“Unfortunately, we see few catalysts over the next six months to meaningfully change this trajectory”: Delta.
By Wolf Richter for WOLF STREET.
October 1 and the days that follow are going to be rough in terms of tens of thousands of well-paid service jobs – that’s what airlines are threatening unless they get another $25-billion bailout. Airlines have been trying to shed employees by offering packages that induce employees to depart voluntarily because the $25-billion bailout package under the CARES Act banned “involuntary” furloughs or layoffs through the end of September.
The air passenger business is still down roughly 70% in the US, six months after the initial collapse of traffic began, according to TSA airport screenings of air travelers entering into security zones. And demand has hardly improved any since early July, and airlines continue to slash costs and cash-burn to survive:
“It was assumed that by Sept. 30, the virus would be under control and demand for air travel would have returned. That is obviously not the case,” American Airlines CEO Parker and President Robert Isom told employees in a grim message on Tuesday.
Under its buyout, early retirement, and long-term leave-of-absence programs, 23,500 employees had already voluntarily departed. But that wasn’t enough. So the executives told employees what the next step would be: 19,000 “involuntary” furloughs on October 1.
American, which started the year out with about 140,000 employees, expects to have fewer than 100,000 employees in October.
“The one possibility of avoiding these involuntary reductions on Oct. 1 is a clean extension” of the bailout package, they said. So if given another bailout, American, which received $5.8 billion under the first bailout package, will then not lay off those employees on October 1 – but instead on the date when the second bailout package would expire?
In the fourth quarter, American expects to fly only one-fourth of its usual international schedule and less than half of its usual domestic schedule. Last week, it announced that it would pull out of 15 smaller cities in October, “as a result of low demand and the expiration of the air service requirements associated with the Coronavirus Aid, Relief and Economic Security (CARES) Act. This is the first step as American continues to evaluate its network and plans for additional schedule changes in the coming weeks.”
Airlines are grappling with this collapse in demand and a recovery that is stuck in the mud. If they don’t succeed in slashing their cash burn, and if they can’t raise new money, either in the market or via bailouts, to fund that cash burn and pay existing creditors, they’re going to contemplate another wave of bankruptcy filings. They’ve already been through this and know how to do it.
On Monday it was Delta Airlines. In a memo to pilots, it said it would furlough 1,941 pilots in October unless it reaches a deal with the pilots’ union over a cut in pilots’ minimum guaranteed pay. Delta proposed a 15% cut. This comes after 1,806 pilots had already agreed to depart voluntarily with early retirements.
“We are six months into this pandemic, and only 25% of our revenues have been recovered,” John Laughter, senior vice president of flight operations, said in the memo. “Unfortunately, we see few catalysts over the next six months to meaningfully change this trajectory.”
Southwest Airlines has cut 36% of its flights from its October schedule, the Dallas Morning News reported on Monday, citing an analysis from Airline Data Inc.
Earlier in August, Alaska Airlines said that up to 4,200 of its employees would be furloughed or laid off starting in October.
On July 23, Southwest said that nearly 17,000, or 27% of its total workforce, had accepted packages to depart voluntarily, including 4,400 who separated completely, and 12,500 who agreed to take a leave-of-absence of a year or longer.
And on July 8, United Airlines announced that 36,000 employees in the US, or 45% of its US staff, could face “involuntary furloughs” on or after October 1, but that it was trying to get employees to accept an array of packages for voluntary separations.
It all comes down to this: With business still down about 70% from pre-Pandemic levels, six months into the Pandemic, with the recovery of air passenger travel stuck in the mud, airlines are fighting for survival. And they’re going to cut costs and reduce cash-burn in order to survive.
October 1 was an artificial point in time cemented into the CARES Act. It was hoped that by then, the crisis would have long blown over, and that the old normal would be back, but those hopes for October 1, according to airline executives, are not panning out.
Whatever their thinking was at the time of the bailout deal, the bailout money, most of it in form of grants, ended up funding, among other things, the buyout and early retirement packages that airlines have offered their employees to induce them to depart.
Barring new bailouts, the risk of bankruptcy hovers over the industry. If airlines get through this period without a bankruptcy filing, they will emerge on the other side with a lot more debt that will make them precarious structures for years to come.
Despite the huge rally in stocks since March 23, airlines stocks have not recovered anywhere near the levels of the Good Times. The WOLF STREET index of the seven largest US airlines – Alaska, American, Delta, JetBlue, Southwest, Spirit, and United – is still down 45% from the already beaten-down level at the end of the Good Times in mid-January 2020, and down more from prior years (market cap data via YCharts):
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I think this is a classic damned if you do, damned if you don’t.
I have no desire for pleasure flying…ever, I think.
Pleasure flying? What is that?
Nope , it’s called “compromat” the main tool KGB used to achieve their aims, similar to how hostage taking or blackmail work. The banks did this and got away with it (give us the money or we destroy the economy) now the big private corporations are doing it ( give us the money or we fire the people) and even rioters on the streets are taking a cue.
It works all the time when dealing with cowards.
We are slowly evolving into a blackmail society.
Except there is no revenue. When the bailout money stops they either cut 75% of costs or lose the entire company. Easy math there.
The gov’t forced this economic depression on us. It is right that they pay to mitigate it.
The government is not a separate entity
We are the payees
“The gov’t forced this economic depression on us. It is right that they pay to mitigate it.”
So tired of this non-sense argument. The “government” didn’t bring about this depression, the virus did. If we didn’t have the “open up” crowd going nuts and we actually did what we needed to in order to reduce the spread of the virus back in March and April we wouldn’t be in this mess.
Keep in mind most of the world has a travel ban on *US* that’s why international travel is practically non-existent right now.
It is not called kompromat even though it is a cool Russian word. Its definition is completely different. For one the thing you blackmail with should be a secret. With this how opener it is how better it works
Also airlines don’t blackmail with the workers but with the routes that are seen as essential.
The word “threaten” may be unfair. Given current medical news as to re-infection, airborne transmission, etc., they will have no choice. I just hope that no government money is wasted trying to bail out airlines that cannot be saved under the circumstances.
“And they’re going to cut costs and reduce cash-burn in order to survive.”
Yet somehow the C-suite people will still receive every cent of the amount they were supposed to be paid (salary, bonus, stock options) for 2020 that was defined prior to the pandemic, IMO.
That’s because they are parasites, plain and simple.
I don’t mind the bailouts that went to funding early retirement and buyouts. We have a whole segment of people who entered a line of business that we all wanted/needed and through no fault of their own, they’ve suddenly become redundant. I say public funding of these buyouts and early retirements is reasonable up to a point.
Funding C-suite jackoffs though, no way. They are parasites and do not deserve any help of any kind.
Isn’t being rich grand?
There’s no good solution to this.
Maybe the Government should just charter the planes for military usage.
Or everyone should be given a Robinhood account.
I have a great solution – an Uber-type airline. With so many pilots and planes now available, all that’s left is an App and an IPO.
There are already several companies that provide this service. And business is booming for them.
How about the airlines jack fares 100% to help with the shortfall? ?
At least for business and first class, demand’s not as elastic up there.
Or we could cut our military spending by 75%.
Close most of our 880 military bases all over the world.
Etc.
Most sensible thing I have read and simply brushed over by people who don’t realize we flush 1.1 TRILLION dollars down the toilet on weapons of war and the surveillance/military state to support it. Look at England as our future, as we fall into terminal decline. Only a matter of time. As to the airlines, let them go bankrupt because they are terrible compared to the rest of the world. Free yourself from the Stockholm syndrome that allows your abuser to keep abusing you. That is what flying US airlines are like imho. Ymmv.
The FAANG is now bigger than the Fed’s entire balance sheet. Airlines are inside a rounding error.
+1.
Meant FAAMG, clearly. Wait..
MAGFAN
And relative to their cap, apart from Amazon that actually moves stuff besides electrons, they employ very few in the US. So when Fed frets about their stock, which increasingly IS the stock market it has little to do with jobs and lots to do with the ‘wealth effect’.
So it’s a bailout for the employees but administrated by and through the wallstreet corporation. Wouldn’t it be more efficient and cost less to give the money directly to the employees through UI?
Whoa there bub that’s called socialism in America.
See if the money goes to the top (C and E levels) and helps keep the stock price high that’s a bailout(artificially mind you, socialism for the rich real capitalism for us). If it directly helped out the lower level employees? We’ll that would be bad, might as well start calling each other comrade.
I did a little bit of math using the AA numbers and found out a way to spend 1/6 of the amount needed and help those 40k who’s jobs are being used as a bargaining chip. If you took the 5.8B and divided it up among the 40k who will be laid off by years end, then divided it by 6 you could pay each one of those employees roughly $2k for the next 12 months. That would be too efficient though, we need middle men dammit.
Surprised they aren’t pushing the bankruptcy solution. Corporate debt is on a tear, tear up the old debt, and in with the new. Shareholders have taken most of the pain already. Restructure, debt free, and watch those shares fly. Get the market off these lousy one percent up days.
Umm, because management is legally bound to build shareholder value, and BK generally gives shareholders a zero?
Huge swaths of the economy are teetering at the edge, yet the Nasdaq is going parabolic and dragging the S&P along with it.
How much further can the disconnect go?
Wolf – are you still confident in your S&P short?
I am short as well…can’t see what the catalyst for a correction could be in the midst of market euphoria and super-dovish Fed.
I didn’t short when Wolf did, but I did exit the market, briefly. But I got back in shortly after that because I think it’s obvious that insanity is the rule of the day and you can’t profit from investing sanely. I’m up about 14% over my whole portfolio since Wolf’s short. I am on a hair trigger ready to cash it all out when the crash comes, if I can be quick enough.
Where else is there to invest money?
Banks? Real Estate? Gold?
I’m never confident when I’m short. As I said in the post, I hate shorting. This one is starting to get a little draggy :-]
Fed is going to pump this market right up until Nov 3. RH traders are going to ride the money flows. Algos hit the ask for every share offered below the bid. Investment banks front run the muppets, sell shares they buy in AM, to clients whose orders trail the flow. Insiders sell their shares, their corporation buys them back. Buy more on the dip. We don’t know how much asset inflation was provided by the Feds initial stimulus, or the fiscal plan. The Growth/Value debate ends. Buy both. Buffett buys gold, even he is running out of ideas. Dear shareholders: I was tired of holding cash so I bought a bank (BofA his second largest holding).
Ambrose, I actually think the big boys will crash it in advance of the election, but I guess we’ll see.
Wolf, it’s because shorting is like trying to catch a butterfly. Very short time window, I guess. Read it in 17th century book. They had options back then too.
No. When a corporation is insolvent, as these airlines are, the fiduciary duties of the Board and officers are extended to include creditors, as well as shareholders. And creditors are entitled to be paid first.
Airlines and politicians need to stop thinking of COVID as a one-off situation that will fade (like storm impacts) and think of how flying should be improved for a better new-normal world. A world where people now consider it valuable, maybe even a right, to be protected against being forced into unhealthy situations which are known to spread respiratory diseases.
The airlines have passengers wearing facemasks now. COVID’s not the only respiratory disease that spreads on planes, so why not take that whole idea and make it really work for people?
Repeat flyers have already been trained to use the oxygen masks that deploy in an emergency. Why not make “clean fresh air” a standard amenity for each seat, in the same fashion?
Just modify the normal air-nozzle system to accept quick-connect tubing.
Then issue every passenger a reusable, personal, air mask with an air tube and a quick-connect. Could look kinda like the military pilot masks but doesn’t need to be fancy. Could have P100 HEPA filtration so people can breathe even when not plugged into the air plumbing.
Then everyone gets clean fresh pressurized air fed into their own mask when they’re sitting down (which is nearly all the time), and they can detach and wear their mask when they have to head for the toilet or whatever.
Toss in some infection testing and tracing to demonstrate that people aren’t infecting one another on flights, and passenger confidence should resume.
Wisdom Seeker,
I’ll pass on that idea. Today you’re suggesting a personal breathing system for use on airplanes. Tomorrow, you’ll suggest requiring it’s use in public and many other places, from now on forever. Also, it’s still possible to contaminate clothing, so that isn’t full-proof. This isn’t even counting the rest of the airport or everything else touristy at your destination.
The way forward is to improve the human body, rather than shielding it. Invest in research in many things like single-domain antibodies for the future. But, for now we missed the boat on finding willing volunteers to experiment possible mass deployable treatments to CCP-19. And so, we just have to bear the impact until a vaccine is hopefully developed.
It’s important to remember that by the time everyone knew how bad CCP-19 (the WHO failed) really was, it had already spread too far to stop and that the more major efforts to stop it all have major consequences. For instance, the lockdowns resulted in the “protests”, which more than undid any possible benefit from lockdowns (by CCP-19 transmissions alone).
“Why not make “clean fresh air” a standard amenity for each seat…”
I think that in the short term, Wisdom Seeker’s idea is valid. We need our airlines, we need the entire infrastructure. If there’s a way to make air travel safer, in a way the gives people confidence, and if flyers are willing to wear the mask, then no harm done. Until a better solution is comes about, it sounds as good as any. And it will help the industry.
I do not enjoy flying, but it is at times a necessity. Practical solutions, again albeit short term, should be considered. And…if flyers are willing…
I seriously doubt it could be implemented before the end of the year, and the vaccines should be in production before then.
@Thomas: “Tomorrow, you’ll suggest …”
I reject your strawman. I’m not suggesting anything else, just saying that aircraft already have onboard air circulation systems that could be personalized to reduce in-flight infection risks. The solution I proposed could be implemented within months. Airlines that adopted this solution might well attract more travelers since the safety concerns about flight go well beyond COVID.
Wisdom Seeker,
We would have to ask an aircraft engineer to be sure, how long that would take to implement. But, i’d bet it’s alot longer than you think. Even if though airplanes were completely safe, we would still have to worry about everything else travel related. The airplane itself isn’t necessarily, what concerns people the most, even if, it might be their first response about travel concerns.
Right now, the biggest reason why I won’t be traveling this year, is because, of possible quarantine procedures that could effect the entire trip or even work that could be implemented at any time. Most people that probably would travel, simply cannot deal with that. Imagine being on vacation and finding out you’ll have to self quarantine for weeks once you get back, that could be a big problem.
Once you commit to communism there is no end to the handouts. The entire purpose of our economic system is no longer to produce wealth. Its to retain the ruling class in power. We no longer rule by economic power but by military muscle. If you want to see how it turns out just read about the decline of the British empire. At least they were able to keep things in check for a couple hundred years. After the Romans for 1000. We’ve been running things for roughly 90 and things are already getting dicy. Once a society stops saving and only consumes its pretty much downhill from there. Loaded up at 400 per ounce in the early 00’s. The lack of fiscal discipline makes gold purchases a no brainer no matter what the price.
Communism? LMFAO.
Don’t you know that the British Empire was communist? Lloyd George used to take tea with Lenin regularly.
I thought Dopie Donnie said America would never be socialist?????
Certainly beginning to look awfully socialist to me and about 300 million other people.
There is no single investment vehicle that is “always the right choice”. If you think that, you are investing very sub-optimally. The NASDAQ composite is up 13x since 2005 which puts your gold investment to shame.
Nasdaq has done well, but not up 13x since 2005. Lol
If Airlines want free money, gov. should receive an equity stake just like the auto bailouts in 2009.
You’re right. It was around 2600 for most of 2005. Today it’s at 11600. So that’s 4x, my bad, I misread the numbers.
BTW I agree about equity stake 100%.
Gold is up 4,72 x since 2005, beats Nas about less “about” 4x. Gold wins!
Took the red eye on jet blue last night from Portland to JFK. Things feel even worse than Wolf’s stats. When I hit the main concourse I could see all the way to the far end with not a person in sight. Seemed like only buttoned down Asian girls and crazy Russians were on the flight. Middle seat empty, row in front of me empty and they Had moved the seats apart for first class style leg room. I had a high end molded n99 mask and goggles. So aside from Covid risk it was a nice flight
SC
“I had a high end molded n99 mask and goggles.”
If this is what modern air travel has become, the airlines are in trouble…
Speechless.
You are brave Seneca’s Cliff. I was thinking of visiting Portland from Boston wearing a N95 only but postponed for now. Don’t think I will be driving either, it’s far enough by car to require major planing unfortunately.
Kamikaze,
Disclaimer: This is not a political statement, nor a referendum on your comment.
This reminded me of an old ‘Twilight Zone’ episode called ‘The Old Man in the Cave’ (IIRC, it had James Coburn in a guest appearance). The setting is post-nuclear apocalypse, presumably in the US, where a ‘prophet’–no, he wasn’t named Fauci–consults with the ‘Old Man’ to determine what is safe WRT residual radiation. A roving band of military types comes to town ready to party and, eventually, the town’s populace, who had been respecting the Old Man’s guidance, joins in the fun. Of course, the interlopers and all the townspeople, save the prophet, succumb to radiation poisoning. And, the ‘Old Man in the Cave?’ It was a computer.
If you want to see how it turns out understand who started pharmaceutical companies, how they changed the law to suit themselves in early 1900s,how they consolidated to a handful of manipulated companies, owning creation of the problem and the solution means they dictate genetic development of the human gene and therefore humanity and no legal system or person on Earth or at sea is independent enough or powerful enough to challenge this status quo. Scientists are muzzled. Aeroplanes belong in museums compared to the military in use antigrav tech. It matters not that the industry crashes however the reducing dependency on oil is creating confusion, realignment and new pecking order in global influence dynamics and therefore new peaceful futures possible where geneticists are tamed and interventions which manipulate hunan dna are banned.
Airlines have an obligation to cut costs when necessary. They also have an obligation to their staff if they ever want to function again. They are also obligated to provide a safe and efficient service to the public.
What to do?
How about showing some leadership at the top? Reduce all management salaries to the average employee wage and float some options for job sharing and reduced work schedules. It is amazing what can be accomplished if leaders choose to actually lead for the good of their company. Only after all options are tried then look for help. If the service is important for Society then the public may find helping out acceptable. If it is only to help the rich get/stay wealthy then screw them all and try and help the work force survive and/or move on.
From airports, to nav aids, to access and parking, air travel is already one big taxpayer subsidy. Security is a nightmare. People need to slow down and smell the roses.
Hear, hear!
Paulo-
Another of your beautifully simple, thoughtful solutions. You must be Canadian lol.
Likelihood in the U.S.A: 0%
expect the usual. I have a $1 annual salary, but by the way, a billion dollar worth of stock options…. nyuk nyuk nyuk
It’s possible, even likely, that the airlines will find a way to furlough their oldest, highest-paid and most experienced pilots, or said pilots will choose ‘early retirement.’ When the industry starts to come back, the front-seaters are likely to be younger and less-experienced (fewer ‘Captain Sullys’ to save the day).
So lets figure 5 months with the initial $5.8B they got. Works out to be around $38MM/day. I understand the run rates for companies like this but that seems extreme even to me. Now they need that $38MM/day extended another 5 months? Subsidies have to end.
I can’t speak for everybody, but as far as my husband and I are concerned, COVID is just the final nail in the coffin for air travel for us. As much as hub hates long distance travel by car, he’s decided that he’d rather learn to relax and do future tips by road than by air. We’re both fed up with paying the bloated airline ticket prices to experience the joy of the TSA “security screening” B.S., the crowds, the snot-nosed, screaming babies aboard every stinking flight and those awful little packages of cookies or pretzels or whatever they call the “snacks” they serve.
It’s a shame, because the government, the airline execs and an increasingly unreasonable public have come together to wreck what used to be a wonderful mode of travel. I taught Basic Indoc and Ground for a small commercial airline for about five years so I have some understanding of the difficulty of the situation commercial airlines face. While part of it is of their own making, part of is isn’t. The current situational mess is the unintended consequence of several intersecting factors beyond COVID, including out-of-control legal action that resulted in crazy legislation like the current pilot rest rules, plus airline management constantly trying to game the rules for a few extra bucks, plus the physics of flight, plus the well known legislation passed to put money in the pockets of certain legislators heavily invested in companies that make scanning equipment (while telling the public that the TSA operates “to secure our safety”.) Beyond all that is the current overall social mess that’s discouraging travel in general. Where are people going to go to these days? Chicago? Seattle? San Fran? New Yawk? We’ve turned down opportunities to go to all of them this year. Our “leaders” from the White House on down (spare me the lectures – the buck has to stop somewhere!) are busy making sure the biggest destinations are being burnt to the ground. With no reasons to go to these major cities given COVID and teleconferencing, and every reason to stay the hell out of them, just why does anybody expect these formerly heavy air travel destinations to be returning to normal within the forseeable future?
Smileyface,
I could quote your entire post and agree with it. Air travel is quick, but unpleasant. Especially as you add up all the points as you did. And traveling by car can be pleasant, if one has time. It is a great way to see the countryside.
But I don’t know if I’d blame the White House for the MLB looters and the Antifa goons. That’s too easy. It just goes to show that the executive branch is not all powerful. Where are the guvernators? And when you got mayors kneeling with the torchbearers, well…
Let’s be real here. The bulk of the problem w/the Covid-19 pandemic is not the virus itself but the botched response. Please explain to me why DJT and his incompetent administration chose to:
1) Disband the cabinet level Pandemic Response Team?
2) Ignore the Pandemic Playbook (aka Pandemics for Dummies)?
3) De-fund the CDC teams in places like China?
4) Ignore basic science and politicize wearing a mask? (Note: it took that childish corrupt buffoon 6 months slap a mask on his face, perhaps afraid it would smudge his make-up?)?
5) Ignore basic science and say outrageously stupid things like: “….HOAX….”
We’ll be down to 0 cases soon.”
“It will just disappear someday”
etc, etc.
I could go on but you see the pattern. The failed response is what is killing our economy (and several hundred thousand people), not the virus itself.
You think people with the audacity to say “My life matters” and a few square blocks of protests are the big problem?!?
My God, the problem isn’t with DJT’s deadly incompetence but how the GOP voters have un-moored themselves completely from reality.
Examples include: anti-vaxxers, birthers, Q-Anon, infowars & Fox viewers and people like the couple in St. Louis pointing a gun at people walking by with signs to protest at the Mayor’s house.
The same nation that sent a man to the moon and back can’t do basis science (wear a mask) because Sean Hannity and Rush want to “own the libs” and win their stupid culture war.
The entire country will suffer from this madness and DJT’s deadly incompetence for decades to come.
You have wisdom please use it to help us we’re dying here
^^^^^ Well said Smileyface…Amen.
A curious idea occurs again and again, here is one version of it:
“It was assumed that by Sept. 30, the virus would be under control and demand for air travel would have returned”
What on earth would cause someone to believe that? As the CEO of a major airline I assume the guy has been to school and doesn’t believe that ‘herd immunity’ would happen by Sept. So…injections of bleach, what? (Speaking of that magic wand ‘herd immunity’ shouldn’t that have happened with measles by now?)
Moving on, reputable scientists are warning that expectations of a vaccine in 2021 are vastly over- hyped. It would be interesting to know Russia managed to test their version in humans so quickly. The tests being run by a western pharma consist of the vaccine being given to 5000 volunteers with another 5000 getting a placebo. In animal tests, you would then expose the chimps to the virus and see the results. Under the Hague Convention, you can’t do that with humans and this pharma isn’t doing that. It is just waiting to see how many in each group happen to catch the virus. A slow process, which is why pharma testing in humans takes often takes years. (Terminal patients etc, can sign off on experimental drugs but this does not apply to a vaccine)
Dr. Putin tested it on his daughter?
‘interesting to know Russia’ should be ‘know how Russia’
My son’s room mate tested positive today and this is Canada with a fairly low infection rate.
And where did the young man just return from? By Air from Vancouver Island to Edmonton and on to Ft Mac. Hmmmmm.
He has to stay in his room for the next two weeks. Hopefully, he’ll be okay. What a fuc&%ng nightmare this year has become for so many.
Having said this I do not know where he contracted the virus, but he did just get off a plane.
Possibly (probably) catching the Covid-19 bug on an airline trip…is a PR nightmare.
Close to home. Hope he’s OK and yr son is not affected
An Oklahoma public school which opened two weeks ago near me just closed, going virtual until further notice. My school district opened this Monday, let’s see how it goes.
My 94 yr mother in law just tested positive in her nursing home. I think we’re just getting started for real with the virus in my area.
Brant Lee,
Sorry to hear about your mom-in-law. Hope it goes well.
On the lighter side…this thing has cut a swath thru the big wedding biz. My niece was going to get married in June but the swank venue cancelled by order of province so they got their Big depo back. Now the good news: this effing thing was closing in on a hundred grand!
They ended up having a nice small ceremony with just a few (not me and I wouldn’t have gone to the big do)
This may turn out well because their new first house is going to have a basement put under it for 400K !! Needless to say this is Vancouver.
nick kelly,
What the Russians are doing is simply at the same time as the 3rd and most major testing period of vaccine development, they are also manufacturing their experimental vaccine (smart) and giving it to critical workers and certain other people (risky). If the vaccine is determined to be unreliable or dangerous they simply toss all the already made ones away (possibly sanitizing and reusing needles ((possibly, I’m just saying it’s possible))). They aren’t going to mass deploy it, hopefully, before third testing phase is done. It’s risky giving it medical workers before it’s fully proven safe, but, if their gamble pays off, it might allow them to manufacture and distribute more medicines and medical machinery in the future (to other countries), helping them improve their medical system and image in the process.
President Vladimir Putin announced on 11 August that the country’s health regulator had become the first in the world to approve a coronavirus vaccine for widespread use — but scientists globally have condemned the decision as dangerously rushed. Russia hasn’t completed large trials to test the vaccine’s safety and efficacy, and rolling out an inadequately vetted vaccine could endanger people who receive it, researchers say. It could also impede global efforts to develop quality COVID-19 immunizations…
The Russians may be skipping such measures and steps is what worries our community of vaccine scientists. If they get it wrong, it could undermine the entire global enterprise,” says Peter Hotez, a vaccine scientist at Baylor College of Medicine in This is a reckless and foolish decision. Mass vaccination with an improperly tested vaccine is unethical. Any problem with the Russian vaccination campaign would be disastrous both through its negative effects on health, but also because it would further set back the acceptance of vaccines in the population,” said Francois Balloux, a geneticist at University College London, in a statement distributed by the UK Science Media Centre.
‘Ridiculous authorization’
Altmann is concerned that the vaccine could cause people who receive it and are then infected with SARS-CoV-2 to experience an exacerbated form of disease that occurs when antibodies generated by a vaccine carry the virus into cells. Another problem could be an asthma-like immune reaction that became an issue with some experimental vaccines against the related virus that causes SARS (severe acute respiratory syndrome). To spot these reactions, researchers would have to compare results from thousands of people who received a vaccine or placebo and then might have been exposed to SARS-CoV-2.
“It’s ridiculous, of course, to get authorization on these data,” says Svetlana Zavidova, head of Russia’s Association of Clinical Trials Organizations in Moscow, which works with international pharmaceutical companies and research organizations. Without a completed phase III trial, Zavidova also worries that it will not be clear whether the vaccine prevents COVID-19 or not — and it will be difficult to tell whether it causes any harmful side effects, because of gaps in how Russia tracks the effects of medicines. “Our system for safety monitoring, I think, is not the best,” she says.”
I double checked, what I said above is still the most likely move they are making, the Russians may change their mind on who to give it to depending on early results in the stage 3 trials though.
I don’t think he meant there would be a vaccine or herd immunity by September 30th, but that the number of active cases would have fallen and leveled off like it has in much of the rest of the world, but instead we rushed out to reopen the economy, much of it in places where the coronavirus had not yet plateaued and subsequently created a massive spike in cases only previously seen in NYC. Having said that, considering how many people were thrown out of work during the initial lockdowns and the fear of getting sick on airplanes, I think it was way too optimistic to assume people would just hop onto airplanes like they did just prior to the pandemic.
Airlines are dead.
What’s hilarious is that Sales force is supposedly ready to chop 1K to 2K jobs. I think today, their stock popped by 25%, talk about greed and tone deaf.
But you know what… it’s good for the stock, less cost = more income = better EPS. At least, it’s rational why the stock is moving up.
If they can get rid of the fat dude in charge, it would be even better for the EPS.
The ‘fat dude’–Mark Benioff, I presume–and all the bubbleheads on TV attributed the pop in CRM to a blowout quarter and CRM’s pending inclusion in the Dow. I’ve heard nothing of layoffs, a normal course of business these days for even thriving companies. That doesn’t mean they aren’t happening, but all the talk is about the quarter, the forecast and going into the Dow.
ps. Benioff isn’t going anywhere. He’s the founder of the company–after ‘rebelling’ against his boss Larry Ellison at Oracle–the CEO, the Chief Executive and (probably) the largest shareholder. He gives generously to worthwhile charities, including children’s hospitals, other hospitals and medical schools. He is a very smart man–at one time, he was rumored to be getting bored of being a self-made billionaire and ready to hand the company over but, obviously, that didn’t happen–and is considered the creator of the entire ‘Software As A Service’ (SaaS) business.
The future for air travel is a one-seater with stick-controlled elevator going round-and-round in circles at an amusement park. Twenty-five cents a ride, six foot spaces while waiting in line. Fly now, pray later!
Why is everyone so scared of bankruptcy? The government could provide direct payments to laid off with a requirement to retrain. The golden years for air travel is over.
Golden years? When was that? The last 50+ times I flew, it was like being stuffed in a sardine can and having a seat back shoved in your face when attempting to drink a hot coffee in a paper cup.
Maybe back in the early 1980’s when I started flying for business every week for the next 35 years it could have been considered “golden” (more seat room, a hot meal, actually treated like a customer…etc).
Let them go BK, it’s the American way!
Completely agree with you aa, on both your points:
For me, the golden age of air travel began in the mid 1950s, when parents took me and sibs to cuba from tpa; sure it was a DC-3, but we were dressed well (for the temps),,, everyone was polite and friendly on and off the plane both in tpa and Havana, and we did not feel like sardines as you say and as I too felt up to my last flights in 2017, when I said enough already and began driving across USA instead of flying.
The end of the golden age for me was in mid 70s/early 80s, when one could catch the red eye (for $100, or sometimes less, cash at the counter 20 mins before loading) either way from tpa to lax, and have a full row to sleep on,,, or perhaps even find an appropriate and willing fellow traveler to snuggle with, per many reports, eh?
Of course it was a different world then all together, as folks could hitch hike across USA in 3 days sometimes, sometimes a week, with no harm no foul.
Wait, the golden age of air travel was when it was heavily regulated?
Shocked!
““It was assumed that by Sept. 30, the virus would be under control and demand for air travel would have returned. That is obviously not the case,” American Airlines CEO Parker and President Robert Isom told employees in a grim message on Tuesday.”
No. If you said you assumed that, you are either stupid or you were lying. One of the airlines (think it was American) announced in June, when flight throughput was about 20% of last year, that they were “expecting” 55% in July. That was obvious BS, and I said so at the time. But of course, their stock skyrocketed that day, which was probably the point.
The virus MAY have been under control had Americans been willing to cooperate for the greater good. But it was clear by May that that was not going to be the case. I’m convinced at this point that the virus will burn itself out before a vaccine is ever invented. Americans are making sure of that.
This is irrelevant to the topic but conceivably timely.
Chase Bank Claims Department said they would refund a charge for a fraudulent check cashed against me if I sent certain documentation. I sent it but have got no refund within the period they said to expect. It has now become impossible to phone Claims Dpt at any hour. I am put on hold forever waiting for someone to answer. It is strange. Is it conceivable that there is an immanent financial crisis? (Or maybe they had virus outbreak at their call center?)
They probably just cut staffing in order to lower their expenses and show better quarterly earnings, no?
Wolf if you are serious, there is no problem calling customer service. Only claims dept.
What I’m saying is that the reason you’re not getting through to them on the phone is something other than an “imminent financial crisis.”
I would write them a letter stating your facts and send it certified, return receipt.
And then what?
Wait, but your statement of fact is on file (somewhere, you hope). Maybe someday people will begin answering phones again…..
I wanted to go to a Mexican border town south of Yuma to have dental work done, but am grounded due to COVID-19. They can not do that type of work with zoom.
I was already an airline apocalypse preacher in 2019. Video conferencing, virtual entertainment, collaborative online tools and such were replacing the function of airlines. Businesses aren’t going to pay through the nose for travel expenses if they don’t have to, and consumers won’t either.
And then we got a *respitory pandemic*.
How anyone thought airlines were going to bounce back is beyond me.
David, I’ve gone there for many years, the largest population of Dental clinic in the world. I’ll bet it’s a ghost town the Winter, if I decide to visit.
Why are you the leaving the greatest country in the world….. the one with the greatest healthcare system in the world….to go to Mexico for dentistry?
I went to Poland for a root canal once They gave me vodka for anestesia
More evidence of air carriers falling off the cliff……
https://www2.arccorp.com/articles-trends/sales-statistics
Rather than subsidize “dead’ business models, like airlines today; maybe its time we actually looked at the importance of having a functional safety net. you know, when the shit hits the fan, like now. it might keep folks from rioting, looting and starving to death.
The bottom 10 percent have been shit upon for decades at least for being lazy good for nothings. well, it turns out that same “bad luck” can happen to the middle class too.
Welcome to life. a little compassion for your fellow citizens would go a long way toward a more people-friendly less all-about-me society.
NO one needs a hundred billion dollars, but there are millions who need a few thousand. . .
Rioting might get some local results but it will also get the Pres reelected. Maybe that is the plan.
Didn’t I say before?
Airlines should just invest in the stock market.
It’s a can’t lose game at this point. Sure occasionally it will correct 10 to 20%, but the overall direction is UP.
I have no desire to be molested even more than post 9/11 en route/post route with the myriad of “Safety” Measures…
My view is that if you are an airline employee you should maybe take the voluntary redundancy while you can. Later offers of voluntary redundancy are likely to be worse, and if the airline goes bankrupt you may well get nothing. Can’t see airlines coming back to profitability since business travel ain’t coming back imo.
Exactly. Corporate CFOs have seen how much money they’re not spending on useless business travel for “client development,” and in my opinion, travel will be limited to very senior people for key transactions. The days of flying random consultants and other middle level people across the country for a 3 hour meeting that can be done via Teams or Zoom are over
Gold is up 4.72 x since 2005, gold beats Nas “about” 4x.
Gold wins!
We pay for their runways, infrastructure , security, ATC , etc,etc….Put them in bankruptcy for a mercy killing of management and start over. This is an opportunity. All the “stuff” is still there . Hey, maybe the new management might give a shit about how to grow to 40% by talking to the flying public about them instead of cry babying to the FED for more breast milk. They have hung on the teat long enough. Time to get to work. Get’er Done.
When they mandated masks I stopped flying.
When fremont street truly opens, I’ll break down and finally buy a mask.
Snag a 4Q package.
Good for everyone else. Thank you.
Did you stop driving when seatbelts became compulsory too?
Swissbrit, bear in mind that a difference between wearing a seatbelt and wearing a mask is that wearing the former is principally for self protection and wearing the latter is principally for the protection of others. It appears internally consistent that acting on a value set that focuses on oneself might cause a person to embrace the seatbelt and reject the mask.
But if everyone wears a mask then everyone is protected right? So in the end it’s protecting yourself. Americans can’t tolerate an extra step. Convenience before anything else?
Dumbest country in the entire world. Everyone else has legitimate excuse i.e. they lack money for education, etc.
Game theory, eh, MB? I suspect the variety of extant subcultures precludes the possibility of arriving at a common understanding.
This has nothing to do with “Air Lines”. It is a Corporation asking for support. Musk and everybody else who was so concerned about Evil A.I. should realize it is already here…a creation of our own doing which cannot be killed since the day it convinced the Supreme Court to declare it a living entity. There are no real bankruptcies. It will replace CEO’s, investors and lenders at will if they threaten it’s survival, and there are no multiple entities….there is only one which will merge anything it has to, use any technology it can bring about further control, and replace us all with machines when the need arises. This entire event is being used to further it’s own ambitions for survival at any cost. The entire economic system may be on the edge of re-arrangement and we are no longer in charge…it will sell us out if it has to. It is crushing every “out option” right now, destroying savings, falsifying investment potential, and it will get metals after it is done with the money systems. Game over. No big red off button.
It’s hard to feel sorry for airlines. They’ve been treating their customers badly for decades. Long lines, uncomfortable seats, price gouging anyone who can’t plan far ahead. Now they actually charge extra for a piece of luggage or an assigned seat.
They actually have software that changes their prices from minute to minute. Try that with bottled water and you can go to jail. But these crooks get away with it daily.
Exactly Macro. The list of airline “unpleasantries” is far too long, and the airports are no better. It varies from city to city, but the list of airport issues include expensive and inconvenient parking, long walks to the terminals, long waits/lines for bag check, surly airline check-in personnel who seem obsessed with their computer terminals, waiting in another line to get through TSA and then another hike to the terminal itself where one gets to wait yet again.
As you said, difficult to feel pity for a system and industry with service this poor. They’ve gotten away with it up to now simply because they can. I don’t support a second aid package to the airlines.
Canny move by the airlines, extorting the gov’t knowing Trump is desperate about the unemployment numbers.
OTOH maybe gov’t will just extend the moratorium on layoffs.
Anyway the airlines has been over-saturated for decades, industry benefits if they shake out the weak players.
AMTRAK in the air cometh
Predicted back in the ’70’s and they called it “Flytrak”.
I stopped flying in 2007 when AA lost my luggage on a simple business trip from National in DC to St Louis. The outsourced luggage people had no way to tract where the bag was, and they could not even speak English. They told me that cargo had priority and that passengers were not their concern, and the pilot could throw you off the plane if he wanted to. He was like a dictator. I was stuck in St Louis in mid-Jan (minus 10 deg) with no winter clothing and my prescriptions were in my luggage so I had to go off them for 3 days. On the way back a group of Pom-pom girls were on a field trip and practiced their act in the isles of the cabin in mid-air. No one said a word. That was my last trip on an airline. I cannot imagine what its like now.
re: “… the pilot could throw you off the plane if he wanted to. He was like a dictator.”
As it should be. The PIC–Pilot-In-Command (note: ‘Command’)–has absolute authority in an aircraft, private, commercial or airline, just like the captain of a ship. S/He’ll be held accountable for every aspect of the flight; if the wings fall off the aircraft for no explainable reason, the NTSB will at least partly fault the PIC for not knowing the wings were going to fall off. Note the pilots usually impact the crash site first, and they usually don’t survive (UA Flight 232 notwithstanding).
This is very sad. I’m only a commercial/private pilot, but I knew many aspiring airline pilots, some of whom were my instructors, and I know that this career choice requires extreme dedication. Air travel has always been boom-or-bust, but only a few months ago the aviation mags were writing about a ‘shortage of pilots’ and ‘this is the career opportunity of a lifetime.’ Many would-be airline captains mortgaged their future to enroll in dedicated flight schools, or worked 24/7 to eke out a living instructing to get the required hours (as an aside, the FAA’s ruling of 1,500 hours of PIC–Pilot In Command–time is bogus; I’ve known many excellent ‘low-time’ pilots, and a few ‘high-timers’ I wouldn’t fly with if I could avoid it). Now, those dreams are largely trashed and, in a few years, assuming travel by air recovers there will be a ‘pilot shortage;’ it wouldn’t surprise me if few choose such a pernicious life path.
Back this up several odd decades and you’ve just given an apt description of the variety of steam locomotive engineers and their future in the then growing diesel-electric generation. “Walk/Don’t Walk”–still flashing words of wisdom everyday on most major corners.
Bailing the airlines out is not protecting jobs but instead protecting the shareholders and bondholders. Heaven forbid someone lightens up and says go ahead and declare bankruptcy. Most of the jobs will still be there post bankruptcy.
Calofornia Bob missed the point.
In 2007, 6 years after 911 the airline AA had no way of tracking a piece of lost luggage even though it was bar -coded. The airline’s answer was for me to wait for the next flight and see if was on that one. This ruined my trip to say the least. This was not a good time for some flunkee airline employee to start lecturing me about the pilot’s authority.
Screw them.CEO WITH BIG BONUSES AND BOUGHT BACK STOCKS FOR THEIR BENEFITS. THIS BAILOUT STUFF WILL NEVER STOP.LET A BETTER COMPANY TAKE THEM OVER.CURRENT MANAGERS ARE WORTHLESS
Each day the TSA publishes Total Traveler Throughput, which is how many people went through a TSA checkpoint on that day. And they publish Total Traveler Throughput for the same weekday, 1 year earlier.
The March 1, 2020,throughput was 99 percent of the 2019 sameday throughput. By April 16 the 2020 throughput was a dismal 3.6% of the 2019 sameday throughput.
This was the bottom and the throughput number bumped up slowly until it reached 13.5% on May 25 and continued to bounce slowly to the largest percent on August 23 at 33.7 %. By August 26 the number had bounced down to 24.6%
I started to track these numbers with the belief it would provide an indicator of when business travel is resuming. I think the real indicator here is that those who fly the friendly skies may soon be experiencing some very significant capacity shrink.
Neil Shotton,
“Each day the TSA publishes Total Traveler Throughput, which is how many people went through a TSA checkpoint on that day…”
Yes, see the first chart above, the one after the second paragraph :-]