With fewer passengers, airlines test cargo flights.
The coronavirus pandemic has so scrambled the global economy that commercial airlines have started doing what was once unthinkable: flying planes without any passengers but loaded with cargo.
After consulting an internal crisis playbook, American Airlines on Friday carried out the first such cargo-only trip in 36 years, using a Boeing 777, which can normally seat more than 300 passengers. The airline did two round-trip test flights, ferrying cargo in the plane’s belly from Dallas to Frankfurt and back.
“The world is in such a state, we’re in such a state, it’s worth trying and figuring out,” said Rick Elieson, president of cargo and vice president of international operations for the airline.
The test flights, which concluded on Monday, carried medical supplies, mail for active U.S. military troops, telecommunications equipment and electronics. They also proved profitable enough that American is planning to run more cargo flights, possibly as soon as this week, Mr. Elieson said.
But the economics of doing so could change in an instant.
“It may work next week or it may not work next week, and it may work again the week after that. So it’s very fluid,” he said. “That will surprise no one, to learn that this industry is no different than everything else going on in the world right now — lots of uncertainty.”
American is not alone. Delta Air Lines announced similar cargo flights last week and United Airlines said on Sunday that it was doing the same.
Wall Street rebounds after a turbulent start to the week.
A glimmer of hope that lawmakers in Washington would finally reach a deal to stabilize America’s stricken economy helped fuel a rebound in financial markets on Tuesday.
After Democrats in the Senate had blocked progress on a $1.8 trillion economic stimulus package, lawmakers signaled late Monday they were closing in on a deal to bail out companies and send checks of up to $1,200 to many Americans.
The S&P 500 rose as much as 8 percent, and stocks in Europe and Asia also climbed.
The gains came even as investors were faced with more evidence of the economic toll of the outbreak. Companies, from General Motors to the Boeing supplier Spirit AeroSystems, detailed the impact of production shutdowns on their business, and new survey of activity in Europe showed a plunge in business across the region. Also on Tuesday, Japan said the Summer Olympics in Tokyo would be postponed for a year — a blow to broadcasters and advertisers who bet big on the viewership of the games — and India said it would impose a three-week lockdown.
But the rally on Tuesday was in part a rebound from a difficult stretch for stock investors. On Monday, the S&P 500 fell about 3 percent as Congress struggled to overcome differences on the aid bill and traders remained cautious about the Federal Reserve’s ability to cushion an economy in free-fall. Stocks are down almost 30 percent since their peak in February.
After a month of mind-bending turns in the market, investors are still fragile and could sour on stocks if the promised deal hits a snag again, or as further evidence of the economic damage caused by containment efforts becomes evident. The U.S. government will report weekly jobless claims on Thursday and some analysts expect the data to show that millions of Americans became unemployed last week.
“Yesterday was as ugly a day to watch the legislative process as I have ever seen,” Dan Clifton, a partner at Strategas Research Partners, a financial and economic consulting firm, wrote in an email. “Continued delays over the Senate vote or the House process will not be viewed kindly by investors, given the postponements in getting this packaged passed already.”
In Europe, markets were led on Tuesday by Germany, where stocks rose more than 7 percent. Those gains followed a similar performance in Asia, where major markets around the region posted increases that ranked among their biggest gains in weeks.
The Olympics are delayed. Advertisers are scrambling.
More than $10 billion in advertising arrangements, sponsorship deals and promotional events were linked to the summer games, which had been scheduled for July, according to the market intelligence service Sportcal. Companies often create elaborate campaigns around the Olympics, the most-watched sporting event in the world, recruiting athletes to star in Olympics-themed commercials and scheduling products to debut in promotional tie-ins.
Companies such as Coca-Cola, Airbnb, General Electric, Procter & Gamble and Visa had signed on as sponsors for the 2020 games.
But on Tuesday, the International Olympic Committee and Prime Minister Shinzo Abe of Japan said that the games would be delayed, possibly for a full year.
Now, “commercial plans four years in the making are being hastily rewritten around the world,” said Conrad Wiacek, head of analysis and consulting for Sportcal, in a statement.
NBCUniversal, the main American broadcaster of the Summer Games since 1988 and the Winter Games since 2002, had already sold more than $1.25 billion in advertising commitments for 7,000 hours of planned broadcast, streaming and social media content. The media giant was set to send more than 2,000 people to Japan for the games.
NBC Universal said in a statement on Tuesday that it was “ actively working with our advertising partners to navigate this postponement.”
Kudlow says White House taking ‘fresh look’ at reopening economy.
The chairman of the National Economic Council, Larry Kudlow, told reporters on Tuesday that the White House was taking a “fresh look” at calls to reopen parts of the economy amid lockdowns that states and cities have imposed to slow the spread of coronavirus.
President Trump made comments in a similar vein on Tuesday, saying he “would love to have the country opened up, and just raring to go, by Easter,” less than three weeks ago.
Public health officials say lockdowns and stay-at-home orders — which now cover about 100 million Americans — are critical to saving potentially hundreds of thousands of lives from the pandemic. Many economists say lifting them prematurely would actually hurt the economy, by driving up infection and death rates and undermining Americans’ confidence that they could safely buy even necessary items.
But Mr. Kudlow suggested it might be possible to “target zones where the virus is less prevalent” for lifting restrictions — despite a lack of widespread testing for the virus in the United States.
Analysis: To beat the coronavirus, cut the red tape.
Fighting the coronavirus is hard enough. Government regulations should not make it any harder. But that’s exactly what’s happening, two prominent University of Chicago behavioral economists say.
Sendhil Mullainathan and Richard H. Thaler, who won the 2017 Nobel Memorial Prize in Economic Sciences, have identified five kinds of regulations that they say are hindering us in what amounts to a war of survival.
Their proposals include:
Suspending restrictions preventing doctors, nurses and other medical professionals from jumping in. Medical licenses in one state should be honored in all others, and specialists in one field should be able to help as needed outside their immediate expertise.
Global airlines could lose more than $250 billion in revenue.
Global airline revenue is on track to be $252 billion lower this year than in 2019, representing the worst economic crisis in the history of aviation, the International Air Transport Association said on Tuesday.
That figure is more than double the worst-case scenario the industry group laid out earlier this month.
Without immediate aid from governments around the world, almost half of the airlines around the world could die “in the coming weeks,” Alexandre de Juniac, the group’s chief executive, said in a call with reporters on Tuesday.
For poor countries, coronavirus could set off a global economic crisis.
As the coronavirus pandemic brings the global economy to an astonishing halt, the world’s most vulnerable countries are suffering intensifying harm.
Businesses faced with the disappearance of sales are laying off workers. Households short of income are skimping on food. International investment is fleeing so-called emerging markets at a pace not seen since the global financial crisis of 2008.
The pandemic is unfolding just as many poor countries are confronting debts that limit their ability to help those in need. Since 2007, total public and private debt in emerging markets has multiplied to 165 percent of annual economic output from about 70 percent, according to Oxford Economics.
The crisis has set off a sharp reversal of international investment away from emerging markets and toward the safety of U.S. government bonds. That shift has reignited fears that some countries could be sliding toward insolvency and default — especially Argentina, Turkey and South Africa.
Catch up: Here’s what else is happening.
Citigroup will temporarily shut down 10 to 15 percent of its roughly 700 branches by the end of the week in response to “shifts in foot traffic and market dynamics,” a spokesman said. Other branches will have shorter operating hours.
General Motors said it would draw down a $16 billion credit line as it “aggressively pursued austerity measures” to mitigate the business impact of the coronavirus.
Business activity in the eurozone plunged in March at record rates, according to surveys by IHS Markit. Britain’s index fell to 37.1 from 53 in February, the lowest point since comparable figures have been available.
Reporting was contributed by Tiffany Hsu, Niraj Chokshi, Elaine Yu, Ben Dooley, Jason Karaian, Carlos Tejada, Jim Tankersley and Daniel Victor.