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US Airlines Lost Estimated $35 Billion in 2020

US Airlines Lost Estimated $35 Billion in 2020
(Jeff Chiu/AP)

By    |   Friday, 01 January 2021 08:06 PM

A decade of profits for U.S. airlines ended dramatically due to the COVID-19 pandemic.

The airlines likely lost more than $35 million in 2020, according to analyst estimates provided by FactSet per CNBC on Friday. That included Southwest Airlines suffering its first annual loss in more than 40 years.

Significant relief for the industry is not expected before the second half of this year.

The pandemic, which forced carriers to lay off employees, cut routes and park hundreds of jets, was the biggest reason U.S. airlines increased their debt total by $67 billion to more than $172 billion, according to trade group Airlines for America.

Air carriers won $15 billion in additional payroll support via the coronavirus relief package signed by President Donald Trump on Sunday. The deal requires airlines to keep employees on staff through March 31 and to call back more than 30,000 workers furloughed when the terms of the CARES Act, which was $25 billion, expired on Oct. 1.

In the decade before 2020, the U.S. airlines hired tens of thousands of workers, bought new planes and expanded their networks.

All someone had to do to see the decline in profits was to look at the stock market. Although the S&P 500 rose by more than 16 percent overall last year, airlines were not as fortunate.

American Airlines, with a 45 percent share price loss, suffered its biggest percentage decline since before merging with US Airways in 2013.

Other airlines to experience large drops in share prices included Delta Air Lines (-31 percent), United Airlines (-51 percent) and Southwest (-14 percent). United saw its biggest drop since 2008. 

Airlines are expected to trim their losses, with some carriers — i.e., Southwest, Delta, Alaska — turning profitable next year, according to analysts' estimates. 

"Our mission of connecting the world has been reaffirmed by the events of the past year, but we don't yet know what travel demand is going to look like when it rebounds," Delta CEO Ed Bastian said in a New Year's Day note to employees. "Simply re-creating the Delta from 2019 won't be an option; our customers will give us the blueprint for the Delta of 2021 and beyond."

An optimistic sign for the industry was holiday travel the past six or so weeks. The Transportation Security Administration airport screenings surpassed 1 million people daily from Dec. 26-30, though the numbers represented a 45 percent decrease compared to 2019.

Eight months earlier, on April 16, the TSA screened 95,085 people at U.S. airports — less than 4 percent of the 2.6 million people who passed through checkpoints a year earlier.

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A decade of profits for U.S. airlines ended dramatically due to the COVID-19 pandemic. The airlines likely lost more than $35 million in 2020, according to analyst estimates provided by FactSet per CNBC on Friday. That included Southwest Airlines suffering its first annual...
pandemic, air, travel, airlines, covid
432
2021-06-01
Friday, 01 January 2021 08:06 PM
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