No V-Shaped Recovery for Airlines. Ticket Sales Slide Again. United Announces 36,000 “Involuntary Furloughs”

“Increase in Covid-19 cases negatively impacting industry demand”: United

By Wolf Richter for WOLF STREET.

With Covid-19 cases surging in the US and in other countries, airline industry ticket sales for both domestic and international flights are declining again, as demand has turned south, according to a presentation to employees by United Airlines, filed with the SEC on July 7.

UA’s presentation included the two charts below of new ticket sales for future travel, by “all carriers and sales channels,” based on data by Direct Data Solutions (DDS) through July 2. They show the percentage decline in industry-wide ticket sales for domestic and international travel from the same period last year (in a 7-day moving average). The charts are titled, “Increase in Covid-19 cases negatively impacting industry demand”:

The first chart shows the decline in ticket sales for domestic flights, in terms of the number of passengers (blue line) and dollar revenues by the industry (purple line):

This second chart shows the decline in international ticket sales in terms of the number of passengers:

So that’s the end of any pretense of a “V-shaped” recovery of ticket sales. And it’s likely that not just airlines are impacted by this resurgence in Covid-19 cases. But airlines are already teetering on the edge.

Today, United Airlines announced that 36,000 employees in the US, or 45% of its US workforce, could face “involuntary furloughs” on or after October 1. That’s the day after the restrictions attached to the $25 billion in payroll aid under the CARES act expire.

United’s memo of the layoffs went out to employees in order to comply with a federal law that requires employers to give employees at least 60 days’ prior warning before mass layoffs, the so-called WARN notices.

The “involuntary furloughs” would include up to 15,000 flight attendants, 11,000 customer service and gate agents, 5,500 maintenance workers, and 2,250 pilots. Another 1,300 management and support staff will be laid off on October 1, the company said.

“The reality is that United simply cannot continue at our current payroll level past October 1 in an environment where travel demand is so depressed. And involuntary furloughs come as a last resort, after months of company-wide cost-cutting and capital-raising,” the company said.

Delta Airlines told pilots in late June that it would send WARN notices to 2,558 pilots, or nearly 20% of its pilots, notifying them of potential furloughs. Last week, Delta said that it may cut the number of flights it had scheduled for August due to lack of demand. A month ago, Delta issued the mother or all revenue warnings.

All airlines have been trying to cut their workforce with voluntary measures and have been offering severance packages and early retirement packages to nudge employees out the door without having to lay them off. Over the next few weeks, as the 60-day period before October 1 approaches, more airlines will follow United in announcing mass layoffs.

The drama of the dropping ticket sales due to the Covid-19 resurgence is not yet reflected in the TSA’s checkpoint screenings at US airports – a measure of how many people are getting on a plane. They were still down 74.4% yesterday, compared to the same weekday last year. They have risen since the low point in April, but at a painfully slow pace.

The TSA checkpoint screenings are a lagging indicator. These people bought their tickets often weeks or months ago. The declining ticket purchases in recent days will be reflected in future TSA screenings:

Four months into the crisis, airlines are still only flying a quarter of the passengers that they flew last year at this time, and they’re having trouble hanging on.

United told reporters today that despite the radical cost cuts and capacity reductions, it is still burning $40 million per day. That’s $1.2 billion a month, month after month. And it said that it could not count on further government support to cover payroll costs from October 1 forward. The company said that 26,000 employees had already taken part in the voluntary severance programs so far this year.

The V-shaped recovery of airline stocks is also funny looking. The WOLF STREET airline index of the seven largest US airlines – Alaska, American, Delta, JetBlue, Southwest, Spirit, and United – remains in dismal territory, down 49% from the Good Times in mid-January 2020, and down 60% from the Better Times in January 2018 (market cap data via YCharts):

The market cap of all seven airlines has plunged since mid-January, but with different nuances, as of the close today:

  • United: -59%
  • Delta: -57%
  • American: -50%
  • Spirit: -50%
  • JetBlue: -48%
  • Alaska: -46%
  • Southwest: -35%.

It’s going to be a long tough slog for passenger traffic to recover. In addition to the issues related to the Pandemic, there is now a structural issue: Business travelers, the most profitable segment for airlines, may not fully recover in a very long time because companies have now discovered that video conferencing and video chats can effectively replace many trips. Sure, there will be some business travel after the Pandemic disappears as an issue, but a lot less than there was before. This is a huge savings in time and money for companies. But it’s a deep long-term hole for airlines.

A dozen major clothing brands and thousands of stores are at stake, after years of struggling, while work-from-home is annihilating casual and formal office attire. Read… Pandemic Compresses Brick & Mortar Meltdown: Brooks Brothers Files for Bankruptcy, Ascena (Ann Taylor, etc.) Prepares to File, Tailored Brands (Men’s Wearhouse, etc.) Not Far Behind

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  179 comments for “No V-Shaped Recovery for Airlines. Ticket Sales Slide Again. United Announces 36,000 “Involuntary Furloughs”

  1. DR DOOM says:

    I had to stare at that number for a while to make sure I was not having some type of “episode”. Sickening.

    • WES says:

      Dr. Doom:

      I was going to say these graphs look better viewed upside down!

      I then turned my tablet upside down to view the graphs upside down, but the tablet just turned the graphs right side up!

      Your right! The graphs are just plain horrible!

      • polecat says:

        It’s like an updated version of ‘The Mask of the Red Death’… Corpserate style.

    • 2banana says:

      I would add the airlines are not really trying.

      I have been looking to travel overseas this summer. Very flexible with dates and locations.

      Tickets prices are from expensive to outrageous.

      No real attempt to fill those seats.

      Hotels, on the other hand, are affordable to cheap.

  2. MonkeyBusiness says:

    Dow 100K
    S&P 10K
    Nasdaq 30K

    Markets love these things.

    • Phoenix_Ikki says:

      Sounds like another opportunity for those Warren Buffett beating genius “investors” to buy the dip again soon. Robin Hooders to the rescue and maybe Ackerman will join in on the action. If all else fail, FED will bail out the airline again so no risk there. Airlines are too big to fail right?

      • Old-School says:

        Read Buffet’s annual report again last night. He knows how to do capitalism. Revenues up 9% annually in 10 years, stock up 8.5% with PE around 15 after counting look through earnings. Not a bad entry point if you have a few years. Smart to ditch airlines once virus hit.

        • MonkeyBusiness says:

          His businesses would have collapsed without government bailout back in 2008/2009.

          You can’t be big and not get affected.

      • DeerInHeadlights says:

        Yep. He didn’t realize how bad Covid was early on but when he did, his decision to dump airlines was the right one. There’s no recovery anytime soon for travel-related industries.

    • M says:

      Sooner or later, reality will be perceived by most investors, aside from the bankster and their “Fed,” which are just manipulating the market. I would say that this is an excellent time to unload airline stocks, which are not likely to be profitable given the 232 scientists saying that it is airborne.

      I sure do not plan to get into a bus or subway car or airplane any time soon. Even enclosed buildings and elevators are dangerous apparently. Even if more survive, a $1.1 million dollar hospital bill would hurt.

  3. Concerned American says:

    Why is anyone surprised by this? The hospitality sector is screwed for the foreseeable future. Hotels, cruise line and car rental companies are not recovering any time soon. Any bailouts at this point are just throwing out good money. As painful as it may be let them declare chapter11 and have the shareholders and bond holders feel the pain. Taxpayers did not benefit from the massive stock buybacks over the past few years. They should not be left to pick up the tab now.

    • CZ says:

      Tough but fair.

      I’m thinking any bailouts should be in the form of direct transfers to individuals; at least that pays some bills and puts the money into the economy. I feel like the bulk of corporate bailouts wind up in executives’ pockets… maybe some trickles into the yachting industry.

      • Tim SE says:

        All forms of support help sustain demand – but they cannot do anything to rescue supply.

        That sounds hugely inflationary.

    • EJ says:

      I think airlines will be even worse off than hospitality industry as a whole. You can do business remotely, but you can’t Zoom a trip to Hawaii… and cargo doesn’t fly business class.

  4. MCH says:

    Business travel is going to be in the dumps for a while. Cause why pay an extra $20k to $50k a year on travel costs if there is no need. Reduction of expenditure is a always a good thing.

    I would be curious to see a break out by airlines of business vs leisure travel. That could give a good forecast of future demand. I am going to guess that Apple’s daily block of United business tickets from SF to Shanghai might be chopped… mainly because United isn’t flying that route right now…. I think

    • MC01 says:

      As fate is not without a sense of irony, United Airlines restarted the San Francisco-Shanghai service yesterday precisely because Silicon Valley and their Chinese vendors demanded it. ;-)

      • MCH says:

        Makes you wonder if there are special documentation available to the right business travelers so that you don’t have to go through mandatory quarantine period in China. I wonder how many larger US businesses like Apple would endure this, would make no sense if they had to send an employee to China, and then for them to be stuck for 14 days in a hotel while business gets delayed. I would suspect there would be pressure on both sides for business traveler to be able to move “freely.”

      • Rcohn says:

        Students on student visas in the US will have to go back to China assuming the ICE actions hold up in court

        • MCH says:

          The policy our government has are really silly and hamfisted. I think the main problem is the assumption that these policies are supposed to be fine tuned like a scalpel, but it assumes the people carrying it out aren’t set on some screwy agenda and there aren’t quotas or some such thing. It also assumes thoughtfulness in action, but in reality, the scalpel gets wielded like a sledge hammer.

          It is a virtual certainty that the current policy will create another Qian Sanqiang, and the cost to the country will end up being incalculable. Witness the current efforts to curtail scientists and researchers of Chinese origin and their work using government funding, it is literally insane.

    • Old-School says:

      Does anyone think that we need to pick a date and let the market work for resetting the economy? Seems like the economy needs to change after the virus. Doesn’t bailing out everyone for a long time just ensure the required changes aren’t going to happen? Maybe we had too many restraunts, malls and we’re flying around too much? Maybe we had too much bricks and mortar on college campuses? Who knows? How are we going to decide what deserves funding?

      • MCH says:

        Those are tough questions….

        Nobody in power would want to be pinned down to a date, because they wouldn’t want the blame if things went wrong. Also, since the Federal government doesn’t control how the states work, there would be no even patches in terms of reopening, and resetting.

        As for the rest, it’s a matter of picking winners and losers. Governments do that all the time anyway, just look at the rise of Amazon and the destruction of brick and mortar, that literally came from states not taxing internet transaction until a decade ago.

        The economy needs to change, but the only real way to ensure that change would be relatively difficult. No bailouts? Doesn’t seem plausible. A uniform and coherent policy around reopening? Even less likely given the fractured nature of government today.

        As far as how to decide who gets funding…. I have a quarter for you. It would be at least a fair way to make a decision.

      • char says:

        Nobody in power believes in market economy. It is for the heavily propagandize average joe

  5. Suzie Alcatrez says:

    I think Americans will need to get used to not being allowed to travel internationally.

    • MonkeyBusiness says:

      There’s an article in the Guardian today about Mexico refusing to allow Americans from going into the country.

      I am kinda worried about possible social upheaval though from now till the Presidential Election.

      • EJ says:

        Ahh, that partially explains why the president of Mexico is being so friendly.

      • BuySome says:

        Ha! Thank God, finally. We’re the international community. Let’s just tear down the useless CRE and replicate “old town” architecture everywhere. Take those vacations right in country. We already have Mexicans that can set up businesses ( and the same for every other group from somewhere) just like home. Let’s make new loans. Heck, The southwest was an extension of Mexico before arbitrary borders. Are we Americans or are we Americant’s? Someone call the good folks at Disney.

      • KGC says:

        I hope that works just as well for them as the USA policy of not allowing illegal movement north across the boarder has done.

        I do wonder if they will allow non-American citizens southward passage?

      • whatplanet? says:

        Regardless of the outcome, why would the presidential election change that?

    • KGC says:

      The EU is expecting internal travel to save their tourism industry. I doubt that will work, because, in my opinion, those are the most frugal travelers. I see that happening here in the USA also. Vacations are going to be much more local, with travel by car, like it was 40+ years ago.

      I am the only person in my extended family to have ever traveled internationally for business and pleasure, and the only one to have done so more than twice (I’ve made dozens of trips overseas). Even among those friends and family who could do so, none are making plans now. Even Hawaii is off the radar. It’s going to take a decade to get that mind set back, and personally I think that the coming changes are going to make those who missed the past two decades of cheap travel totally write off spending anything like what the costs are going to be.

      Likewise, the days of being on the road are going to get cut short. That’s a lot of business practices that are going to be forced to change, from sales reps to junkets, smart companies are going to figure out alternatives. I see a lot of jobs getting much more local (and lower paying).

      • MC01 says:

        That is not true: the Greek islands, Sardinia or Costa Azahar depend on internal EU tourism, chiefly from Northern Europe. They have always depended on it. Right now they are fighting among themselves for those tourists and the big losers seem to be Portugal and Spain.
        Even in the same country there are winners and losers: for example German tourists are now favoring the Venetian side of the Lake of Garda over the Lombard lakes because there’s no facemask mandate and there are far fewer restrictions there.

        Next week the big exotic meccas will start re-opening to tourists: Maldives, French Polynesia… the big Red Sea resorts in Egypt should re-open in August and Bali will re-open in September. I doubt they will see much traffic but it beats laying there and starving.
        But the problem is there is still much uncertainty: governments are not working with each other to decide on clear rules for international travel.
        To make thing worse there are all sorts of backdoors to international travel that are creating animosity: to give a very recent example it was discovered Aeroflot “cargo only” flights have been carrying passengers for weeks now despite the travel ban imposed by the Kremlin. Turns out there’s a very little advertised agreement between Russia and the EU allowing dual citizens and holders of valid residency permits to travel between the two with no other restriction than flight availability. As Joe Strummer sang “Rules are not for you, they are for the fools”.

        • char says:

          Does Lombard want those tourists? Officially yes but unofficially its not a bug but a feature.

          Is Egypt on the list of places you can travel to? Opening while nobody can come is useless and counter productive. And it is not like the European tourists can’t go to Greece. Not that the EU would ever think about that. /s

        • Xabier says:

          The Lure of the South is, understandably, very strong for Northern Europeans.

          The father of an Austrian friend spent the last years of WW2 retreating through Italy, after just avoiding Stalingrad, and so fell in love with it that he returned almost every year thereafter until he died.

          How else could we bear the 7-month long winters?

        • MC01 says:

          I live here: everybody is desperate for tourists, from the politicians in Milan to shopowners near the lakes. But they have stiff competition: this morning our local newspaper had a nice large advertisement for tourism in Emilia-Romagna (Misano, Riccione etc) and yesterday there was another promoting the Dodecanese.

          Travel restrictions between the EU and Egypt have already been somewhat eased (I should be overflown by an Air Arabia flight in a couple of hours) and should be mostly if not completely dropped on August 1. But since “rules are not for you, they are for the fools” Swiss leisure airline Edelweiss (owned by Lufthansa) has already restarted daily flights from Zürich to Marsa Alam and Hurghada. I have just checked the website of a well known Italian travel agency (the things I do for you folks!) and they offer travel packages starting in late August, probably the time it will take for resorts to get back in business and airlines to get aircraft out of storage.
          Of course it remains to be seen how many will take up the offer but at those rock bottom prices I am sure a few folks will bite.

        • MCH says:

          The rock bottom prices will pay off for those who do bite. I would guess the crowd would be younger and less susceptible to C19 anyway.

          It’s a small lifeline to businesses, but better than nothing at all.

        • char says:


          Egypt has always rock bottom prices. But what if Greece or Aruba has also rock bottom prices, and they will. Would you really go to Egypt? Especially when health insurance is not a problem in the EU but is for Egypt


          It ihas for the last week been below 20 degrees and rain, rain, rain. The Lure of the South is now particular strong

      • char says:

        Internal travel is opened for industry, not tourism. But selling it for tourism is much easier.

      • polecat says:

        Gonna do a startup … Gonna call it “Murican Rickshaw” ..’See the new tawdry sites – within a 5 mile radius!’

    • WES says:


      Not just Americans, but Canadians too!

      US/Canada border is basically closed to non essential travel.

      • Mike G says:

        They’re letting Americans in only if traveling through to Alaska, and they need to be transiting only. A group were busted and heavily fined when they were caught touring Banff National Park.

      • Paulo says:


        I listened to a Canadian epidemiologist yesterday who said he did not think the border will reopen until after a vaccine is implemented due to the US losing control over infection rates. Of course, that presupposes anti-vaxers are sidelined. Furthermore, well over 80% of Canadians are demanding the border stay closed. In BC there is unbelievable scrutiny of license plates and harassment of drivers sporting US plates, so much so that Cdn citizens who just happen to be driving a US tagged car (for whatever reason) are forced to put signs in their windows proclaiming “I Live Here”, etc. There is talk about checkpoints after border crossings, and checkpoints in Whitehorse YT as Americans are not allowed to leave the Alaska Hwy for any reason beyond gas and food at hwy stops.

      • td says:

        Canada has historically had a travel deficit with the US so this trend will be good for the balance of payments. The primary driver for much of the travel south has always been sun and sand, especially in winter with many older people vacationing for months in Florida and Arizona. Now those states are ground zero for a major outbreak and those very same older folks are the main targets for bad outcomes.

        I think that a significant amount of vacation-oriented real estate is going to end up on the market if this drags on. With new cases in Canada only running at a few hundred per day, there will be a real trend to spend locally.

        • Clete says:

          td: This will absolutely crush southwest Florida (from just south of Tampa all the way down). A huge number of our snowbirds are Canuckistanis, and if they don’t (can’t?) come down this year, things will be even tougher than they are right now (the generally accepted “slow” season). Houses and condos will be cheap, and rentals will be plentiful.

      • Escierto says:

        The US-Canada border is going to stay closed the rest of the year and probably a lot longer than that – maybe all next year. Of course as a dual citizen I can go but quarantine for two weeks is not something I want to deal with.

    • Rcohn says:

      Airplane travel will never get back to previous levels for five reasons
      1.Some business travel will be replaced by computer teleconferencing.
      2.People will retain the memory of Covid-19 for a protracted period of time.
      3. A significant % of hotels and Airbus will not be reopened.
      4. The conflict between the US and China will only escalate in the coming years
      5. Fewer discount tickets will be available.

      • polecat says:

        US and China ..

        I hear tell that if things persistant continue, that Big Radiation ‘treatments’ will be in our future. I suspect that those treatments will be rather random in ‘application’, however ..

  6. nick kelly says:

    But Boeing is on a rip based on 737 re-certification.
    Wow. We have planes, now just need passengers.
    What use are the 737’s? Who is going to order planes?

    Back of the envelope thought: If there are 100 million autos in the US, and the average value has fallen by just a grand, that’s one hundred billion dollars. Maybe to preserve the wealth effect, the Fed should buy the Hertz fleet. ( this was intended as sarcasm, then thought ‘hmm’. The gov can make more use of cars than junk bonds.)

    A lot of people wonder: where does this end? We have a few repeating the mantra: ‘US dollar hegemony’, apparently unaware that in 1978 the dollar was collapsing. Even jacking the Fed rate to 19 % wasn’t enough. The US had to issue bonds denominated in Swiss francs.

    Fortunately for the US$ there is no Deutsche Mark to flee to. (fortunate for German industry too, who were in ‘despair’ at the peak of the DM but muddled through)
    A currency running about a 2% budget surplus (before Covid) would be a shirt that was actually clean.

    Where does it end?: With a loss of faith in the US dollar, and a forced rise in rates. But if a rise in rates is too painful and the dollar is going to devalue? There is no DM to hide in, but there is gold and silver.

    • andy says:

      Hundred Billion dollars is how much three dot-coms change in value in one day.

      • nick kelly says:

        True. But the auto loss is a main street loss in the real economy.
        It is generally accepted that the paper gains by the FAANGS and Tesla do nothing to reopen any of the hundreds of thousands of small businesses and the millions laid off.

        I took a thousand as a minimal average number to include the number of sub 10K autos. If we look at newly leased cars and trucks, the loss may be more like 5000 per, which negates the whole business plan, the value of the unit ex-lease. Next will come a tsunami of repos on units where payments cease because the guy doesn’t have a job: a million units?

        For the owner- operator of a semi, he may have seen his one year- old 250 K rig drop by 25%.

        We will each have our own thermometer to take the economy’s temperature.

    • WES says:


      I think the bond market has suddenly realized that the Fed is going to implement Yield Curve Control (YCC).

      Real interest rates have moved more negative in the last few days.

      That is why gold has moved above $1800.

      The Fed is going to keep interest rates repressed and let the dollar fall.

      That may also mean prices for assets may rise instead of fall as everyone seems to be expecting. Example housing prices per Wolfe’s earlier article are expected to fall 6.6% in a year.

      If US dollar is falling in value, then it is possible housing prices could, for example, nominally rise but likely not fast enough to offset the dollar’s fall.

      Strange things can happen, when a fiat currency falls, to the nominal prices of real assets.

      • KGC says:

        The problem with that scenario is that all the other currencies are going to fall faster and further. The PIGS may not have killed the Euro, but the cure to keep them in, which weakened the banks, is very possibly going to be unable to hold the wall against the falling economies due to COVID.

        If Spain or Italy go, the ECB won’t be able to hold the rest together.

        • WES says:


          If you are right, that everyone else’s currencies fall faster (history is on your side), then US asset prices could rise due to everyone else putting their money into the US!

          Time will tell us what really happens!

        • nick kelly says:

          If the EU breaks up and Germany returns to the DM, the US $ becomes a second- tier currency as a store of value.

        • char says:

          If New York or Florida falls will the Fed be able to hold the rest together?

          Dumb statements require dumb questions.

        • char says:


          Bavaria will split off from Germany in the case of an EU break up so no return to the DM.

      • Rcohn says:

        Right now the 10 year real yield is -.(.75) and the nominal yield is .65% , implying an inflation rate of 1.40%
        If inflation goes higher and/ or the dollar goes down, all 10 year Treasury bond buyers at current prices will have losses . If the FED then tries to institute yield curve management , it will find itself as the only buyer of bonds. If that happens it will be a self fulfilling prophecy for even more dollar weakness and more bond selling.

        • historicus says:

          ” it will find itself as the only buyer of bonds.”
          We are already there…
          That is why they are buying corporates…at prices no one else would

        • char says:

          You need to see Treasury bonds as money, not investment so private buyers will still buy them

      • char says:

        All currencies are fiat in reality, even gold.

        • Tinky says:

          lol! Sure thing. That’s why gold has retained its value for thousands of years, while every fiat currency has gone to zero, or in the case of current ones, near zero.

        • char says:

          It hasn’t. The value of gold has gone up and down in that time. And currency is a medium of exchange, not a store of value

        • Tinky says:

          You don’t understand gold. No “money” or currency has been as reliable a store of value over long periods of time. Fiat currencies, without exception and in blinding contrast, ALWAYS lose 100% of their values. EVERY MAJOR CURRENCY currently in use is down over 90% in value vs. gold over the last century.

          Is there volatility in gold prices over shorter periods? Of course, but that has nothing to do with its obvious utility as a store of value over longer periods, nor its consistently strong performances during periods, like the current one, of economic crises.

      • Old-School says:

        I have learned a few things about government debts. 1) About five years ago Warren Buffet said government debt will never be paid only rolled over. 2) According to Hussman government deficits end up as corporate profits. 3) The Hedge Fund manager Dalio that wrote “The Economic Machine” says the debt cycle grows until it must be reset somehow and finally Stockman 4). Running up debt on the economy is a one time sugar high with dishonest money that kills growth once you are maxed out.

        In some ways it’s like a game the more people start loosing confidence in the financial system the more the central bankers have to say we will do whatever it takes. As Charlie Munger says no body really knows where the cliff is that you have printed too much money so the smart thing to do is not even get close to what you think the limit is. Maybe the central banks watch gold prices and when the price sky rockets they know they are losing confidence in the system. I would say they are fools if they suppress gold prices like they do front end of yield curve.

    • MC01 says:

      Boeing presently has over 400 737 MAX they haven’t been able to deliver to customers because they were assembled after the aircraft was grounded. These aircraft are only partially paid for as customers wisely suspended payments the moment the aircraft lost its certification using the force majeure clauses in their contracts.

      While Boeing shareholders probably hope customers will resume payments the second the aircraft will get its certification back, the problem is many customers will perform acrobatics to postpone or perhaps even cancel delivery. Airbus already has this problem on their hands and the CEO Guillaume Faury has gone as far saying that “some customers” have even stopped communicating with Airbus on the matter. Attorneys are going to make a bundle here.

      On top of this there is another problem: the MAX cannot be simply put back in service “as is”. Besides several modifications, crews will need to receive extra training. While Boeing is likely to end up paying for it, I expect a lot of airlines to “try their luck” to extort some cash on the side.
      For example Norwegian Air Shuttle (NAS) was one of the very first airlines to reach a compensation deal with Boeing over the MAX. The cash has long been paid and was gone before Covid-19 hit. Yet NAS is now asking for more money despite signing a legally binding agreement with Boeing. That company never ceases to amaze me… for all the wrong reasons. To give an example while Turkish Airlines signed a similar agreement, this contained ironclad clauses that any delay in the MAX certification process would be paid for in specie, meaning training and spare parts. NAS probably hired Lionel Hutz or some other ambulance chaser.

      • Concerned American says:

        Boeing is even more screwed than the airlines. Hard to see many new purchases in an environment where the airlines are struggling to survive. It would be one thing if Boeing had a highly regarded new plane on offer but something else when their best bet is a flying pig called a 737 MAX.

        • MC01 says:

          Neither Airbus nor Boeing are screwed. Both are too big to fail.
          Their vendors are: very much like in the automotive sector the trick to cut costs is to pass them lower and lower in the supply chain.
          It costs Albany International and Safran over $100 million to set up a single manufacture facility to manufacture the fan blades for the CFM LEAP-1, the engine used by both the 737 MAX and its rival Airbus A320neo. So far they have set up three such facilities, one each in the US, France and Mexico.
          Boeing and especially Airbus pressured Safran and GE (the 50/50 owners of CFM) to expand production and in turn Safran and CFM pressured their own vendors.
          Same thing with everything else, from wiring harnesses to lavatories.

          Now all these vendors face the music and they haven’t got enough political clout to be bailed out in the same measure as their customers. To quote Dusty Rhodes “Hard times, baby”.

      • char says:

        Is NAS not the one you said would go bankrupt last year and didn’t because of financial acrobatics which should have won the Clown d’or. I would have expected that they would try to pull such a stunt.

        ps. I didn’t think you were wrong on NAS but Covid helped them survive a little bit longer

        • MC01 says:

          NAS has effectively gone bankrupt in late May: previous shareholders were wiped out and now the creditors (chiefly leasing companies) own the airline. It was the price to access the emegency funding made available by the Norwegian government.

          However it remains to be seen what the future has in store for them. All of Europe’s low-cost airlines have restarted service in mass: Ryanair, Wizz Air, Volotea, Transavia… the only two exceptions are Vueling and NAS. Vueling has been caught in the decision-making fiasco of IAG and has probably already missed the recovery bus. NAS… they are probably waiting for their good luck to save their bacon.

      • nick kelly says:

        Almost mentioned legal probs in first post but thought Boeing would be reluctant to sue customers re: future biz, but if Boeing is desperate…

        Wouldn’t have thought force majeure was necessary in original cancellations when 737 lost certification (except possibly by Boeing to excuse failure to deliver) as Boeing was in breach, not the airlines. I assume the contract called for Boeing to deliver flyable planes.

        But the airlines might invoke it now; the planes are ready but Covid (the force outside their control) makes their purchase impossible.

      • MCH says:

        It would not surprise me if there is a permanent market shift that happens here in the single aisle market. I give it even odds that Boeing will exit that market by 2050. McNerny’s decisions essentially killed Boeing’s commercial business, even though his was just one in a long line of bad decisions, those decisions were probably pivotal.

        The Neo is going to dominate the market because it got there first, and C19 along with the crashes has pretty much sealed the fate for the 737. As you point out, new training is needed for the plane, and in this day and age, why would anyone bother. The Neo is going to win just because of positioning. As for a clean sheet, it’s possible, but only after the market recovers, that’s going to take a decade plus given all the surplus jets on the market.

        But I do think Boeing will survive, because if nothing else, there are military contracts that can keep it afloat.

        Bill Cohen’s last supper has ensured too big to fail. (another wonderful legacy from the 90s that was mostly dominated by fat bubba) Remember, Northrop Grumman, Boeing, Lockheed Martin, and the parts there of, used to be something like seven or eight different aerospace companies. Now, the remainder are all going to survive no matter how badly run they are.

        • polecat says:

          Sure .. until we finally have the War to end all Warring Humans. Then it’s back to the slime from whence we came.

          … and that’s assuming some menu of mutating creepycrawlies don’t do us in first.

        • char says:

          The XLR is killing widebody on the Atlantic so leaving single aisle means leaving the airplane market.

        • MCH says:


          I’d agree, but the 737Max isn’t going to be enough for Transatlantic. It’s just a bit too small, and that market is going to be dominated by Neos in the foreseeable future.

          There is no NMA from Boeing because they are too busy trying to salvage the Max. The middle of the market is getting squeezed because Neos are almost good enough to replace the 757s.

          One thing Boeing could potentially do is scorched Earth, drop the prices on the Max a lot more and force Airbus into ruinous competition. Perhaps more radical is to kill the Max altogether and regenerate the line with 737NG, and drop its prices and use it as a stopgap, and go for a clean sheet. Because the market for airplanes are essentially going to be dead for the next five years. So, why throw so much good money after bad.

          Just consider how many airplanes they are parking right now. But Boeing could never go for this kind of radical strategy, Calhoun and the people on that board doesn’t strike me as radical thinkers. They could probably do as well hiring Elon Musk to run the company. That along would increase its market share by 20%.

        • char says:

          Returning to building NG is to expensive. What could be done is build Max with NG engines which would be a cheaper option. But the reason why Boeing made the MAX was because the NG was not competitive with the neo. Boeing could dump price the 737 but Airbus would not respond by lowering the neo price but by selling the A220 at a very nice price.

    • char says:

      There is only a wealth effect if the people value their car Mark-to-Market but this is unlikely to be the case. First you have the simple fact that a lot of car value is simply leased and than the value is simply the monthly payment. Secondly simply driving of the lot after purchase will always be accompanied by a steep value loss. With a new car it is very big but even with a second hand it is there. Third people rarely sell cars. What they do is exchange them for a new one so if your old one drops in value but your new one drops more in value than you are winning

      Not only is paper dollar money but it is also federal debt. In fact all federal debt is money. So having a budget surplus means less money for the economy. I wont argue that before Covid there was to little money (i don’t know) but the assumption that zero federal debt is best is simply wrong

  7. Pie-O-My says:

    florida and arizona are hitting their ICU bed capacity; in texas theyre also close and having to do triage care and sending the rest to ICUs.

    what happens when the rolling daily average for infections hits 100K from 60K today?

    I dont think we are shutting down again so what happens when the daily number of cases overwhelm the system?

    There is no way mlb season is happening, nba season will be a shit show, and the nfl season and college football seasons will be cancelled.

    when we hit 100K daily cases, will food production will take a hit in the US.

    I ‘ve been generally sanguine about this thing until about now.

    When I look into the eyes of people like bolsinaro, trump, biden, clinton, obama et al. i.e. the elites, all I see is a self-loathing blackness of death.

    In the end, fascism is always about death, and it doesnt matter how you get there; whether via pandemic, war or genocide.

    • John says:

      Just curious here, but how did you get a look into those aholes eyes? Every time I try to meet eyes with a shifty type they always look away. But yes, I’d imagine them to be dark and hollow, much like their souls certainly are.

      • BuySome says:

        Did get a short distance look at Jerry Ford’s once..didn’t detect any real deceptive evil there at the time. Of course the package under my arm kinda made the Secret Service guys nervous…shoes in a box that I had just bought on another corner. But they didn’t tackle you to the ground right off in those days.

      • polecat says:

        Notice how they always carry themselves, smiling a fixed rictus grin?

    • Rcohn says:

      Trying to hold an NBA or MLB season without fans is a joke.
      Can you imagine a stadium built to hold 100,000 football fans completely empty. The market will react very negatively as reality sets in and the college and NFL season is cancelled.

      • BuySome says:

        Next year’s Hooverville containment facilities..homeless can check in but they can’t check out. Big screen TV and free food. Career planning services at no cost. Masks are on the house.

      • Pie-O-My says:

        @Rcohn yeah spectator sports without live in the stands spectators kinda suck; like the us open or wimbeldon without fans or nba finals without fans all quiet; nfl is thinking about piping in sound from the stadium speakers; but i dont think there will be an nfl or college football season…mlb on the other hand, we’re used to seeing empty seats at mlb games, but empty seats at the world series? in a short 60 game season with some stars sitting out and with some starting rosters getting sick?

      • John Taylor says:

        I still don’t understand why they haven’t mentioned filling a 100k capacity stadium with 10k people.
        You can still get the distancing, and if you limit capacity that much you can charge a lot more for the tickets too.

        • char says:

          Seating is not a problem but the hallways behind the stands are. It also looks sad. Besides what are you going to do when the people celebrate to joyfully?

        • Rcohn says:

          I know that it is not the Big10 or the SEC, but the IVY league just cancelled the entire fall season for all sports.
          If other football crazy conferences and the NFL cancel , the stock market will finally realize reality is not a V shaped recovery and will have the worst sell off since 1987

      • Gandalf says:

        Most of the major European football (soccer) leagues have resumed their 2019-2020 season – English Premier League, La Liga, Serie A, Bundesliga, playing before mostly empty stadiums.
        A few games I’ve noticed have allowed a sprinkling of fans into these stadiums, most of which are smaller than US stadiums, but some are huge in the 80k-100k size category like Camp Nou.
        Worldwide TV revenue provides the bulk of revenue now, which is why they are doing these empty stadium games
        TV ratings have been good- cooped up fans are hungry for new entertainment with TV and movie releases and production shut down

        • char says:

          No fans also allows two evening games a day throughout the week which can’t be done on normal work days which are also good for ratings

    • Paulo says:


      The answer to your “what happens when” is refrigerator trucks holding bodies and then mass graves. In NYC crematoriums were backlogged for weeks during their nightmare height.

      It’s going to be brutal.

    • Faifo says:

      Which country did Trump call a ****hole?

  8. roddy6667 says:

    It will get worse before it gets better. In Reuters today 7/9/20
    In addition to nearly 10,000 new cases in Florida, Texas reported over 9,500 cases and California reported more than 8,500 new infections. California and Texas also each reported a record one-day increase in deaths.
    It was the second day in a row that U.S. deaths climbed by more than 900 in a day, the highest levels seen since early June, according to the tally.
    Tennessee, West Virginia and Utah all had record daily increases in new cases, and infections are rising in 42 out of 50 states, according to a Reuters analysis of cases for the past two weeks compared with the prior two weeks.
    Infections rising in 42 out of 50 states. Great. American exceptionalism.

  9. CZ says:

    A friend who is a long-time attendant with UAL was asked a few weeks ago to take some “time off.”

    “How long?” she asked.

    “Check back in 18 months.” :-|

  10. Serge says:

    Airlines got my money twice already without providing any service. I got stuck overseas for 5 months now. Purchased tickets to USA twice and they cancelled both times, but they don’t refund the money.

    • Wolf Richter says:

      That’s sounds like a good business model to me. I wish I would have thought of it. But then, I would have probably been sent to the hoosegow for it :-]

      • EJ says:

        Nonsense. Just sell refunds as a elite subscription member exclusive feature.

      • BuySome says:

        Are you sure you came from Germany? I’d swear you must have bought your hats from the Houston Farm Supply!

      • CRV says:

        Over here (The Netherlands) some travel agencies let people book a holiday + flight and cancelled it a few days after payment was done. The bookers got a voucher instead of their money back.

        • X-Pat DE says:

          This “voucher instead of cash” response was against (German) law.
          At the start of the government lockdown people were being told “to wait” because of said law: “You’ll always be able to get a cash refund.”
          The law was quickly changed about a week later.
          Still, Lufthansa got their mitts on €9,000,000,000 from the government, so that evens things up. (/sarc)

  11. EJ says:

    Who was really expecting a V shaped recovery though? Or even a long term recovery?

    Business is going online, fast, and indefinitely. Even in a parallel universe without COVID and the depression, the trajectory of the world is not condusive to international vacations or family travel. Without a couple of materials science, computing and legal miracles, there’s no Elon Musk coming to revolutionize air travel (even if space is getting some interesting breakthroughs).

    I think COVID just accelerated the inevitable. Or do the optimists think planes will start running on U235, with Nvidia robopilots and travelers who sold Tesla stock?

    • polecat says:

      We’re stair-steppin it – down-like .. It’s just that everyone will fail to negotiate their personal treads, minus any risers!

      Get your padding on while you still can.

    • VintageVNvet says:

      IMO, your first sentence should read, ” who HERE….”
      And after that sentence, similarly,,, but, in spite of my continuous optimism regarding the USA as the finest, so far, example of fairness for all folks willing to work, it seems that the tide has at least achieved stasis/equalibrium for most, but clearly not all..
      SO, once again, We the PeedONs must go back to work to help each and every one of our brothers and sisters.
      When folks understand clearly that ”there is no peace for any before there is peace for all” we WILL attain global peace soon after,,, until then, who knows what might happen

  12. KGC says:

    The industry I wouldn’t want to be in right now is Trade Show Productions. They are dead in the water and major income generators for the cities that host them. How much? Well in Las Vegas, for example, they get priority over tourism.

    There’s going to have to be a paradigm shift in how marketing is conducted due to this pandemic.

    • EJ says:

      In theory, trade shows can do much of what they normally do online.

      Some industries seem to be splintering though, with the major participants all hosting their own individual streams.

      • El Katz says:

        EJ: Key operating words are “in theory”. I can see products in a magazine… I can watch a Youtube of a product presentation. However, I can’t touch it nor experience it. Virtual reality is not a substitute for a tactile experience. I’ve seen a lot of *pretty* products that turn out to be junk once one get a hands-on exposure to them.

      • ers says:

        I agree, much can be done online these days. Very few things in commerce actually require physical interaction. However, humans need the physical sense of community. I do not see that being completely phased out. I believe this is just a shock that will subside even if infection rates do not materially change.

        • philm says:

          I’ve been in the B2B digital marketing space for almost 20 years at this point. Attended many a Show . Always have been intrigued by the large % of marketing budgets devoted to events. It’s the only thing many in the space have known when it comes to marketing. ( a lot of dinosaurs) Some of the in person events are trying to rebrand as Virtual ( Semicon West for example). I just don’t see a migration to these clunky platforms when a content rich, search engine friendly website will do the trick.

          Some of the live events still on tap are talking about scaling back # of attendees and marking up the show floor similarly to how the grocery stores are funneling traffic by One Way rows. Good luck. I just don’t see an audience at this point. It’s taken a long time but the manufacturing/engineering space is finally being forced to fully embrace digital channels.

    • Ethan in NoVA says:

      Laser show systems / lighting systems / LED wall systems are an odd hobby of mine. Because of the tight laser show hobbyist community I’ve gotten to know people in the touring industries and execs at commercial hardware vendors. This is on top of a podcast I listen to often. I’m an outsider looking in… but off the top of my head the concerts and show world has over 12.5 million people out of work. Everything from the rigging side to lighting to sound to catering and all the other support. Supposedly a bunch of people are trying to migrate into other fields if they can, or find work however possible but a lot of those smaller companies are on tight margins. From what I understand there isn’t a ton of relief for them at all. Rental houses and hardware vendors and supply chain is dead as well.

      It seems fairly bleak for the moment. So not just trade shows there are lots of things like it. I volunteer with a large nonprofit video game music and gaming festival and our next (and main) event is in January. If stuff isn’t rolling by then it’s going to be a mess as it’s where all the money comes from.

  13. kleen says:

    People travel mostly for business, then, weddings, funerals, vacation, shopping, visiting friends, family, concerts, sporting events.

    Those things are not back to normal, not even close. So as long as the reasons people travel are not back, people won’t be traveling.

  14. LibertyOne says:

    Soooooo WHEN is the TSA going to LAY-OFF agents??? Crickets!

  15. xear says:

    Can’t imagine why people wouldn’t want to be packed like cattle in long lines, strip-searched, luggage searched, pilates bands confiscated (you could tie someone up with them), probed up their nose, packed into another waiting room, finally board, sit for hours only to be told there is a delay and we must de-plane while babies are screaming and emotional support dogs barking or doing their “business.”

    Water fountains closed if you want water $5, if you want food $$$. Now let’s get back on the plane and all breathe the same air for 10 hours.

    What’s not to like?

  16. Rowen says:

    In most recessions, demand decreases as a function of price. People lose income, and the demand curve shifts at each and every price point. But because of covid, a lot of the demand destruction isn’t because of price, but product substitution. The pool builders and boat sellers I know are going bonkers as people shift from mass tourism to individual staycations. I haven’t looked up RV sales (which normally decrease in recessions), but I’m assuming they’re going nuts too.

    • random guy 62 says:

      We just traded up on our camper. RV dealer is one of the bigger ones in the country. Our sales guy said they’ve never seen anything like it. Between production shutdowns and incredible demand, they can’t build them fast enough so their inventory was LOW. Just as you say… substitution. People are finding alternative ways to have fun. They can get people in a new camper for $100-200 a month on a 10-year loan as the standard. Crazy.

  17. historicuss says:

    Domino out those job losses…and the services that tend to the airline industry.

    Air travel will become more rare and thus become very expensive in the near future.

    • historicus says:

      Cities like Chicago that reap massive revenues from their O’hare Field …
      will see massive revenue shortfalls … to go with the hotel shortfalls…and convention shortfalls….

      • Golum says:

        and with record numbers of police officers retiring ASAP. Boy, Chicago is really the perfect storm.

      • Anthony A. says:

        According to the reports, there seems to be an adequate inventory of ammunition in Chicago.

      • Chris says:

        Before COVID, Illinois was losing 1 population count every 5 minutes. It’s got to be worse now. If a State is allowed to go Bankrupt (which it should) Illinois will be first in line.

  18. fajensen says:

    Doesn’t that rather depend who ends up on the sticky end of that “Great Purge”?

    • char says:

      500 million ? Did they just count everybody who has died in the USSR between 1919 and 1991 and blamed it on communism?

  19. Paulo says:

    I thought protection meant sunscreen. Jeez, who could know?

    One question, how do you conceal carry in a bathing suit? Sounds like a real nice place to live.

    • MiTurn says:

      Crime becomes rationalized; us vs them becomes normalized; in the end tribalism.

      Everyone loses.

  20. Dave says:

    The ‘V’ shaped recovery was in the Nasdaq, specifically the FANGMAN stocks. That was the coded message. No ‘V’ shaped recovery for the economy! Not happening.

    Make America Have Jobs Again! MAHJA

    • Gene says:

      And no V-shaped recovery in value stocks. My value fund is still in the year 2011, down 21% YTD, with concentrations in Charter Communications, Medtronic, Merck, Samsung, BAT, Eli Lilly, Kroger, and Kraft-Heinz.

  21. Brant Lee says:

    What about the Trump empire? I haven’t read anything about it, speaking about travel and accommodation. Trump personally wasn’t supposed to get stimulus (being president) but I suppose there were ways around that for his hotels and resorts. But shelter for the homeless? Probably not.

  22. Michael Droy says:

    And this is just looking at the carnage in Revenue.
    Some airlines own most of their planes too. Selling them on as second hand isn’t going to be easy.
    Take – lufthansa (Plleeease)
    Eur 7.5bn of equity.
    EUr 20.5bn of planes and parts.
    No write downs yet

    I guess there are some US airlines in a similar position.
    What would be a sensible fair valuation of a commercial jet aircraft? 70% of BV?

    • NewGuy says:

      And if you need to buy an airplane,who would buy a new Boeing or Airbus if there are so many dirt cheap and good aircraft sitting on tarmacs around the world.

      • char says:

        You assume an second hand plane is cheaper than a new plane. I don’t know if that is really true

      • MC01 says:

        A Boeing 737 MAX or an Airbus A320neo have roughly 15% less fuel burn than their predecessors. The A320neo is also certified to carry kg 2,000 of cargo and has 500 miles more of range over the A320ceo it supersedes while the MAX can pack more passengers than the 737NG ir replaces thanks to a complete cabin layout redesign.
        The difference between, say, an Airbus A330/340 and an A350 is even more marked.

        On top of this there’s another factor: aircraft become more and more expensive to keep flying as they age. For example the A320ceo family (excluding the specialized A318 which has a slightly different schedule) has the dreaded and expensive 6C Check planned for 108months (9 years) and the 8C check planned for 144 months (12 months). And as I wrote before a part of the reason the A380 has no second hand market is because of the need to replace the landing gear at midlife (160-180 months), an operation that costs roughly $15 million per airframe. I won’t even start with the A380 fuel management system: it’s masterpiece of engineering but I don’t want to be the one footing the bill when it comes due for maintenance.

        Of course, there are still many 737 Classic flying around in both cargo and passenger configuration, but the owners have to keep on weighing the costs of keeping them flying. When the MAX will return to the skies and enough A320neo will be delivered it’s likely these aircraft will rapidly disappear to be replaced by 737NG and A320ceo.
        And the cycle continues.

        • char says:

          Another reason classics are still flying is that they have feature no modern airplane has. They can fly in on much rougher airfield so don´t be surprised if ceo and NG disappear much faster

  23. Cobalt Programmer says:

    Indian Government’s official airlines, Air India made a huge sum of money during this COVID crises. Are you ready for this?
    Due to virus quarantine, government banned all flights in and out of country except Air India. Also, several airports waived fees for airlines taking citizens from foreign countries back to India. You might think its free because lot are stranded without any money, lost job and on a one way trip back to home.NOPE.
    Air India charges $1300 for one way from US to India. This is to and fro money with lot of extras. Like, usually the food is very good in Air India. Taj restaurant will cater the passengers. Food in flights banned due to COVID.
    Also Air India is the only way for foreigners to go back to their own countries. For example if Nigerian on his business trip is in India, he has only one choice. I dont know the charges for them. Now Air India made >1 billion of Indian rupees (worth less in US dollars). Little did we know…

  24. timbers says:

    The U.S. has surrendered to the Cornovirus, because her government and healthcare system is 3rd world and can’t hold a candle to the vastly superior semi-socialist mixed economy systems in Europe, Japan, Korea, Asia.

    Mexico bans U.S. Europe bans U.S.

    Houston admits dead count vastly under reported. Because people die at home. Nobody could have predicted that a nation with 40 to 80 millions with no access to healthcare would die because of it.

    Yet still, to date, in the middle of a healthcare crisis, our leaders have done nothing to fix our broken 3rd healthcare system.

    But the rich and Wall Street were bailed out and subsidized within weeks.

    The only V shaped recovery is for Wall Street. Thanks for minding your own assets, Jerome.

    Check out Worldometer. The one nation that stands above all others as worst governed and worst healthcare system is there for all to see.

  25. Gene says:

    My wife had paid (early this year) for one of her sisters in Russia to visit us in Virginia. She was to arrive about two months from now, around September 8th. We called Aeroflot yesterday to change the date, because of how things are in the U.S., and were somewhat surprised to hear that Aeroflot had already cancelled the flight.

  26. historicus says:

    you failed to mention the European country with a better healthcare system….countries with under 10 Million dont count.

    • Concerned American says:

      Your much vaunted health care system ranks 37th according to this review.

      • Otto Maddox says:

        They asked questions about the socialistic nature of their system. Looking at it from the actual care provided, the US is either 1 or 2. In addition, US scientists win the vast majority of the Nobels and US pharmaceutical companies do a majority of new drug development.

        • polecat says:

          Excuse me, but care for WHO??

          There are 30 to 40 million plebians currently without access to ANY healthcare.Then you have those under that holey umbrella, colloquially known as ‘Bama Care .. with all the pitfalls, scams, and churn therein. Next up to bat, much of ’employer-based’ HC will fall .. and not get up – due to massive layoffs coming, so the only remaining players in the Murican Deathcare Game will be government workers at various levels – with Congrease filling their gob, stuck like mussels, at the top of that decaying heap! .. or those avaricious few, who can ‘self-fund’ any care they need.

        • Concerned American says:

          You lose your job you lose your affordable healthcare coverage. What a fabulous system. Also, how come the US infant mortality rate trails some third world countries?

        • Concerned American says:

          Hmmmm. Not sure I agree as per the excerpted paragraph below.

          “How is the quality of healthcare determined? Several factors determine the level of healthcare quality in each country. These include the care process (preventative care measures, safe care, coordinated care, and engagement and patient preferences), access (affordability and timeliness), administrative efficiency, equity, and healthcare outcomes (population health, mortality amenable to healthcare, and disease-specific health outcomes”

  27. Scott says:

    Anyone notice how blue the sky is without all of the jet contrails? And it is much quieter outside now too.

    • Just Some Random Guy says:

      Move away from the airport. It’s always quiet then.

    • Gene says:

      Scott, however, that apparently has a very major environmental downside. Go to Guy McPherson’s website, his name, dot com. That lack of CO2 (soot) is letting in more of the sun’s rays (whereas before they would have been deflected out into space), thereby heating the planet at a considerably greater rate than what had been forecast pre-C19, temperatures too high for farming, thereby leading to widespread crop failures as early as next year. McPherson is a conservation biologist.

  28. B.A.C.A.H. says:

    When I saw the headline on UA story, I did a search to see if they or others are selling the coveted “slots” at congested airports, to raise cash. Pan Am did this with its London Heathrow slots during its final days.

    There was an article in the Financial Times this week, that the bond market is now becoming skeptical about the value of such “slots”. I was able to read the article one time for free, but when I returned later there was a paywall, so I am not sharing the link here.

    But, it makes sense. There are no congested airports at present. Maybe there won’t be for a long time. So, maybe the values of those “slots” ought to be written down.

  29. char says:

    Could you please refrain from using four letter words. You are obvious using the word communism as a four letter word as i don’t see how the rulers in Calif., NYC etc have anything to do with communism. I also don’t call state where you can carry concealed weapons fascist controlled concealed carry states. Though obvious fascist states like Nazi Germany and Mussolini were big supporters of an armed populous while i don’t see any communist features in Calif. or NYC

  30. Just Some Random Guy says:

    Sorta related to this as it is transportation. My wife and kids ordered new bikes about 2 months ago. They still have no been delivered and the expected date is now August. This is from a custom bike shop in California.

    I’ve seen this briefly mentioned around the web, but there is a crazy shortage of bikes out there. Everything from the cheap Chinese garbage at WalMart to the high end stuff. After Corona kicked in, people wanted a bike as an alternative to public transportation and there’s been a shortage ever since.

    If you have an old bike gathering dust in the garage you could make a little money selling it right now for a premium.

    • Wolf Richter says:

      Just Some Random Guy,

      Yes, the entire bicycle industry has been one of the clear winners in this crisis. The anecdotal reporting from bike shops and from customers wanting to buy bikes has been quite amazing over the past few months. There was some reporting here in the comments too. At first, it seemed hard to believe, but everything kept pointing in the same direction.

      • polecat says:

        So how many of these will be junkers/castoffs as C19 wanes, I wonder?? Look at what recently went on with the failed sillyCON scooter/bike rentals/apps. fad. Those things appeared to be ditched everywhere, nilly-willy!

        Of course, for the up-n-coming nouveau-poor, bikes will be where it’s at .. short of locomoting in shoeleather.

    • Jdog says:

      In China they literally have mountains of discarded bicycles people no longer want because they are now prosperous enough to afford cars and motorcycles. Here in America, people are parking the cars they can no longer afford to operate, and turning to bicycles to save money. What does that tell you? Do you think that is bullish? Does it make you want to invest in companies that do not make money?

      • MC01 says:

        The “mountains of bicycles” are actually a byproduct of bike sharing: those are bikes abandoned around the city and impounded for blocking sidewalks, parking areas and other public spaces. Many Chinese cities are very strict about this behavior.
        They are put in neat piles, each belonging to a different bikeshare company, so the owner can get them back after paying a small fine, something very few companies bother with.
        After a certain number of days (according to city regulations) the bicycles are just disposed of, meaning thrown in a big heap to await the scrap metal merchant.
        European cities from Amsterdam to Zürich have had exactly the same issues on a smaller scale, ironically enough mostly with those same Chinese companies.

        In the West bicycles are now just a fashion statement, not a necessity nor a way to keep fit. I won’t say anything more because I run the risk of becoming extremely explicit.

        • Jdog says:

          But rising incomes, technological advancements, and policy neglect led to a dramatic decline in bicycle ownership, as car culture went into overdrive in the early 2000s. With more than 300 million registered vehicles and as the world’s largest producer of automobiles, China has unofficially attained another curious title: the “Automobile Kingdom.” At the turn of the millennium, Chinese state media referred to the bicycle’s demise as the “nation’s full-fledged entry into ‘car society.’” The wealthy port municipality of Dalian even declared itself a “bicycle-free city.” One’s status of urban sophistication was seemingly no longer judged by whether you owned a two-wheeler, but rather a four-wheeler.

      • Wolf Richter says:


        These discarded Asian bicycles are not what Americans are buying. What they’re buying is high-tech equipment made of the lightest materials. Many of these bikes cost thousands of dollars. Components are valuable enough that they get ripped off the locked bikes and sold on the black market. You need to venture into a bike shop and look around some.

        • Yertrippin says:

          Electric bikes are the new gold where I live in So Cal!

        • Jon says:

          I used to have a titanium road bike with top end components and it was worth more than my old-ish car :-)

        • Wolf Richter says:


          Yes, I remember those when they first came out. I had an early carbon-fiber bike, bought in 1991 (?) when I was still racing. Super-light, and when I shifted to attack, it made this scary noise, and everyone in the peloton knew I was attacking…. Yeah, those were the days. It got stolen out of our garage in SF.

      • Just Some Random Guy says:

        This isn’t due to economics. It’s due to people not wanting to be on a bus or subway car with 100 people.

        • Jdog says:

          You think 30 to 50 million unemployed is not effecting economics? A good portion of these unemployed realize their future prospects for employment are dismal at best…….

    • Mike G says:

      Bike shops around the world are doing very well. The inexpensive ($500-800) bikes are nearly gone and there’s a lot of demand for the higher-spec stuff as well as repairs and maintenance.
      Something you can do for exercise when the gyms are closed, fight cabin fever, an activity for the whole family.

  31. El Katz says:

    I was at a local gun range in Scottsdale, AZ yesterday AM. First time I’ve ever been to that particular range. At 9:30 AM (when they opened) there was a line at the door of about 20 people. At 11:00 – when i came out of the range – the store was crowded with customers (probably close to 50). The display cases were mostly empty of inventory and there was a sign in the retail area – near the door – that read “We are out of the following ammunition” and went on to list several calibers that were currently unavailable.

    There were as many women practicing shooting as there were men – most of the ladies with large caliber pistols. The people on the range represented a wide spread of ages (18+) and physical conditions. Not all were using sport targets…

    The range was unavailable to walk-ins as it was fully reserved for the remainder of the day.

    I have to say that I wasn’t expecting that… it was like Costco on a Saturday afternoon. It appears that Golum isn’t as off base as some would like to think.

    • MiTurn says:

      A weird world. My uber-leftist ‘progressive’ I-hate-Trump bro-in-law loves guns.

    • Anthony A. says:

      A neighbor of mine, a 72 year old female widow, told me she just bought a .380 Glock semi-automatic and has signed up for a class in concealed carry weapon licensing. Of course, this is Texas, and many of us have weapons and CC permits, but now this is expanding to female seniors. Our local gun range is out of 9mm and .45 ammo at the moment.

      It’s a new world here.

  32. Jdog says:

    If someone had told me 25 yrs ago that in the future 95% of Americans would suffer from Anosognosia ( the genuine inability to recognize that the problem exists ) I would never have believed it. Hell I still have trouble believing it, and I am living through it.
    All I know is soon they will have a very rude awakening, and the irrational optimism will finally come face to face with reality. The Emperor has no clothes, your wealth level is no where near what you think it is, and your future is bleak and no belief in unicorns is going to help you.
    We are not living in a new magical age where we can manufacture prosperity from thin air. We have mortgaged the future to pay for yesterdays party and now the bill is due. What is happening to the airline and hospitality industries is systematic of what is happening to the entire economy.

    • polecat says:

      Yeah Jdog, in spades!

      Those who can plant a garden, better get busy, Stat!
      Cruz you’re gonna have to, at some point, rely on it .. for at least Some sustenance.

      Or is that too Russian-like for Muricans to even contemplate??

  33. MonkeyBusiness says:

    Airlines should invest in the stock market. Seems more profitable than actually doing their own business.

    • Wolf Richter says:

      Not at the moment :-]

      • MonkeyBusiness says:

        Hei, I am short the market too, but if these guys had invested in the market sometime in April, they might be flush.

        • Wolf Richter says:

          Yes, most definitely, but they were selling their own shares and bonds at the time to raise some liquidity and survive — after they bought back their own shares in prior years at peak prices. Buy high, sell low.

    • Jdog says:

      Yes, why produce when you can speculate! Soon we will learn how to eat speculation and turn it into durable goods……. Why did people ever think we actually had to produce anyway?

  34. Jan says:

    We, living in the Netherlands, have children, grandma and family in NY and LA and would like to visit. The airline industry has not hit on a business model that will make us buy tickets. Sardines in a can is not it. Never mind the expense.

  35. fred flintstone says:

    Typically when a business suffers a lack of demand the owners take the price to the lowest possible to encourage demand. Cuts costs to help.
    Not this bunch of incompetent dolts. In a time when their greatest cost, fuel costs, dropped to just about nothing they kept pricing sky high. Dropped leg room to mouse levels. Made everything ala carte. All interested in max bonuses. Would not surprise me if they sold masks and sanitizer on board.
    Fire the executives and there might be a chance they prosper.Oh, but of course they have to be paid millions because who else in this world of 6.6 billion people would want their jobs…….figuring out how to cut leg room while getting paid millions. They are simply irreplaceable…..according to their dads that sit on the boards……of course the government bailouts are next.
    Reagan stated government was the problem…..yes but Executive pay is also the problem.

  36. Fred says:

    I just flew a round trip on AA Charlotte to Seattle. Was one of the worst experiences flying ever. These people dont even give water any more. Their boarding/unboarding process is chaotic. The attendants are rude, the planes hot. Now imagine having to wear a mask for 5.5 hours, and be threatened by flight attendants that they wont let you fly unless you wear one. In a review of the flight, I told AA to F__k off. Wont fly them again.
    Also the same flights now cost 40% less but I had non refundable tickets(dont let that Covid19 refund offer for non refundable flights fool you-they wont refund your money.

  37. m. says:

    would not consider flying until the totally stupid a**holes are gone forever – would not s**t on an airplane

  38. VintageVNvet says:

    IMO, your first sentence should read, ” who HERE….”
    And after that sentence, similarly,,, but, in spite of my continuous optimism regarding the USA as the finest, so far, example of fairness for all folks willing to work, it seems that the tide has at least achieved stasis/equalibrium for most, but clearly not all..
    SO, once again, We the PeedONs must go back to work to help each and every one of our brothers and sisters.
    When folks understand clearly that ”there is no peace for any before there is peace for all” we WILL attain global peace soon after,,, until then, who knows what might happen

  39. sierra7 says:

    This made for very depressing reading even if on target! The airlines are the canary in the coal mine of belief that there will be any kind of swift recovery, “when this is over!”
    A few commenters touched on the periphery of the “arts”; stage work, engineering etc. Thousands upon thousands of symphony artists, stage workers, sound engineers, etc are out in the streets. So much of the arts world is taxpayer supported. What a shame to probably face losing so much talent even for a small period of time.
    I truly now believe there will be a “Great Reset” to our economies/social lives. Nothing like we have read about in the past. This will be the “new” future.
    Good luck to all!

    • Golum says:

      A guy that clued me i n a few years ago is the author who goes by the name of Cathal Haughian. Not sure if it’s his real name or not. He wrote a series of three books on the philosophy of capitalism and the final book was entitled The Reset. It helped me prepare for what is happening. He had a website, but he’s pulled all but one of the many articles that were there. The article’s contents gives one pause as to why he chose to keep that one.

      As you said, good luck to all!

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