The Coronavirus Outbreak & Scare Qualifies As A True Crisis For Airlines, But Every Crisis Creates Opportunities For Some

The Coronavirus Outbreak & Scare Qualifies As A True Crisis For Airlines, But Every Crisis Creates Opportunities For Some

Call it wise. Call it opportunistic. Or, call it despicable.

But whatever you call it, you should understand that pretty much everyone on all sides of the issues related to the impact of the global spread of coronavirus the COVID-19 illness it causes has signed on to the philosophy first publicly and boldly espoused by Rahm Emanuel.

“You never want a serious crisis to go to waste,” Emanuel said on Nov. 19, 2008 before a gathering of corporation chiefs sponsored by the Wall Street Journal. Emanuel was then a Congressman and a top campaign aid to president-elect Barack Obama, who he’d go one to serve as chief of staff for two years before leaving to run for Mayor Chicago. He won and served as Mayor from 2011 to 2019.

As he explained at the time, Emanuel believes that crises give political leaders leverage “to do things you could not do before” and therefore should be as “opportunities.” Critics and supporters long have viewed that attitude, alternately, as being manipulative, cagey, cold-hearted, practical, selfish and forward-looking.

But a regular feature of virtually every local, national and even global crisis since Emanuel laid out his philosophy of using crises to seek advantages has been the efforts by some to create political, economic or cultural advantages for themselves and/or those who side with them. And, truth be told, that pretty much always has been the case, even before Emanuel spoke so openly and matter-of-factly about it.

And make no mistake about it now, the fights for advantage over what are, in most cases, issues of mere tangential relationship to the actual spread of coronavirus via commercial air travel already are raging. Here are just a few of the more high-profile fights over which parties can gain some advantages out of the global coronavirus outbreak and scare.

  • American Airlines CEO Doug Parker noted Tuesday at an investors conference sponsored by J.P. Morgan that none of this nation’s big carriers have asked for financial bailouts like those offered by the government – and accepted by only a few airlines – after the 9-11 terrorist attacks. Yet such bailouts were a big topic of discussion on cable TV business networks and other news programs Tuesday. So, who is pushing the idea? For the most part Democrats in Congress, along with probably half of their Republican counterparts are trying to get out in front of the fast-growing crisis in the airline industry as passenger demand, especially for international flights, declines further each day. Whether bailouts are offered, or accepted, remains to be seen. But don’t be surprised if industry leaders begin using the recognition by Congress that the tax burden on airlines is large enough to warrant consideration of bailouts in an emergency situation as ammo for a new effort to seek relief from some of that tax burden even during normal or boom time circumstances
  • Similarly, President Donald Trump and his advisors are working on a payroll tax holiday that would help hourly workers who see their hours reduced or eliminated during the current economic crises. The administrations also is working on a potential offer of “sick pay” for workers who get ill or who otherwise can’t come to work now but who do not have normal sick pay benefits through their employer. Another potential action under consideration is providing some sort of financial aid or a low-interest loan program to help small businesses hurt by the coronavirus outbreak and scare. But in each case, it doesn’t take much imagination to predict that parties that long have advocated for such policies as a normal part of life in America will point to these emergency circumstances as good arguments for making such programs permanent
  • Published reports have highlighted a nasty fight between the big U.S. carriers and the Centers for Disease Control in Atlanta. The team of world-renowned virologists long have pushed –with little success – for airlines to provide the CDC with lots and lots of data about who their passengers are, where they’re going and where they’ve been. It makes sense, at least from a defensive virology perspective to want all that data. But from a legal, technological and customer perspective it is a costly technical challenge and both unwise and, in some cases, illegal to collect and share that data that most travelers would consider nobody’s business. Now CDC officials are using the coronavirus outbreak and, most especially, the high level of fear surrounding it, to push harder for airlines to provide that data to the agency. Airlines would be happy to give it to them if doing so would bring all their passengers back in short order. But it won’t. Meantime, providing all that data would be hugely expensive, distractingly time-consuming and legally dubious, especially when the data is about Europeans customers, who are protected by E.U. law from having their data shared in such ways. U.S. citizens arguably have similar protections provided by the Constitution, though reaching a final determination could take years as the matter works its way through the courts system
  • Airlines4America, the industry’s Washington, D.C., lobbying group, now is touting the coronavirus outbreak and the huge drop in travel demand as a new, even more powerful reason why Congress should reject a proposal that would increase the fees that airports already charge passengers from starting or ending their trips at those facilities, or even for merely passing through. The airports and their political backers in Congress have been gathering support for the new bill for more than 18 months and it appeared recently that perhaps they might have enough support to pass that bill. Now the airlines, which oppose the idea because they believe they’ll largely be unable to pass through the $2 or $3 per passenger fees through to their customers, argue that increasing the Passenger Facility Fees airports can impose at this time would do even more severe damage to their financial health
  • So far airline executives and leaders of their labor unions have remained quiet on the subject, but you can bet both sides are retooling their contract negotiation plans in light of the coronavirus outbreak and its financial impacts on the air travel business. Most big carriers currently are, or soon will be in negotiations with one or more of their big groups of employees represented by unions. All such groups have made it known that in light of U.S. carriers record or near-record profits over the last three to five years that they expect big new deals that, to their way of thinking, more adequately shares with them the record fruits of their labor. But now, with all the big carriers having withdrawn their first quarter and full-year profit guidance statements you can bet they’ll begin pleading poverty at the bargaining table. They did so after the 9-11 attacks, and again after the deep economic downturn in 2008. So why would anyone expect airline managers not seek to use the coronavirus crisis to help at least limit the size of the raises and other benefits they eventually will give their workers in contracts now up for negotiation? Labor, of course, will fight – and probably do so vigorously and loudly – to get the rewards they believe they’d already earned before anyone ever heard the word “coronavirus.”
  • European airlines and carriers from elsewhere who fly to Europe, finally got news this week that they don’t have to keep flying lots of empty planes around Europe just to retain their valuable and limited landing rights at most airports within the E.U. zone. The existing E.U. rule is that if a carrier doesn’t use a particular pair of landing and takeoff rights – called “slots” or “slot pairs” – at least 80% of the time, it loses those slot-pairs. The rule is supposed to keep big airlines from acquiring more slots than they really need and then under-using them as a way of preventing competitors from adding more flights there. For several weeks the big Euro airlines have been begging for relief from that rule, citing their largely empty international flights as painfully costly reasons why they need to temporarily cancel flights without forfeiting the associated slots. On Monday the E.U. finally gave in, temporarily. But don’t be surprised now to see the big carriers fight to extend the period of relief from the “use-it-or-lose-it” slots rule or, even to permanently lower the use requirement from 80%.

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