Airlines mull temporary service consolidation

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Airlines mull temporary service consolidation
Photo Credit: Denys Yelmanov/Shutterstock.com

U.S. airlines are considering jointly consolidating services during the Covid-19 crisis, according to a CNBC report

Under the $58 billion airline stimulus package that became law on Friday, carriers that accept grants or federally guaranteed loans must continue flying to each destination that they serve unless they receive Transportation Department permission to do otherwise.

Consolidating operations to smaller markets could serve as a workaround to that requirement. 

“Does it make sense for more than one of us to be flying to a city when there are only a few seats filled on each plane,” CNBC quoted one anonymous airline executive as saying. “It may make more sense to maintain service to that city but to put all passengers on one plane.”

CNBC added that it spoke with executives of “multiple airlines” about the concept, though those executives said the idea had not yet been formally presented to the Transportation Department. 

The department didn’t offer a specific view on the concept in a statement Monday. 

“This is an important issue and the department supports the intent of maintaining a national network of air service to communities across the country,” a DOT spokesperson said.  We will have further guidance about how this will be accomplished in the days to come.”

U.S. airlines have dramatically pared back schedules but are nevertheless flying nearly empty planes. In a letter to employees Friday, United CEO Oscar Munoz and president Scott Kirby said they expect April load factor fall into the teens or even single digits, even with a capacity cut of more than 60%. 

On March 29, the Transportation Security Administration screened 180,000 passengers and crew members, compared with 2.5 million on the same date last year. ARC reported an 88.5% year-over-year drop in the number of tickets issued for the week ending March 29. 

According CNBC, if airlines were to jointly consolidate service, they would continue to separately sell tickets for city pairs on which they now compete. However, instead of three carriers flying New York LaGuardia-St. Louis, for example, every passenger would be funneled onto a single flight. Such an arrangement would require the completion of complicated commercial agreements. 

The trade group Airlines for America declined to comment on the topic Monday. United, Delta, Southwest and American either didn’t respond to a request for comment or declined to comment. 

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