But another $25-billion taxpayer bailout is tucked into the stimulus package. The stock market loves bailouts and hates the effects of capitalism.
By Wolf Richter for WOLF STREET.
The best day – meaning the least catastrophically worst day – in terms of air passengers entering to security zones at airports to board flights during the Pandemic wasn’t yesterday, as the financial media wanted to have us think, but July 2, when the count of TSA airport security screenings was down by only -63.4% from the same weekday in the same week last year, and on July 3, when the count was down by only -67.1% from a year earlier. That was over the extended Independence Day travel weekend.
Now it’s peak summer travel season. Yesterday’s TSA screenings – Sunday being a peak travel day – reached 831,789, the highest during the Pandemic. But it’s peak travel season and Sunday is one of the peak travel days, so last year on that Sunday, the TSA performed 2.65 million screenings, and this Sunday’s was down by -68.6% from Sunday a year ago. And the year-over-year decline has remained roughly in the same range since the beginning of July:
People are traveling to go on vacation. But they’re driving. All kinds of lodgings near or in national parks are booked. People want to get out and do stuff, and they have the stimulus money and the extra $600 a week in federal unemployment insurance. Early indications are that they’re driving more for vacation purposes than they did last year. That’s the big thing. But flying is still an iffy proposition for most people.
The seven-day moving average of the daily TSA screenings, which irons out the day-to-day ups and downs, has remained about the same since its best days since the beginning of July – “best” meaning least catastrophically down days. This indicates that the recovery of passenger volume has stalled since the beginning of July and is still terrible, terrible, terrible for the airlines:
Nevertheless, this situation caused the financial media to hyperventilate in an effort to pump up the shares. For example, CNBC reported breathlessly:
No capital-intensive business, such as an airline, can survive for long with roughly three-quarters of its business wiped out overnight, unless it undertakes a large-scale trimming-down, and unless it gets lots of financial help from all corners, including central banks and taxpayers. And that’s happening with airlines.
That’s the part in CNBC’s headline that nailed it: Another $25-billion bailout has been tucked into the next stimulus package.
It comes on top of the prior $25 billion in bailouts, mostly grants, that were designed to preserve airline jobs until September 30. Airlines have since told over 70,000 employees that they could lose their jobs after the deadline, and have incentivized them to leave voluntarily before the deadline, using a range of incentives, from buyout packages to early retirements.
Today, the WOLF STREET airline index of the seven largest US airlines – Alaska, American, Delta, JetBlue, Southwest, Spirit, and United – jumped 7.0%. Since word of the second $25 billion bailout package started circulating last Monday, the index has surged 15.7%. But it’s still down 44% from the end of the Good Times in mid-January 2020, and down a whole bunch more since January 2018. That 15.7% gain since last Monday is the little thing sticking up on the right of the chart (market cap data via YCharts):
And since last Monday, Boeing [BA] has jumped 13%. Boeing is going to be kept out of bankruptcy no matter what.
That’s what it really boils down to for the airlines: Hopes for another $25 billion, mostly in gifts from taxpayers.
Americans will gradually fly more, but it will take years before passenger traffic in the US recovers to levels before the Pandemic. It took years after 9/11 and after the Financial Crisis before air passenger traffic was back to the old normal.
But this time, the damage to the industry is a lot more profound. And the lucrative business-expense-account travel segment may have permanently changed, and might not fully recover even in the years to come. Airlines have acknowledged as much and are preparing for it, and they’re trying to trim down to a size that allows them to survive in this environment – but any series of $25-billion gifts sent their way is welcome.
And the stock market loves bailouts and hates the effects of capitalism where you could actually lose some or all of your investment when something goes awry.
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We have no desire to get on an airplane. My wife’s family lives up in the Bay Area so we’ll drive to see them but that’s it. Our motorhome has been sitting for a while and we’ve been busy getting it road worthy again. The wave of the travel future will likely be where most people can reasonably drive to from their house.
Go to any REI or RV lot and they can’t keep goods in their inventory.
We’ve camped and hiked everywhere around Southern California so are turning our attention to the obscure places we can “boon dock” in and stay away from all the new crop of campers.
On a side note, we’ve no desire to get on a cruise ship either. Most all cruises begin and end with an airline flight. Both of these sectors will survive but only through massive discounts; at least until there’s definitive proof that this virus is either not as bad or some sort of cure with definitive proof of efficacy comes into play.
The Bob,
What I have noticed with your topic of RVs are the overnight stays in rest stops. It used to be overnighters would be rousted No longer. And rest stops in BC on secondary highways are usually on a lake or river, have toilets, and can be quite nice. No one seems to care, anymore.
A little tip we discovered on boondocking in US when we used to travel down under. If you’re getting stuck check out rural air strips. There are lots of them in the US (lots!!!) and there is always a hangar to park behind. Civil aviation folks are usually very friendly. If you get rousted just tell them you like airplanes. Plus, there’s always a sign for directions and by definition they are quiet places to park. You can always fudge and mention a ‘friend’ you think keeps his 172 around here. :-)
We’re seeing more jets in the air and assume they are Seattle/Portland for Alaska. For awhile there were none, but this last month they have increased.
Great advice. Thank you. With all the rigs being sold there’s gonna be a lot of folks crowding the usual places. Remote camping in Death Valley, southern Utah, Arizona, etc will be the way to go. Bring a jeep and get away from the masses.
Just flew on Frontier from Trenton to West Palm beach….great flight as it was just me a two crickets. It was actually a bit creepy to be on an empty flight.
What’s new? The media was practically falling all over themselves praising Uber’s result.
With media like that, who needs enemies?
So, let’s assume for a second that there is no vaccine. I wonder what happens then. Would the current state of affairs persist?
Remember, there is no vaccine for MERS, no vaccine for SARS, no vaccine for HIV. The last is in spite of 25+ years of trying with billions in funding. Those are just the more notable ones, never mind stuff like Ebola or any one of dozens of other deadly viruses. Relatively speaking, C19 isn’t quite that bad. Our reaction to it has been like the plague. Thank you, media.
The only thing worse than no hope is false hope. (again, thanks media for hyping up any little bits of clinical trial on the one hand and for making C19 out like a death sentence on the other) Yes, this last bit was a bit of hyperbole…
In that case, either people adapt to the reality of C19, or we can kiss whole swaths of industries goodbye. Starting with travel.
But it’s all good, stock market needs to keep going up. Let’s go pump and dump.
I think Herman Cain set an example for everyone.
How old was poor Herman again?
Too young to die.
What??? You want to live forever…
Ok, being a little less flippant here, I think the guy was in his 70s right? Into the danger zone I would assume for C19 related death.
One hopes that he was taking all the precautions, but let’s face it, the only way to be perfectly safe from this is to cut yourself off from all contact. Everything else carries a degree of risk. The alternative is to tell people not to go on with their lives.
There is reasonable in terms of making sure that seniors are better protected, making sure the guidelines are followed, but even then I don’t think you can avoid the fact that C19 is a fact of life.
If we get a vaccine, great, but if we don’t, would you expect the current state of affairs to continue indefinitely? That’s not really practical for a large swath of the population.
MCH,
Herman Cain was in good health and there is a pic of him sitting up front at the Tulsa rally, all smiles.
You say “C19 isn’t quite that bad” — after there have been 5 million cases, and 160,000 deaths, and just today 100,000 children infected after 2 weeks, of ill thought out policies of back-to-school in the US.
ALL this in 8 months because of the dereliction of duty from POTUS, and GOP sycophants.
Didn’t ever think I would ever hear a statement like this of — “C19 isn’t quite that bad”
@ Martok,
Very convenient to ignore the whole sentence, or the preceding sentences, isn’t it?
Relatively speaking, that’s what you forgot to quote, or the lines in front of it about there being more deadly viruses. Meaning the mortality rate is worse compared to some of the other known diseases.
Yes, in absolute terms, the numbers in one year from C19 is much worse. And no one is disputing the bungled handling of this thus far, because there is not a similar experience from which to draw comparisons. And without injecting politics into it, just consider CA, one of the first to start locking down. (certainly true of bay area) In the end, it didn’t stop the progression of the virus, and just slowed it. Why, because there was never enough scientific data early on to make sound decisions.
The whole point here is all about how sustainable this cycle of lock down is in the long run. If there isn’t a vaccine, what happens then? Repeat this lock down every time a new spike of cases emerge? For how long, and remember, by then it’ll be too late probably because there would’ve been time to spread C19 for some period ahead already. Identifiable cases is a lagging indicator. You can slow the spread a bit until the next time. Repeat that over and over if there isn’t a viable vaccine, and it is unsustainable.
MCH,
Your statement stands – “C19 isn’t quite that bad” and undeniable.
We have 5.1 million cases and 163k dead because of negligent decisions made by POTUS.
The polls have indicated the American public has blamed the crisis by the inaction of this administration, and ignoring experts, scientists, CDC, WHO, with flippant remarks from POTUS.
You say “there was never enough scientific data early on to make sound decisions.”
That is wrong too, and Bill Gates warned POTUS, and so did Obama with a 69 page action report in the case of a pandemic, in 2017.
Afterwards on Feb 9, 2018: Trump signs bill that cuts $1.35 billion in funding for Prevention and Public Health Fund at the CDC, and fires many key health experts before 2020, a fatal decision that the American populace will have to deal with for many years.
In the final analysis – why is it that America is #1 as a failure to handle C19?
Answer, Dereliction of duty by POTUS/Sycophants mindsets who have infected the populace with anti-science, anti-experts, anti-mask wearing way of malicious thinking, and this is why the C19 is still out of control.
@MCH Gosh, where do I start?
1) Covid is different from the other viruses you list as being worse because it is far more transmissible person-to-person than any of the others. A lower case fatality rate isn’t “not as bad” when the number of cases is astronomically bigger.
2) There’s no evidence that the cause of demand’s coma is “lockdowns”, especially in the travel industry. No lockdowns are preventing people from getting on airplanes now, and yet, they’re not getting on airplanes. Same with retail. Once the stores started reopening after the initial lockdown, nothing has stood in the way of customers returning except the customers’ own individual choices not to return.
3) I’ll assume when you say it’s reasonable to protect seniors, you mean it’s reasonable to protect people who are at higher risk for serious complications if they get covid—people over 60, those who are immunocompromised, and those with diabetes, heart disease, and obesity. Of course, spelling out that larger population for whom covid is worse than “not quite that bad” does weaken your implicit argument that protecting the vulnerable is a small thing compared to returning to the Before Times.
4) Specifically about the elderly: How exactly do you propose to protect seniors without bringing the pandemic under significantly better control?
Perhaps you think most old people are in easily-sequestered environments like nursing homes or assisted living. But that’s not true. Most of us old folks are still running around loose in society just like younger people.
Is there any way to protect us, and other high-risk people, other than the same way to protect everyone else—mandatory masks, physical distancing, and avoidance of crowds, especially indoor crowds? Yet you seem to be arguing against that kind of widespread anti-pandemic lifestyle…
5) Last but not least is your insistence on the false dichotomy “either people adapt to the reality of C19, or we can kiss whole swaths of industries goodbye.” Both can happen, and both are happening now. People ARE adapting to covid—by staying home more, by wearing masks and expecting others to do likewise, by taking car trips instead of airplane trips, and so on. AND ALSO, at the same time, we are seeing the airline industry getting chopped down to a quarter or less of its current size, for example.
It is not, and never has been, “attend to covid OR attend to the economy”. We can’t disentangle them. We have to attend to both at the same time.
@Martok,
Yes, my comment stands as a whole, not the convenient part you pick out to the exclusion of all else. Not getting into the debate on politics, except to say that CA had as early a start as you can get, and we are still here in the same boat. Newsom did about as well as anyone and still we aren’t that much better off in CA. Sure, you can blame the rest of the country for it. But how much c19 is actually due to interstate travel after March? I don’t think anyone knows. But if I were to guess,
If you want effective, like I said elsewhere, be like China.
As for scientific advice, you mean advice like these in the early stages when there could have been still some degree of meaningful containment.
“No evidence of human transmission.” WHO.
“No need for masks.” Fauci.
Just saying… one shouldn’t ignore history in favor of “the narrative.”
@ Cas
Uh, yeah, you are right, you have to attend to both together, but remember the current state of affairs is not improving until one of two things happens. A successful vaccine (not a guarantee) or herd immunity (takes a long time).
Bottom line. Virus isn’t going away no matter how much lock down you go through.
MCH,
You can’t waffle on your absurd statement that “C19 isn’t quite that bad” – you own it.
As far as Dr Fauci saying that masks weren’t required you conveniently forgot to mention that he said that because there was a lack of masks for front-line health care workers at that time, and he also stated if conditions change for the worse then all should wear masks.
Why? – the slashing of funds by POTUS put us in that situation, and made us vulnerable by the lack of masks, ventilators, and supplies, along with the removal of key US health officials both here and in China.
This irresponsibly placed this country in a unnecessary precarious situation, – clearly a dereliction of duty.
Your statement – “No evidence of human transmission.” WHO.”
It was true on Jan 14, 2020, but was corrected on Jan 20, 2020, as China confirmed human-to-human spread, a total of 6 days, – astute people were aware of this.
POTUS had plenty of time to implement the Obama pandemic plan after Jan 20, 2020, but choose to ignore it, and ignore all the warnings, and claimed C19 is nothing, or it’s under control, it will go away, or preposterously called it a “hoax”.
His malicious statements and actions far outweigh any honest pre-pandemic assessments of dedicated experts, doctors, and scientists, as he played golf and held his hate-filled rallies.
A real leader would have been prepared and all health agencies would have been funded and all supplies would have been available to meet this pandemic, however this POTUS put us on a path to disaster by pure incompetence.
He has set the stage for anti-science, anti-experts, anti-mask wearing, and when a vaccine is available the anti-vaxxers, and conspirators inspired by POTUS will have us fighting this for many years.
Was it a good or a bad one?
It is considered bad, but when you consider his age of 74, he was right around the life expectancy in the United States. This means that he lived a good long life.
Jessy S,
Nonsense. You don’t understand how life expectancy works. There is life “expectancy at birth” and then for each year as you get older. For a man in the US at age 74, life expectancy is another 11.76 years.
Here are the actuarial tables were you can inform yourself and check your own life expectancy at your current age:
https://www.ssa.gov/oact/STATS/table4c6.html
Thanks for the actuarial info link Wolf,
Confirms what I posted about 5 mins earlier somewhere else on this thread.
What I had seen before covid included the average as is shown in the first graph of your link, but also included more information by declared ethnic groups, as I mentioned.
It will be very interesting to see how the ‘current year’ life expectancy changes after this virus has run its course(s) through the populations, as it certainly will do sooner or later based on what has happened so far.
And to be clear, this virus is not just the ”Boomer Remover” that it was considered to be early on, but is wreaking havoc on people of many ages, with some young folks apparently destined to deal with it for many decades. And, in the younger cohorts, various ”co-morbidities,” especially the big three, appear to be just as deadly as with the older cohorts.
His health was not considered excellent. His example of not wearing a mask is another thing. He was treated for cancer a few years ago. There may be other issues here as well.
Cancer in 2006 before his presidential run—14 years is much different that a “few” years ago.
They seem to refer to Covid 19 as SARS 2. I’m pretty sure they just discontinued the SARS vaccine quest when SARS dissipated. The efforts and knowledge gained with SARS vaccine development are now the foundation for the rapid development of what is going on with Covid. The brightest minds in the medical world are doing their best and we just have to listen to the experts and not the politicians.
I’m going to stay hopeful. Have to. We’re adapting okay in Canada, but today everyone I talked with was depressed. Everyone. I just finished up fishing after supper. Caught a salmon and lost two others. Still depressed about our changed life even though shouldn’t be. Time for a Crown Royal and some music. That should help. :-)
Wolfstreet has been a Godsend, (as my mother would say). Thanks Wolf, Nick, and MC01 for your work. Reading WS and comments has been a real plus these past few years.
SARS and MERS killed a tiny fraction of this and didn’t attract one 100th of the money for vaccine development as this. And HIV is a completely different kind of virus, the comparison is not useful.
If money was all that was needed, we could just ask Jay ‘Brrr’ Pow to print a vaccine for us.
Spoiler: there won’t be an effective vaccine. The G and MSM will sell us on whatever WS wants RobinHooders to buy that week. Americans don’t take well to vaccines anyway, especially ones that are not even proven.
Alright, alright. It’s not like he could have single handedly stopped it anyway. Still… When the leader calls reality a hoax because he refuses to believe anything he doesn’t like and then indicates he has no idea about the ingestability of bleach or the merits of internal irradiation. No Mr. President the flu vaccine won’t work on covid-19… No Mr. President not testing for cases doesn’t mean they don’t exist… I mean how clueless do you really have to be (act? Is he a genius trying really hard to look really stupid?) in order to be a president these days?
Flu season is just finishing up and our state had 105 flu deaths this year and 1,504 covid deaths.
And of course all those Covid deaths are legit. WTFU
Contact and trace can do a lot to reduce risk and allow a return to a more normal life including air travel. Most of the developed world is doing it fairly successfully except for on large standout that appears to be incompetent….
There is a developing second wave in Europe and if you look at deaths per million, the US is better off than UK, France, Italy, Spain, and Belgium. Contact and trace is a media fantasy that applies in places with a few hundred cases a day like Japan and Australia.
To be truly effective at contact tracing, you need to be like China, stick it on the app, marry compliance to social credit score, and be absolutely ruthless in applying efforts to ensure quarantine.
In other words, it’ll make the dumbos go ballistic and even the jackasses might blanch. But that’s what you need to make it effective. Otherwise, you are basically at the mercy of the time lag associated with the contact tracers actually reaching a suspect case in time and warning all of the potential contacts.
And a smaller standout – the UK.
You mean with most of the developed world (Greater) China and allegedly Cuba. EU sucks at it and US seems to be almost actively supporting it.
I think there are vaccines for MERS & SARS but it is a bit idiotic to give vaccines for diseases that don’t circulate. Vaccines are very safe but still have a very small risk. Even if it is just the injection itself. So shouldn’t be given if it is not useful.
HIV is from an societal point of view not a big problem but could with ease be removed from the population
There must be a lot of TSA “security” staff just standing around collecting checks for doing nothing? Security theater it has always been and will always be at a great cost of public dollars. I do have 30 years of security experience and every DHS Red Team that tests the system always wins. Perhaps this would be a good time to scale TSA back for the next 3 to 4 years, since there will not be anything remotely approaching pre covid flying for the foreseeable future. Give the savings to the people who need it most; the taxpayers.
You want to save the TAXPAYER money? Let companies go bankrupt! Not only does this continual bailout add to my debt load it’s causing inflation that’s going to wipe out any value my pension has. And now they’re saying that Social Security is going to have to be “re-vamped”. Good to know that the fund I paid into, for 40 years, is going to fail because we need to save Boeing. I’ll rest easier now.
Amen. No more corporate welfare. No more Socialism for the Capitalist and Capitalism for the rest of us. Marx was right.
The proposal seems to be, take a payout and put it in the stock market, where they will skim it down to zero. They will also push people out of Medicare into expensive private insurance.
The payroll tax deferral/cut is a bad deal on steroids. It will land up affecting the benefits of future retirees, especially those just a few years away from retirement. Most retirees earn the most at the end of their careers. Eliminating the tax will decrease the credit they earn for retirement.
Petunia –
The payroll tax deferral is currently scheduled for only 4 months – not a large impact.
I strongly support defunding DHS and all the other alphabet Federal police forces.
Wolf, another great article. One thing that bothers me about what the media portrays is the term “taxpayer bailout”. It’s simply not true. The government doesn’t send a bill to everyone and say, “this is an additional tax you owe for your share to bailout the airlines.” The government basically keeps taxes the same and then just prints money and issues bonds to bail them out. We don’t actually get billed for it. The US government has ran a budget deficit for 46 of the last 50 years (they lost money). They’ve survived by issuing debt and printing money. The only price taxpayers really pay is the money they hold gets depreciated in value and our standard of living is dropping (2 wage families can’t even make it). The people that will end up paying for all the bailouts will be the US Government bond holders when they get defaulted on. Our debt is so large (over $25 trillion and growing) that it simply cannot be paid back by taxpayers. It’s just too large now. Bondholders have been duped by history’s greatest Ponzi scheme. Social Security is another giant Ponzi scheme. This time however, it was legal and no one is going to prison. Just don’t be the fool holding the bag when either of them implodes.
If you owned a company that had lost money in 46 out of the last 50 years and you went to a bank to get a loan, would they give you one? If I was the banker, I’d laugh at you all the way back out to the street.
The state does not loose money. They spend more money than the receive, but that is also true of many profitable companies that their debt increases yearly
Precision Cast Parts, the company that casts titanium jet engine parts , has announced they have laid off a total of 10,000 employees worldwide. If this goes on for too long we will lose the skills, tools and know how to build modern jet liners. This is very sophisticated technology that took decades to perfect and the best of America’s once world class engineering talent. Once it is lost we may be too far down the curve of decline to get it back. In the not distant future people will marvel at the few surviving commercial airplanes on display the same way peasants from the dark ages would marvel at the aqueducts of Ancient Rome.
It won’t be that bad. If I look optimistically at Wolf’s chart, I see air travel up 6-fold in the past 4 months, from 5% of pre-pandemic to 30%.
Pre-pandemic air travel was excessive. 30% is too small. But it won’t stay at 30%, and there’s a happy middle ground in there.
Finally, someone’s always going to want a new jet, even if it’s a supersonic presidential-transport sort of thing.
Some of these companies will go BK, many should go BK, but some are, and will be, excellent deep-value investments for brave investors willing to consider that the world didn’t end and isn’t about to.
Yeah, here’s the issue with that. As you said, there will be bankruptcies. But there’s essentially a huge fleet of planes, of which we will probably need half of them. That means that half of the maintenance jobs are gone, as are many of the manufacturing jobs (Boeing and Airbus will have to lay off much of their staff without permanent support). Plus, many airline leasing companies and investors in bonds like the below will take huge losses.
https://americanairlines.gcs-web.com/static-files/cd099022-db5c-4e15-95a1-f8993e4c8f73
It’s never as clean as people envision it will be.
And don’t even get me started on what the ripple effects will be when the CMBS bonds start maturing and the sponsors are no longer able to refinance the balloon payment.
This country is in a lot of trouble.
Even if commercial aviation disappeared, jet engine tech will survive via military spending, which is how it was developed in the first place and then handed down to commercial sector.
Even if commercial aviation disappeared, jet engine tech will survive via military spending, which is how it was developed in the first place and then handed down to AND PATENTED IN THE commercial sector.
there, fixed that for you
As in ‘Bloated’ military spending ?? … much of which should be cut to the bone!
Related to these pending ‘reductions’ in airline capacities, is what becomes of All those unused jets ? Do they just sit parked .. in various aircraft graveyards, rusting/deteriorating ??
Seems like a colossal waste of material resources in the making, going forward .. um, ‘backward’!
Down we go…..
The peasants of Anglo-Saxon England didn’t have any aqueducts to marvel at, they were lost in wonder at the nice pottery and glass beads (looted graves to get at them). . :)
That is very true, look at the skills that has already gone away. Today, if any company tried to build up a consumer electronics manufacturing in the US, it will be impossible. The skills have been lost, I think the time it takes to lose those skills can be up for debate.
But CE can a reference. Jet engine tech may stick around, but other stuff may not. It just depends, so if you lose the supply chain for the jet engine, it will be just as devastating. Just think pharma, they can develop the drugs, but a lot of the API comes from elsewhere. Like saying Apple can design best iPhone, but who cares if There is no supply chain to build the thing.
At the end, you need the right people or those skills go away, and you are at someone else’s mercy.
I am joining the boondocking crowd. Picked up a nice Okanagan camper van. Needs a bit of interior spiffing up. Drove 520 miles to get it before the line up of others. I am sad I can’t take the Coho ferry up to Vancouver island so I will have to satisfy myself with Washington state, Idaho maybe some Montana.
Stock up – Idaho and Montana are prohibition states.
Some of the best places I ever traveled was Interstate 90 from Washington to Montana. Could spend a retirement seeing it all taking the rural highways. LOVE northern Idaho.
North Idaho is now bumper to bumper with RVs and tent campers. And all routes between Spokane to Glacier. Crazy!
Which is odd given most of Glacier is closed, including the entire east side of the park, which is the best part of the park.
JSRG,
Yes, Glacier is closed, but people are still going toward that area. Maybe anywhere is better than nowhere, and the regional Walmarts are now the camping sites of choice.
Obviously I’m exaggerating (a bit), but at times it seems like my area is some sort of RV sales extravaganza. Mostly Washington plates, but from all over the west. It took me twenty minutes to get into my home town, normally never a stop. Bumper to bumper at times. I’m so looking forward to September.
I just spent this past month camping in Colorado and didn’t feel overrun by RVs or other campers in general but we avoid national parks (crowds).
Supposedly americans are going camping more but I didn’t see that. Sure, some of the best sites are commonly taken in July/Aug but we always found outstanding sites in national forests.
A friend of mine works in his RV in his driveway now…I think remote work is driving some RV sales as people expand their living space at home.
It’s an excellent time to go camping thanks to C19….most people are cooped up at home staring at their devices hoping for better times. Traffic volumes on the roads are still low and there is less noise from the airlines above. You can actually enjoy smaller mountain towns that would typically be packed with tourists.
Folks who just dropped a small fortune on an RV are not too likely to be rushing to air travel for a while. My wife and I went from tent to cab over to fifth wheel to class A from the 90’s into the early 2000’s. We didn’t have a payment but so many did and I can guarantee you that for many of these folks every time there’s an opportunity to travel it’s gonna be in the rig sitting in the driveway with the monthly payment you see every time you enter and exit the house. This will be especially true for those with small children. The RV experience dwindles nearing high school.
Quite frankly, the main reason we’re bringing our 35 foot 20 year old monster back to life is because of current events. The kids are in college and can watch over stuff while we travel. The plan was to do small weekend trips via air travel here and there across the country mixed with cruises. That’s not happening for a long while.
The time for bailing them out is over. It is now time for right sizing for the future.
Flying is down for sure, but I do some work for an RV place, and boy are they busy. We handle facility maintenance and you literally have zero space in there parking lot. My guys park the truck in a neighboring lot. The GM answers the phone lines sometimes. They are moving an unbelievable amount of RV’s. Open 10 hours a day 7 days a week now.
With all these RV’s on the road, you’d think the oil stocks would recover, eh? Instead it’s just endless bad news with predictions
of their demise. THEN what they gonna do with them RV’s, sell em
for scrap? Maybe I should be buying scrap metal stocks.
Tow em with livestock, you silly … both animal AND human!
‘;]
Back in June, the airline stocks skyrocketed after one of the airlines jawboned and announced that it was planning for 55% of last year’s passengers in July. I knew that was nonsense, based on the TSA trends I had watched. It’s now August, we’ve seen passenger throughput at around 30%, and the same nonsensical cheerleading is used again to pump up stocks.
LOL.
The fact remains, business travel is severely depressed and properly won’t return to anywhere near where it was, and that was the most profitable for airlines. I don’t see how more than half the carriers can survive.
The uptick is just folks coming back from vacation.
Has there been any statistical study of passenger contagion from commercial flying? I haven’t seen it. I believe the air turnover in modern airliners’ passenger space is some huge number (>6volume per hour?) – the old days of recycling all the air are over. (I think).
It’s looking like flying is fairly safe.
The cruise ships had a strange outcome (or at least one of them). There was only ~ 25% infection rate if I recall, and a few % fatalities? I don’t know what mitigating actions they took- quarantine, masks, etc., after they recognized what was happening.
I am not concerned about flying commercial in the US right now. Take the well-known precautions.
I don’t think you can draw that conclusion. We have such terrible testing and contact tracing, that no one who gets COVID after having flown has any idea whether it came from the plane, the airport, or the grocery store they went to the day before they flew.
My concern is that if you’re sitting next to someone who is positive, and he takes off his mask to drink, you’re now exposed.
Ultimately, it doesn’t matter whether flying is safe. What matters is whether people FEEL it’s safe. And most people don’t.
wk,
SIL took flight NC to SoCal recently to care for ailing family elder, caught virus even with all appropriate PPE.
Had to hang out in SoCal until cleared by doc, now home and doing OK so far per brother… She is 75, but the super healthy exercise and best foods, etc., type…
And BTW, before this virus checking actuarial tables, once one reaches mid seventies, life expectancy is approx 11 years for white males, little bit less for blacks, little bit more for Hispanic and Asians, all of that in USA.
Apparently, getting to mid seventies is the challenge, especially for males,,, duh, wonder why?
Vintage-Interesting story about catching Covid. It’s so hard to figure out without contact tracing, and that is very expensive. I’m not sure we’ll ever really have that. With partial lockdown hence few contacts, it’s not so expensive.
Per Wolf’s post, I checked on some TSA data. There are 50,000 employees and lots of contractors. I don’t know how many deal with the public. So, there have been ~1500-2000 TSA infected, and ~ 6 deaths.
I know a local factory with ~5000 employees has had ~100 cases, no deaths and 95% recovered so far. Most cases were people who “normally” work without social distance; some even outdoors. Mask compliance- not known.
The data are hard to figure out, as evidenced by even the experts with plenty of degrees still not in agreement.
Air turnover – ya, the avg 737’s cabin air is turned over every 120-180 seconds. SW is keeping the middle seat open through 10.31.
We’ve had to fly 4 times since Feb. due to family medical issues. No issues so far thank goodness. Only once did I see a flight attendant have to get on someone about their mask. Seems like the greater risk is being in the airport rather than the plane.
wkevinw,
Flying is safer than going into a crowded bar. But when someone sits next to you for hours, the air circulation system of the plane doesn’t protect you. You just hope that the person isn’t infected, and there is a very good chance of that. And if the person is infected (small chance), you just hope that their face mask will protect you, and it will to some extent, but you’re too close for a regular face mask that the other is wearing to properly protect you (you need distance for that). So then you just hope that you don’t get it anyway. That risk is not big, but there is a risk.
Given that risk, as small as it may be, I’m not flying unless I have to, and I won’t fly with an airline that doesn’t block the middle seats, period.
The TSA publishes figures about how many of its agents have gotten infected, and how many died. From the TSA:
“Since the beginning of the pandemic, TSA has cumulatively had 1,581 federal employees test positive for COVID-19. 1,179 employees have recovered, and 6 have unfortunately died as a result of the virus. We have also been notified that one screening contractor has passed away due to the virus.”
I have a guys weekend planned for late Sept. We do this every year or two and this was planned before the Corona business started. Seven of us each flying in from different parts of the country. So far nobody has cancelled. Although I suspect a few of the guys’ wives will force them to cancel, knowing them as well as I do. We shall see.
I’m a regular poster posting anonymously for privacy reasons. I also refused to get on a plane. I hadn’t been in any store outside of the grocery store, and hadn’t been to any restaurant except to quickly pick up take out, each time, with a KN95 mask. Somehow, my wife and I both contracted COVID and tested positive. Fortunately, we have zero symptoms, and only got tested because she was scheduled to get minor oral surgery. But it just shows how contagious this is, and the fact that we have no symptoms doesn’t make me think anything is fake news, just that we got very, very lucky.
Flying with my family from the east coast to San Diego next week via Southwest. 2 weeks in North Pacific Beach right on the ocean. The little beach bungalow has been in the family since the 1960’s and there is a vehicle for us to use there and extended family to visit. Cheapest airfare I have ever seen at about 25% of the normal rate.
I’ve been looking into information regarding the safety of airline travel during these “uncertain times” (or is it “times of uncertainty”)… either way…
There is not a whole lot of definitive information out there, but I did find this article. Bloomberg is not exactly my publication of choice but there is some interesting content here.
https://www.bloomberg.com/amp/opinion/articles/2020-08-05/is-it-safe-to-fly-here-are-the-odds-of-catching-covid-on-a-plane
You would think that they could have proven a super spreader event from commercial airline travel throughout this timeframe but there have been no documented instances.
https://www.bloomberg.com/amp/opinion/articles/2020-08-05/is-it-safe-to-fly-here-are-the-odds-of-catching-covid-on-a-plane
“What Barnett came up with was that we have about a 1/4300 chance of getting Covid-19 on a full 2-hour flight — that is, about 1 in 4300 passengers will pick up the virus, on average. The odds of getting the virus are about half that, 1/7700, if airlines leave the middle seat empty. He’s posted his results as a not-yet-peer-reviewed preprint.
The odds of dying of a case contracted in flight, he found, are even lower — between 1 in 400,000 and 1 in 600,000 — depending on your age and other risk factors. To put that in perspective, those odds are comparable to the average risk of getting a fatal case in a typical two hours on the ground.“
“ Real-world data bodes well for flying, too. Australia has been using contact tracing to investigate Covid transmission on hundreds of flights, and has found that while infected people got on planes, nobody got infected on a plane. Worldwide, there have been a couple of individual transmissions possibly linked to flights, but no superspreading-type events.
Assuming we’ll be living with this disease for months to come, we will need ways to separate low-risk activities from high-risk ones. Keeping informed of relative risks can help us do that. By worrying less about the relatively safer part of a trip — the actual flight — we can pay more attention to the potentially riskier parts, such as crowds and tightly packed lines at the airport.”
The cruise ship you are talking about had about 700 cases among about 3,700 passengers and crew, and 14 deaths. There is no good data about safety of airline travel.
“Boeing is going to be kept out of bankruptcy no matter what.”
This is nuts. We need to see many of these large corporate welfare cases be allowed to go through the process of bankruptcy. Bankruptcy is painful, especially for employees, but it’s a necessary step in getting a corporate house in order.
It’s actually painful for shareholders and bondholders. Seems like it rarely affects employees.
Toys R Us employees would probably tell you otherwise
I’m referring to a restructuring situation, not a liquidation one.
Anyone know why discarded masks are not considered hazardous waste? I would think viruses and bacteria would thrive in the warm moist conditions.
The virus becomes unviable fairly quickly on soft materials such as a mask. In terms of the bacteria on it, the mask is no more a hazardous waste than your discarded Kleenex.
Viruses and bacteria do not behave the same way. Bacteria thrive in warm/moist environments; viruses last much longer in cold conditions.
This is so typical of the world we now live in. The airlines and their Wall Street shills simply come up with a bullish narrative built on fantasy, BS, and a few chosen “statistics”. Voila, these stocks are going to the Moon and then Mars…don’t miss out. No one is travelling by air unless they have to, but what has truth got to do with fleecing someone of their money….well if it works. Today, the market is exploding higher. Apparently, we’ve got this COVID thing beat, more free money on the way (not that the average person will see it), buy and spend, spend and buy…This economy is running at subsistence levels, but apparently that is all we need for the snake oil sales to ply their wares…
No one ever knows for sure, but asset prices are so elevated that you might be better sitting the next 20 years out in t-bills even though they pay nothing. There have been three times that t-bills outperformed stocks over extremely long periods of 15- 23 years. I wouldn’t personally do it without some diversification, but it seems we could be set up for another long underperformance of stocks.
Augusto,
“Today, the market is exploding higher.”
You forgot to add the disclaimer: “subject to change” ?
Because minutes before the close the Nasdaq is down nearly 200 points or -1.8%
Morning…A few days ago on a different article I commented on the total lack of my own
municipality being aware of and taking the financial steps to survive what is still coming. The BIG layoffs haven’t started.Wait till October and thereafter ??
We all need each other. Republicans bail out the businesses, they lay off the workers, and the Democrats bail them out. Something is not working?
“the index has surged 15.7%. But it’s still down 44% from the end of the Good Times in mid-January 2020, and down a whole bunch more since January 2018.”
Those are terrible terrible numbers!
Interesting response Mr. Richter. J.Powell and the FOMC don’t see a significant change in the U.S. economy until 2022. They see all of 2021 being a transitional time with 2022 being the beginning of normalization of the economy.
Now that businesses have found out how well that remote work from home has been this may very well permanently change the petroleum and travel industries.
Wes: You stated:
“Now that businesses have found out how well that remote work from home has been this may very well permanently change the petroleum and travel industries.”
With respect to the petroleum industry, which I worked in for 35 years, the wells, pipelines, refineries, and oil/gas are out in the hinterland, not at home inside of a computer. While there are “some” jobs that can be done remotely (computer stuff), the actual work to get petroleum products to market is done outside of the “office”. I don’t see much changing in that business.
Plus, a high percentage of field work is done with subcontractors and they are primarily field-oriented (drillers, general construction, mechanical crews, etc).
What has permanently changed the energy business is technology. The problem is supply, not demand. OPEC + nations like Russia needs that technology, which is under sanctions. Read ‘Blowout’ to get the big picture. We can punish these players all day, there is still plenty of domestic oil. Fed policy created a bubble in corporate credit which enabled a turnaround in US energy dependency. With plenty of affordable energy the US can add jobs, and build a more vertical economy. Shutting down large corporate offices, removing commuters from the highway, will insure we have low prices and energy available for some years. The moral of this is that interdependence breeds global insecurity. After Covid consumers learn to do without, increase savings, and write off debt. The economy will generate economic growth, much of it the energy sector. The next president should consider cutting off oil sales to China.
Anthony A.
You misunderstood. With more people working from home and video conferencing people are traveling less whether it’s a daily commute or business trips by air. This amounts to less petroleum consumption and less overnight stays for business which impacts the travel industry. Time will tell if businesses return to their past paradigms or if the current adaptation is here to stay to some degree or another.
All stock indexes netted together are back to pre corona virus levels…
We are to believe the catastrophe that has occurred, didnt.
And now we move into the vulnerable September pocket….with an election that will bring a further disruption ….
either election fraud, mail in confusions, etc…
and we get riots with Trump’s reelection or we get Socialism with the Biden (Rice) ticket…
Biden(Harris) ticket… There fixed it for you.
historicus, FYI, you get socialism too under the Trumpolini Regime: AKA, fascismo.
Fascism is very much a collectivist political construct. It’s just not as far to the left as Marxism.
Good ol capitalism: “privatize profits and socialize losses.”
Will the plebes ever catch on?
Looks like Tyler over at Zerohedge picked up your article. Gonna be some real interesting comments now.
Wolf, you’re really good with charts and stats. Do you think you can do an article on actual deaths and ICU per capita? I’m sure I’m not alone in my thoughts that most of what we hear in the media is skewing the stats wildly in an effort to shape public opinion. All we hear is cases, cases, cases, tests, tests, tests. My sister in law got tested three times before she was positive. These stats mean nothing, in my opinion. What is most quantifiable is deaths and ICU visits. My wife did the math on deaths in San Diego County vs population and the percentage is really really small. They just aren’t reporting this stuff. Quite frankly, this is why I snidely called the pandemic something else in a reply to an earlier post.
I realize this isn’t related to airline travel but figured it warrants asking about, especially now that this article is on ZeroHedge. Those guys are ruthless in their comments and are certain to fiercly question the credibility of the pandemic and everything we’re being told.
A small percentage of 320 million people is a LOT of people. 160,000 deaths in five months is a LOT of dead bodies. Hundreds of thousands of people with long-term health issues due to Covid are a huge burden on the healthcare system going forward — and many of them are younger people that now cannot live their lives as they had expected to.
There are always issues in reporting. It goes both ways. For example, in California, we now have a scandal on our hands with massive UNDER-reporting of cases because the computer system crapped out on us or something.
This virus is shitty, and I don’t want to catch it, and I don’t want anyone else to catch it. And I want for people to stay healthy and alive. And I’m willing to do my part, including wearing a mask in public, staying at least 6 feet away from people even with mask, and keeping the covid-is-no-big-deal nonsense off my site.
Wolf,
I could not agree with you MORE:
“This virus is shitty, and I don’t want to catch it, and I don’t want anyone else to catch it.
”And I want for people to stay healthy and alive.
” And I’m willing to do my part, including wearing a mask in public, staying at least 6 feet away from people even with mask, and keeping the covid-is-no-big-deal nonsense off my site.”
Having said that, I am really convinced there has been a deliberate and continuing intentional dumbing down of the population of USA since my days in high schools in the 1960s era:
In 1960s, in order to be awarded a HS diploma, one was required to prove they could read, write, and do basic arithmetic; clearly not so today, as I have known many college grads who could not write a complete sentence, and HS grads/seniors who could not do basic arithmetic of any kind.
Not being able to read and understand about the efficacy of the basic PPE and other protocols for virus containment would be another very clear indication of this dumbing down in USA IMO.
Thanks again for your efforts for all of us.
There’s more to the damage this virus causes than a simple tally of deaths. The “long haulers” will be damaged goods across a spectrum of disability for years and years to come.
Flying had already become a miserable experience prior to the virus. The industry provided awful customer service, and the customer’s had no one to appeal to.
Three of my last four trips had delays which cost me a day at my destination. No apologies. No compensation. My questions on these occasions were met with lies and indifference. After our last trip, where I was forced to rent a car and drive 300 miles or we would have had to spend the night at the airport, I told my wife that I will only fly direct domestic flights.
My wife and I have the time and money to travel for pleasure, but the industry has made it so unpleasant that I couldn’t care less if they all fail.
I’m with you Rumpled. If we had high speed rail in this country, I’d never get on a plane again. They have 300 mph trains in Asia. If we had those, we could do New York to Chicago in 3 hours or New York to Miami in 4. Outside of coast to coast travel, there’d be no reason to fly domestically anymore. Works for me!
Those numbers seem down right rosy compared to here in Sweden. Domestic air travel 2nd quarter 2020: 69 000 (1.8mil/Q2 2019)
International: Schweden Raus!/Swedes persona non grata most everywhere, almost non existent international air travel, apart from repatriating Swedes with specially arranged flights.
Air travel in 2nd quarter (including international):
Arlanda Airport (Stockholm, 1st in passengers):Down 96.7%
Bromma Airport (Stockholm City airport, 3rd in passengers ):Down 99.3%
Landvetter Airport (Gothenburg, 2nd in passengers): Down 98.6%
The rest: 10 airports down 100%
Air travel in July “recovered” for the 10 Airports managed by state owned Swedavia: Down 87% YoY
Ryan Air seems to have taken up trafficking “Stockholm” Skavsta (4th largest) again, their main hub in Sweden. Looking forward (Aug-Oct), they seem to have three flights/week to London Stanstead, compared to two flights/day during normal times. Wizz Air to eastern Europe (Sto Skavsta): Similar, but seemingly ramping up flights a bit in Sept.