Posts Tagged ‘airlines’

COVID-19 Transportation Aid Levels Proposed

February 9, 2021

Democrats in the House of Representatives have reportedly settled on funding levels for transportation that would be included in a proposed $1.9 trillion COVID-19 relief bill.

Under the proposal, transit agencies would receive $30 billion, Amtrak would get $1.5 billion, airlines would receive $14 billion and airports would get $8 billion.

The COVID-19 aid funding for transit falls short of the $39.3 billion that transit systems were seeking.

Amtrak funding would nearly match the $1.541 billion that the intercity passenger carrier is seeking from Congress.

However, it exceeds the $20 million that President Joseph Biden had proposed.

Biden’s initial proposal contained no funding for Amtrak or airlines.

A House committee is expected to begin working this week on the COVID-19 pandemic aid proposal.

House Pandemic Bill Has Amtrak, Transit Funding

September 30, 2020

A bill unveiled this week by Democrats in the U.S. House of Representatives this week contains emergency air for public transit, Amtrak and the airlines.

Although the bill, named the Heroes Act, is expected to get a vote this week, some political observers don’t expect the Senate to vote on it. Instead the Senate might consider its own COVID-19 relief bill.

The House bill contains $2.2 trillion in emergency spending, including $2.4 billion for Amtrak.

Amtrak would receive $1.4 billion for the Northeast Corridor and $1 billion for the national network.

The bill allocates $569 million to help states and commuter rail providers pay Amtrak for state-supported route and commuter rail use of Amtrak’s Northeast Corridor.

Public transit would receive $32 billion, which includes $28.5 billion for operating assistance grants.

The American Public Transportation Association said in a statement that under the terms of the House bill the funding for public transit is to be directed to payroll and transit operations.

APTA said the funding, if approved by Congress and President Trump, would when combined with earlier approved CARES Act aid equal 100 percent of agencies’ operating expenses.

Also allocated by the bill is $2.5 billion for Capital Investment Grants for transit project sponsors with non-federal financial commitments and $10 billion for emergency relief grants for public transit agencies that require additional assistance to maintain operations.

The bill also contains $25 billion for airlines to save jobs through next March.

Airlines have been grabbing headlines in the past couple months by announcing massive layoffs and service cancellations once their CARES Act funding expires today (Sept. 30).

The House bill would extend $3 billion in payroll support for airline contractors as originally approved in March and $300 million to cargo airlines.

It also includes $13.5 billion in economic relief to airports and $75 million to preserve passenger air service for smaller communities.

An earlier House approved COVID-19 emergency aid bill failed to get a Senate vote and talks between the two chambers have broken down over partisan differences, including over the size of another relief bill and who would receive funding.

The latest House emergency relief bill is $1 trillion less than the earlier proposal approved last May.

There is some support among Senate Republicans who control that chamber for granting emergency aid to the airline industry, which in recent days has ramped up its lobbying campaign for more emergency funding as air travel remains in a severe slump.

A Senate bill introduced last week would provide $25.5 billion for passenger air carriers, $300 million for cargo air carriers and $3 billion for contractors.

Political observers have noted that airline aid has gained traction because many lawmakers of both parties and key administration officials fear that the layoffs airlines have signaled will occur in October could rattle an economy that remains in the doldrums.

Most Airlines Agree to Emergency Aid Terms

April 15, 2020

The federal government has reached an agreement in principle with 10 airlines over terms of the federal emergency aid that they will receive.

A report by Aviation Daily said he carriers will receive a combination of grants and loans as part of the $25 billion allocated to them by the Coronavirus Aid, Recovery, and Economic Security Act.

The airlines had wanted all of the funding to come in the form of grants that they would use to pay employees through spring and summer.

However, 30 percent of the aid will be low-interest loans with 70 percent of the funds being grants.

The agreement also said the U.S. Department of Treasury will receive warrants equal to 10 percent of the amount of the loan, which the agency can later convert into shares at a pre-determined price should it desires.

Airlines agreeing to participate in the program include Alaska Airlines, Allegiant Air, American Airlines, Delta Air Lines, Frontier Airlines, Hawaiian Airlines, JetBlue Airways, SkyWest Airlines, Southwest Airlines and United Airlines.

Spirit Airlines said it continues to negotiate with the government over terms of its application for emergency aid but expects to reach an agreement soon.

Treasury Secretary Steven Mnuchin said talks with other airlines are still ongoing, particularly smaller carriers.

The CARES Act requires that airlines accepting financial assistance cannot cut positions through layoffs or furloughs, but can reduce staff through voluntary incentives such as early-retirement or paid leave packages.

Airlines also are prohibited from repurchasing stock or issuing dividends through September 30. They must agree to certain limits on executive pay until March 24, 2022.

The carriers are required to provide minimum levels of service to all points in their pre-pandemic networks to the extent “reasonable or practicable.”

However, some airlines, including Alaska, Allegiant and United have sought waiver requests for exemptions to cease flying to certain points, citing weak demand due to the COVID-19 pandemic.

Flying Like its 1954

April 14, 2020

Air travel numbers have dropped to the levels of the early 1950s.

On April 8 the Transportation Security Administration said it screened 94,931 people at U.S. airports, the second consecutive day that the number of those screened fell below 100,000.

Air travel statistics show that the last time the U.S. averaged fewer than 100,000 air passengers per day was in 1954.

Airline industry observers say the number of passengers flying may be smaller than TSA numbers indicate because those figures include airline crew members and some employees of airport shops and restaurants located beyond the checkpoints.

The decline in TSA screenings was 96 percent less than it was on April 8, 2019.

TSA said that on March 1 this year it screened nearly 2.3 million passengers at U.S. airport.

The plunge in passengers began in the second week of March and has only shown signs of slowing in recent days, perhaps because it has just about hit its floor.

Back in 1954 the only commercial jetliner was the British-built de Havilland Comet and it had only been flying commercially for two years.

The Boeing 707 was still in development and would not make its first flight until 1957 and enter commercial service on Oct. 26, 1958.

Industry trade group Airlines for America said airline capacity has been slashed by 71 percent although some reports have placed the figure at 90 percent.

Anecdotal reports have surfaced in the news media that some flights have operated with just one passenger aboard.

The trade group said on average only one in every 10 seats on domestic flights is occupied.

Flight cancellations have been widespread in the past four weeks.

U.S. Airlines have reported taking out of service 1,800 planes or about 30 percent of the airline fleet.

Amid the COVID-19 pandemic, TSA workers are now wearing masks and in some instances face shields.

TSA said 327 of its employees have tested positive for the virus. The union representing flight attendants at American Airlines said 100 of its members have tested positive.

Industry observers expect demand for air travel to grow slowly once the pandemic subsides.

Airline traffic took a major hit following the Sept. 11, 2001, terrorist attacks on New York and Washington and air travel once restored didn’t begin to grow until 2003.

Some believe air travel will grow even slower following the COVID-19 pandemic.

The Associated Press reported that Polling firm Public Opinion Strategies found fewer than half the Americans it surveyed about 10 days ago say they will get on a plane within six months of the spread of the virus flattening.

The firm Stifel Nicolaus projects that in a best case scenario air travel demand won’t return to pre-pandemic numbers until the middle of 2021.

Those traveling tend to be health care professionals on their way to pandemic hot spots and a few traveling to be with family.

United Airlines reported it is losing $100 million a day while Delta Air Lines put its losses at $60 million a day.

U.S. carriers are expected to accept federal emergency grants to cover their payrolls through September.

The industry expects carriers to be smaller in the post pandemic era.

How quickly air travel recovers will hinge upon a number of factors including social distancing rules and how quickly those thrown out of work during the pandemic are able to resume their jobs or find new employment.

Anderson Repeats Familiar Themes at Conference

September 20, 2019

Amtrak President Richard Anderson made a rare public appearance this week but didn’t say much that he hasn’t’ said before in appearance before Congress and in interviews with select media outlets.

Richard Anderson

Speaking to the Skift Global 2019 Travel Industry Conference, Anderson reiterated that Amtrak wants to emphasize service in corridors that airlines have all but abandoned.

Anderson also contended that Amtrak will break even in the next 12 months.

Amtrak needs to garner a greater share of the travel market in short-haul markets, Anderson said, naming Chicago-Milwaukee as one example.

Such markets are unprofitable for airlines said Anderson, who worked for 25 years in the airline industry including stints as CEO of Delta Air Lines and Northwest Airlines.

Amtrak expects to increase its share of short-haul travel markets as millennials expand urban centers.

“As these urban corridors densify, and all the millennials move to cities and don’t own cars, we gradually take over more and more of the market share from airlines,” Anderson said. “By 2050, there’s not going to be a choice unless you want to sit in long car delays because you can’t put more lanes on I-95.”

Anderson said rail travel accounts for 75 percent of the air/rail travel market between Washington and New York.

Already, Anderson said, 95 percent of Amtrak’s ridership travel about 250 miles.

As for long-distance trains, Anderson continued to describe them as “experiential.”

He said Amtrak may in the future operate between five to 10 such experiential trains that will be similar in nature to VIA Rail Canada’s Canadian, which operates on a less than daily schedule between Toronto and Vancouver, British Columbia.

Although some supporters of long-distance trains have cited their role in linking small communities, Anderson described that as a political concern and said the “$150 per passenger subsidy” per passengers of such trains as the Empire Builder is contrary to Amtrak’s current business model.

During his appearance Anderson also said compliance with the standards of the Americans with Disabilities Act is essential for passenger growth.

He said the design of the next-generation Acela Express equipment will have doorways that will help mobility-challenged travelers get from car to car.

Anderson continued to push for Amtrak receiving a greater share of transportation funding in order to meet its infrastructure needs.

Those needs include replacing the Portal Bridge on the Northeast Corridor in New Jersey and improving tunnels in New York and Baltimore on the NEC.

Noting that its Thruway bus network generates $100 million in revenue, Anderson said it will continue to play an important role in bringing underserved parts of the country with no train service into the Amtrak network.

Anderson said a yield management system has ensured more diverse fares and promotions to increase fare revenues.

Don’t look for Amtrak to be selling tickets anytime soon on online travel agencies.

Anderson said the struggles of the hotel sector in doing that offers a cautionary tale of what he doesn’t want Amtrak to do.

“We don’t need those distribution channels unless they make sense for us economically,” Anderson said. “We control 85 percent of our distribution, and we want to control that. The hotels gave their brands up, and now they want to claw them back, because you’re not controlling the brand and its display in the marketplace.”

Anderson also sees what is happening overseas with rail travel as a blueprint for Amtrak.

“If you think about how intercity travel works in Europe or Japan, we’ll have to evolve to meet that model,” he said. “The densification in urban areas is going to dictate that Amtrak play an important road in short-haul transportation.”

Ohio Lawmakers Propose Airports, Rail Service

June 5, 2017

Two Ohio lawmakers have proposed building new airports in the state, one to serve southwest Ohio and the other to serve Northeast Ohio.

The airports are being promoted by Rep. Paul Zeltwanger (R-Mason) and Rep. Jim Butler (R-Oakwood), who say they will attract international travel.

They also have included rail service in the broad outlines of their proposal, the details of which have yet to be written.

The representatives expect the projects to require a $10 to $15 billion investment from the federal government and businesses, such as airlines that serve Cincinnati, Dayton, Columbus, Cleveland and Youngstown.

Rep. Butler cited the proposed infrastructure investment plan being formulated by the Trump administration. The rail system would connect cities to the two airports.

The idea won a preliminary endorsement from the National Association of Railroad Passengers.

“The idea behind the airports, and connecting each to various cities by rail, is fantastic,” said NARP President Jim Mathews. “This highlights how people can use rail and air transportation together to travel; it doesn’t have to be one or the other.”