system to fly first class on Japan Airlines. $10,000 ticket, cost me $70 out of pocket (and 80,000 points).

[Renew Deal]

5. I don't think business travel recovers easily even with a vaccine.

Because workers habits have changed significantly. Everything has been pushed online for 6 months. I’m not sure they will justify new travel so easily. Also, no-travel policies won’t be lifted easily if people are still getting sick.

Airlines need a bailout. I’m not for it for most industries, but they need support.

[honest.abe]

6. Our company does 100% international work.

We dont see international travel happening until next year, and probably mid to late next year. Even then we wont be going back to the same volume as before. We have figured out to do much of our work virtually with online meetings, trainings, collaboration, etc. Its also cheaper so there is incentive to keep doing it this way. I suspect other companies like ours are in similar situation. Airlines are in trouble if they are counting on things going back to normal by next year even with a vaccine.

[Dial H For Hero]

7. As someone who travels in business class internationally 2 to 3 times per year for leisure,

I certainly hope to see things get back to at least semi-normal as quickly as possible. I'm hoping that will be by mid-2021 or so.

[cbdo2007]

8. This is confirming that 90% of business travel is not needed.

Really I have zoom calls with customers every day in cities all across the country, so what is the point of flying out there to sit in a room for an hour when we can do the same thing here from home. Not to mention all the money our company spends on business travel with $100 per person meals, flights hotels. 90% of it has always been a racket or a "perk" to employees who like to travel and get some free trips in, but from a business perspective it really is just a waste of money.

[Initech]

9. I work in an industry that requires travel to sites for site observations.

That part of travel will always exist even long after this nightmare is over. Plus you also have to factor that performers and athletes will need to travel as well. Also, social distancing is not going to last forever.

And you also have to figure that residential internet is not the same as business and industrial internet. Until the residential internet providers catch up with commercial, there's absolutely no way that the stay at home model can be sustainable in the long run.