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US airlines' demand stalls just as payroll support ends

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Demand for air travel in the US continues to remain stalled, which is creating a state of limbo for most of the country’s airlines as they work to determine their optimal size for a prolonged period of uncertainty. A widespread vaccine appears to be the only catalyst for the start of a full recovery. 

With little movement in demand, and stalled efforts in the US Congress to craft legislation that includes an extension of payroll support funding, US airlines are bracing for involuntary furloughs on 1-Oct-2020. Operators are working with labour groups to reach agreements in order to avoid lay-offs, but as demand remains stagnant, airlines will ultimately become overstaffed.

The country’s airlines are also continuing the face the grim reality that revenues will be pressured for the foreseeable future, and that weakness could force airlines to extend their targets of achieving break-even cash burn.

All of those factors are coalescing to create a tough autumn for US operators that have already endured the toughest six-month stint in modern aviation history.

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