Industry Insights

Setting the Record Straight

March 18, 2020

Since 2010, U.S. airlines have invested 73% of operating cash flow back into the product – including new aircraft, facilities, ground equipment and technologies – while retiring $91 billion in debt. These expenditures are extremely important. Additional details about how airlines are investing operational cash flow can be found here.

Going into the economic crisis created by the coronavirus, U.S. airlines were stronger than they’ve ever been — well-run and well-capitalized businesses with a positive outlook for overall financial health. U.S. carriers used this strength to invest heavily in their employees, who are the backbone of our industry, increasing salaries and pensions for their 750,000 direct employees over the last decade. In 2019, the U.S. airline industry’s employment reached its highest level since 2000, with 750,000 direct employees, as well as the 10 million jobs supported by the industry. In fact, from 2010-2018, the average compensation per employee rose by approximately 41%. This is a significant investment that is not captured within the narrow scope of free cash flow. Additional details about how U.S. airlines are investing in employee wages and benefits are available here.

This unforeseen pandemic has caused rapid and severe economic damage to the industry, over an unprecedented amount of time. Carriers are burning through cash as cancellations far outpace new bookings for U.S. carriers, planes are only 20-30% full and new bookings are implying 70-80 percent declines in traffic even as airlines make dramatic cuts in capacity — and this is getting worse each day. Right now, the collective burn rate for U.S. airline industry is $10 billion per month.

A4A has said repeatedly, this is about protecting and preserving the jobs of 750,000 U.S. airline employees, as well as the 10 million jobs supported by the airline industry.

Please find the full A4A Industry Review and Outlook by clicking here.

Data updated March 18, 2020.