Airline executives, as reported by CNBC, are openly considering pooling their customers between carriers in a complex agreement to maintain routes while increasing load factors on the flights to return profitability to the hard-hit industry. Meanwhile, details published today by the Department of Transportation have codified some of the operational strings attached to any air carriers that will receive funds related to the Coronavirus Aid Recovery and Economic Stimulus (CARES) Act that was signed March 27. The department’s primary goal is to ensure that all cities served by scheduled air carriers will retain some level of service moving forward.
Carriers have already slashed their schedules for April and are presently trimming their May offerings, with Frontier notably planning to continue only 10 percent of their normal schedule in May. Cuts at other carriers are less drastic, but no less than a 25 percent cut off their normal schedule.
If regulators allowed consolidation, customers could expect to see multiple airline selling tickets on a route that would be operated by one member of the agreement – essentially a codeshare between carriers that are used to competing, not cooperating. So, if you were headed to New York’s LaGuardia airport from Atlanta, in the past you would have traveled on Delta, Southwest, American or Frontier. In a consolidated environment, you might still buy your ticket from any of those carriers, and not realize which one’s plane you’d be flying on until you were at the gate for departure.
The concept is theoretical at this point; there have been no formal petitions to allow this consolidation yet. The details to make such a partnership work are as complex as they are numerous. While the companies must find some way to return to profitability, a move such as this could drastically reduce the staffing needs of the participating carriers – a concern for pilots that will grow more and more urgent as the September 30 no-furlough limit approaches.
The more concrete news out of the Department of Transportation today is that while frequency of flights will almost certainly drop drastically, a priority of the CARES act is to ensure that no markets lose air service entirely. The docket’s wording is worth a careful read – the department defines “points,” not airports. The proposal allows carriers to draw frequency down to one day a week, or to five days a week based on the frequency of flights previously operated to each point. Carriers may operate to one airport serving the point, or split the required flights between airports serving that point to meet their service obligation.
For the flying public, this means that travelers accustomed to flying out of Long Beach might be headed to LAX for departure, or those who’ve enjoyed flights from Westchester County could find themselves flying from one of the other New York City airports, depending on how liberally the concept of a “point” of service is interpreted. Both pilots and passengers will likely be affected by the reduction in total flights as schedules are drawn down to increase the load factors toward profitability.
Regional carriers that held out under their own name to sell tickets, such as Cape Air, are required to operate with the service requirements; regionals that fly under the colors of a mainline partner will have the responsibilities for service obligations handled by their mainline carrier. Cargo operators are initially exempt from the service obligations, as they’re seeing an upswing in business for cargo since the capacity for cargo previously carried below the cabins of passenger airlines has greatly diminished, but there is an allowance for cargo carriers’ obligations under this act to be revisited if their demand sees a major shift.
As things firm up, we’ll keep a sharp eye on what these industry shifts mean for pilots, who were riding one of the strongest hiring waves in the industry’s history before this sharp downturn snapped hiring trends to zero almost overnight. We’ve seen carriers abroad furlough crews, and domestically two regional operators have already fallen victim to the downturn. Trans States Airlines will operate its last flights April 1; Compass is slated to cease operations April 7. These are almost certainly not the last of the gut punches for professional pilots as fleets of older aircraft are parked in the desert for good and carriers look for more ways to streamline their operations.