Planes, trains and motorcoaches seek bailouts as virus hammers demand
Washington — Reduced demand for travel due to the coronavirus pandemic is taking a toll on the nation's transportation systems. Airlines, Amtrak and bus services are feeling the pinch and looking for help from Washington.
The requests for help piled up quickly as lawmakers scramble to prevent an economic collapse as cities and states continue to expand shutdowns. Airlines are asking for $50 billion. Public transportation systems are seeking $12.875 billion. The group that lobbies for motorcoach and charter bus operators says the bus industry stands to lose as much as $8 billion because of the virus.
Labor leaders that represent transportation workers are pleading with Congress not to forget about the rank-and-file as corporate leaders line up for bailouts.
The debate is occurring against a backdrop of sharply reduced service across the board.
Detroit Department of Transportation buses will be back on the road Wednesday after drivers worried about coronavirus stopped the fleet for a day.
Delta Air Lines Inc., the largest flight operator at Detroit Metropolitan Airport with over 400 flights per day, is cutting its flight capacity by a record 40% because of reduced demand related to the coronavirus pandemic.
American Airlines Inc., which operates about 65 flights per day from Detroit Metro, is reducing international capacity for the by 75% between now and May 6. The Dallas-based airline said it would also cut domestic capacity by 20% in April and 30% in May.
United Airlines Holdings, Inc., operates approximately 50 flights per day at Detroit Metro, has announced a 50% cut in overall capacity for April and May. The Chicago-based airline said it is expecting the deep cuts "to extend into the summer travel period" and passenger loads to drop into the 20-30% range.
Delta shares closed Tuesday at $31.74, up 11.37% since trading began. Shares in American closed at $15.58, down 2.14%. United shared closed at $30.67, down 13.53%. The Dow Jones Industrial Average closed up 5.2%, adding 1,048 points. And the S&P 500 gained 6%.
Amtrak, which operates three daily round-trips between Chicago and Pontiac, Michigan via Ann Arbor and Detroit on its Wolverine line, said it will be operating approximately 40% of typical weekday schedules on its Northeast Corridor, where trains that operate between Boston and Washington drive profits for the national rail service. Amtrak is also suspending service on its Keystone and Pennsylvanian trains in Pennsylvania.
Greyhound Lines Inc. said in a statement it is "actively monitoring the status of the coronavirus and will follow the direction of the CDC as it does in all matters of public health." The company has not indicated publicly that it has cut any service yet.
The American Bus Association, which represents motorcoach and charter bus companies in Washington, said Tuesday the coronavirus pandemic will cost the bus industry dearly. The group said nearly all of the charter and tour market has stopped operating, scheduled intercity service is down by more than half and continues to drop, and local commuter bus markets are down more than 60% as of Monday.
"If, as President Trump recently suggested, the current situation lasts well into the summer, August at the latest, the motorcoach industry will lose nearly $8 billion," the group said. "Further, it is very unlikely the businesses or transportation network will be able to return to pre COVID-19 levels of operation over the next year."
The American Public Transportation Association said transit systems are in need to billions to avoid similar dire straits.
"These funds are necessary to maintain essential services, including providing public transportation to health care workers, Medicaid recipients who receive non-emergency medical transportation, and law enforcement personnel," the group said in a statement. It called for Congress to include $12.9 billion for the nation's transit systems in virus-response legislation. "Without these emergency funds, public transit agencies may be required to suspend services."
Additionally, the U.S. Travel Association projects that decreased travel due to coronavirus will inflict an $809 billion total hit on the U.S. economy and eliminate 4.6 million tourism-related American jobs this year.
Hotel groups said after meeting with Trump on Tuesday that the forecast for their industry is similarly dire, saying up to 4 million total jobs have been eliminated already or are on the verge of being lost in the next few weeks due to the virus.
"Industry wide, last year, occupancy was 67%," Chip Rogers, president of the American Hotel and Lodging Association, told Trump in the White House meeting. "That helped support 8.3 million jobs. Right now... we're probably under 20% nationwide and headed south. If, by the end of the year, we get up to 35% and if nothing else happens, that'll be about 4 million jobs lost. That's if we can get back up to 35%."
Trump said Tuesday it is essential for the federal government to bail out airlines and other tourism-related industries.
"With this invisible enemy, we don't want airlines going out of business," he said in White House news conference.
Trump said he will also push for federal assistance for airplane manufacturer Boeing, which has seen its stock drop from trading at $222.99 on March 13 to closing at $124.14 on Tuesday as airlines have moved to cancel airplane orders in bids to preserve cash.
An aide to House Speaker Nancy Pelosi indicated that she wants to expand the focus of any bailout discussions to include transportation workers.
"This afternoon, Speaker Pelosi and Transportation and Infrastructure Chairman Peter DeFazio spoke with a group of major US airline CEOs to discuss the coronavirus epidemic’s accelerating impacts on the aviation sector," Drew Hammill, deputy chief of staff to Pelosi, tweeted.
"During the call, which was made at the CEO’s request, there was agreement on the crucial contribution aviation workers provide to the nation’s economy; the need for big, immediate action; and that assistance must put workers’ paychecks and benefits first," Hammil continued.
Larry Willis, president of the Transportation Trades Department, AFL-CIO, agreed, saying the federal government should not focus its bailouts on large corporations.
“Any efforts to stimulate the economy and protect critical industries cannot just be exercises in corporate welfare that benefit only the wealthiest among us," Willis said. "Lawmakers must ensure any economic stimulus reaches those who need relief the most — including the frontline transportation and service industry workers who stand to be disproportionately impacted by travel slowdowns and stock market drops."