People are flying more than in the spring, but air travel is down 65% from a year before

The coronavirus pandemic has hit the air travel industry hard. The number of monthly passengers on US-based airlines dropped 96% from 67.8 million in February to 3 million in April according to data from the Bureau of Transportation Statistics (BTS). Though that number has rebounded somewhat, September passenger levels were still down by 65% compared to September 2019, according to preliminary BTS data. As the nation grapples with a record number of coronavirus infections heading into the holiday season, the industry faces another period of uncertainty.

Government data shows the industry has partially recovered from the early days of the pandemic but remains behind previous years.

Airlines face a financial situation worse than post-9/11

US airlines experienced a net loss of $14.9 billion during the first six months of 2020, according to the BTS. Airlines made an $8 billion profit during the same period in 2019. To put the loss in perspective, in the six months following the September 11, 2001, attacks, airlines lost $10.3 billion (adjusted for inflation).

Airlines experienced worse financial quarters in the fourth quarter of 2005 (a net loss of $26.9 billion) and the first quarter of 2008 (a net loss of $13.9 billion). Based on filings with the Securities and Exchange Commission, airlines attributed much of these losses to reorganizations due to bankruptcy as well as mergers.

Airlines and businesses supporting airlines have received over $50 billion in grants and loans since the pandemic began, primarily through the CARES Act, which provided passenger airlines with $25 billion to cover payroll costs. Companies that received CARES Act funds were barred from layoffs, pay reductions, or furloughs until September 30.

Even with the aid, airline employment fell — at least in part due to voluntary leaves. In a March 15 count, before the CARES Act was passed, scheduled passenger airlines employed 461,597 people full-time. By September 2020, that figure was down to 404,689 — a 12.3% reduction in the workforce. Post-CARES Act data from October is expected to be released in December.

Both United and American Airlines have said that they’ll be forced to cut jobs if further aid doesn’t arrive. Meanwhile, Delta and Southwest Airlines have both raised funding through private capital markets in efforts to prevent layoffs.

Declines in plane ridership and flight volume

Airlines’ financial woes stem from a sharp decline in plane travel this year. Total US airline passenger volume, regardless of airline, was down 65% to 25.1 million in September 2020 from 71.5 million in September 2019.

All major carriers have seen declines in passengers for the 12-month period ending in August 2020:

• Alaska Airlines reported a -41.6% change
• Delta Airlines reported a -40.5% change
• JetBlue reported a -42.8% change
• United Airlines reported a -44.4% change
• Southwest Airlines reported a -37.8% change

Airlines also reduced the volume of flights in response to reduced demand. Among US-based carriers, the number of domestic and international flights dropped to 219,241. That’s 74.2% lower than the 815,270 flights in May 2019. The 451,892 flights that occurred in August is 47% lower than the 848,650 flights in August 2019.