Coronavirus-hit airlines in push for divisive route subsidies

[Eugene]

Source: Reuters

BUSINESS NEWS APRIL 10, 2020 / 9:53 AM / UPDATED 2 HOURS AGO

Coronavirus-hit airlines in push for divisive route subsidies

Laurence Frost
4 MIN READ

PARIS (Reuters) - Major airlines are seeking operating subsidies for key routes once coronavirus restrictions are lifted, a leaked lobbying document shows, stoking tensions with some low-cost carriers that are less likely to benefit from the additional funds.

Route subsidies feature on a list of financial support requests circulated among airline members of the International Air Transport Association (IATA) and seen by Reuters.

“Airlines will need support to maintain their networks, which play a critical role in driving the world’s economy,” Geneva-based IATA states in the 12-page digest of “key messages” for airline public affairs executives to take to governments.

The support can be offered “either through a rebate on landing charges per flight or via a direct subsidy per available seat kilometre until markets have been stabilised”, it adds.

IATA spokesman Chris Goater confirmed the authenticity of the document, which was first reported by Unearthed, an environmental news service funded by campaign group Greenpeace. “It’s a private document for our members,” Goater said.

-snip-

Read more: https://www.reuters.com/article/us-health-coronavirus-airlines-subsidies/coronavirus-hit-airlines-in-push-for-divisive-route-subsidies-idUSKCN21S1FC

[mn9driver]

1. Prior to deregulation, route subsidies were common.

They still exist in some smaller markets, usually paid by state governments.

There was a time when regulated airlines could fly half full on most routes and still break even. That time is gone. Today’s deregulated airlines have huge fleets of aircraft that are designed to fly full on very large route structures. These aircraft will not be flying anywhere near full for a very long time.

Current industry estimates predict that passenger traffic will not recover for at least several years. If the free market is allowed to play this out, there will be very few airlines left. Maybe two in the US, certainly no more than that in most countries. Several US regionals have already shut down for good, and we are only 6 weeks into this. There will be a lot more.

The US and global airline industry is going to look very different when this is over: Fewer airlines, the remaining ones much smaller, less service, fewer destinations. Not a good time to be in the business.

[customerserviceguy]

2. Maybe

we don't need that much air travel. It's polluting, it has become an extreme hassle, and hopefully, businesses have figured out that they don't need to put highly-paid people into tin cans and fling them around the country to get things done.