This morning I was shocked to see that Delta Air Lines announced they were losing $27 million a day. That means they are losing $810 million a month. Multiply that times 6 months and you see Delta losing almost $5 billion dollars before they swing into the possible uptick of the spring selling season in 2021 (also with the hope there is a COVID-19 vaccine). To generate cash Delta and all the major airlines are mortgaging their frequent flyer programs and raising billions with the banks to make sure they don’t run out of cash. My crystal ball says that Congress will not want to see a major airline fail as that would be a disaster for the economy and job losses. I expect another round of Federal support will come in the next few weeks.
Ironically, when Congress gives money to the airlines the strings attached will only accelerate the airlines into bankruptcy – The good news for the airlines is that Congress will most likely provide them with an additional multi-billion dollar bailout in the coming weeks. The bad news for the airlines is that along with this bailout comes requirements that the airlines can not cut jobs. Unfortunately, the airline industry is only flying about 30% of passengers that they did pre-COVID. Unless the airlines right-size their fleets and employees to the real world of travel today they will continue to be caught in a vortex of massive losses that will be impossible to rebound from. In essence, the airlines need to cut up to half their fleet size today in order for them to have a chance to survive. I worry they have too much pride to face the reality of today and try to kick the can down the road 6 more months in the hope that a miracle 100% bounce back will happen.
Global Entry pass will be free for kids under 18 if they apply with their parent – News last week said that children under 18 can receive a free Global Entry pass when applying with their parent. This is great news for families who are traveling internationally and want to avoid the long lines when they return back to the states. Before this change, each child had to pay the $100 fee for the Global Entry pass. The bad news is that the price for a Global Entry pass has increased from $100 to $120. Even with the increase, the Global Entry pass is one of the best investments you will make if you travel as little as once or twice a year internationally. CLICK HERE to read more.
Wow! Every week there is a new airfare sale – The airlines are trying to do anything they can to get you to travel this fall. Many flights are less than $200 round trip. Obviously, the airlines want to encourage people to fly and are hoping the low prices will jolt people out of their COVID induced fear of flying. Call one of our friendly travel advisors at 402-435-8888 to take advantage of these great prices.
A new COVID-19 vaccine may be the only salvation for the airlines in more ways than one – Many people are pointing to the development of a COVID-19 vaccine as the one thing that will bring the airline industry back. That is certainly one way to get people confident to travel again. However, it turns out it will do one more major thing economically for the airline industry. You see, once the vaccine is developed it will need to be distributed around the planet to 7.6 billion people. Experts estimate it will take 8000 Boeing 747 cargo planes to carry enough doses to meet the needs of 7.6 billion people. If this is a case all the major airlines will need to ramp up all their international flights to be able to deliver all the vaccines. Ironically the COVID-19 vaccine may also prove to be the Airline 2020 vaccine as well. CLICK HERE to read more.
I think it is a shame that the U.S. Department of State is making excuses they can’t process new or renewal passports – I have shared with many of you that my passport expires in January 2021 and as such, I cannot travel outside the U.S. as most countries require that a passport has at least 6 months prior to your return flight before they will allow you into their country. Well, the U.S. Department of State has not yet brought back their staff from the virus and as such, no new or renewal passports are being issued unless it is an issue of life or death. Do you think they will accept me not being able to attend Oktoberfest in Germany as a valid appeal for a life and death issue? CLICK HERE to see more info about getting your passport renewed.