Hit hard by pandemic, Detroit Metro Airport faces long journey back
Passenger traffic at Detroit Metro Airport was down more than half in March, and the numbers for April are expected to be much worse as the coronavirus pandemic puts the airline industry into a tailspin.
It's gotten so bad that Delta Air Lines, the airport's largest carrier, wants to cancel all Kalamazoo, Lansing and Flint flights because the number of people flying in and out of those cities is fewer than 10 per day.
It will be months before most casual travelers think about setting foot on a plane again, and business travelers who have learned to use video conferences during the crisis might fundamentally alter the way they interact with customers. All of that makes for a long journey back to anything resembling normalcy at the airport, and that doesn't bode well for Metro Detroit's economy, local observers say.
The number of passengers at Detroit Metro Airport plummeted 52% in March; 1.5 million people flew in or out of the airport, down from 3.2 million during the same period a year ago, according to Lisa Gass, a spokeswoman for the Wayne County Airport Authority.
Here's a snapshot of just how far air traffic has fallen: Only 154,695 people passed through airport security checkpoints across the United States on Thursday, compared to 2,499,461 on the same weekday in 2019, according to the Transportation Security Administration.
The Wayne County Airport Authority doesn't expect to receive April passenger data from airlines until mid-May. But the picture is expected to be bleak.
"The April number is going to make the 50% number look rosey in comparison," said Sandy Baruah, president and chief executive officer of the Detroit Regional Chamber. "We often forget how our economy is integrated and so much of our industries, such as the auto industry, are global in nature."
Detroit Metro Airport typically has an economic impact of about $10 billion annually, Baruah said, noting the airport directly or indirectly supports about 90,000 jobs when non-airline employees such as concession workers and parking lot employees are included.
Many of those people have been thrown out of work: Only six restaurants and 12 stores remained open at McNamara Terminal and North Terminal as of April 17, according to Gass.
Baruah doesn't expect things to get any better as long as coronavirus lockdowns continue and people remain reluctant to fly.
"If you can tell me when the global economy is going to open up again and when Joe and Jane American is going to feel comfortable getting on a plane to go visit grandma in Florida, I can tell you how long this will last," he said. "I think the hope is that as dramatic as the shutdowns were, the restarts will also be, but human nature is difficult to predict."
A survey conducted by the International Air Transport Association, which represents domestic and international airlines, found that 40% of travelers plan to wait at least six months after the COVID-19 pandemic is contained to resume flying.
Roger Dow, president and CEO of the U.S. Travel Association, which lobbies for companies in the travel sector, predicts airlines will be able to win passengers back once Americans are confident the coronavirus is contained. He cited the travel industry's rebounds after the Sept. 11 terrorist attacks and 2008 financial crisis.
"On Sept. 11, travel came to a halt within one hour, and people were never going to travel internationally again," he said. "In the 2008 crisis, the predictions were that the hotel industry would be shuttered up, but what happened was we just came off 10 years where every single month revenue for the travel industry was higher than the month before it."
Before the travel industry can fully rebound, however, Dow said corporate travel that has largely been replaced by videoconferencing will have to resume being a big part of American life.
"The news says there's a pandemic, you could die," he said. "The person goes to their bosses and says 'Do I have to travel? Are you going to make us travel? Do I have to go to this convention?' And I'm sure they went to HR, and the HR department spoke to the lawyers and the lawyers said 'Let's have a policy where we tell them don't travel.' Companies aren't going to force their employees to travel until they think it's safe for them travel."
For now, airlines are hemorrhaging money. Delta, which has a major hub at Detroit Metro, lost $534 million in the first three months of the year, compared to a $730 million profit a year ago. American Airlines Group Inc. and United Airlines Holdings Inc. reported even bigger first-quarter losses: American lost $2.2 billion, while United lost $1.7 billion.
Delta is operating just 143 daily departures from Detroit Metro, down from 420 before the virus hit.
Even so, the airline is burning cash. Here's an example: For most of April, Delta flew just six passengers daily to and from Lansing, five out of Kalamazoo and eight out of Flint. On some flights, the crew outnumbered passengers.
In a request filed with the U.S. Department of Transportation on Monday, Delta said it wants to stop flying to those cities and six others, at least for now. The airline argues that the few who are flying can drive to airports less than 75 miles away: Flint passengers can drive to Detroit, and those from Lansing and Kalamazoo can drive to Grand Rapids.
Delta framed its request as an effort to protect workers at smaller airports from unnecessary exposure to coronavirus.
Permission from the federal government is necessary because airlines received a $25 billion bailout that was part of the $2.2 trillion coronavirus relief measure passed in March by Congress. Conditions of that aid require airlines to maintain schedules that are similar to their pre-March flight levels "to the extent reasonable and practicable." Congress made that stipulation because it wanted to make sure emergency workers could fly if they needed to respond to a crisis.
The aid measure also requires airlines who receive assistance to refrain from conducting involuntary furloughs or reducing pay rates and benefits until Sept. 30. That means for now at least, workers are getting their paychecks whether or not there's anything for them to do. That is almost certain to change come Oct. 1.
Detroit Metro Airport got a $141.8 million piece of the relief money. It will be used to help meet "most immediate needs, including debt service payments and operating expenses," airport officials said.
Another $114 million was split between 89 smaller airports in Michigan, with the second-largest amount, $19.1 million, going to Kalamazoo.
Despite the current troubles, Detroit Metro Airport and Delta are likely to play a big role in Michigan's economic reemergence from the coronavirus-related shutdowns, believes Rich Studley, president and CEO of the Michigan Chamber of Commerce.
"The good news is here in Michigan, COVID-19 is starting to subside and the governor and Legislature are focused on how to get the economy going again," he said. "Getting Delta back to full strength with flights will be a big part of it."