WEF Snap Analysis – Airline Stimulus Package

posted on 8th October 2020 by Eddie Saunders
WEF Snap Analysis - Airline Stimulus Package

On October 1st, the condition for the $25 billion federal bailout to the airline industry ended. Treasury Secretary Steve Mnuchin is asking airline executives to delay the furloughs as he works with House Speaker Nancy Pelosi (D-CA) on legislation to provide more funding.

As the stimulus package is renegotiated, here is analysis from Isobel Fenton, Platform Curator for the Aviation & Aerospace at the World Economic Forum, about what these developments mean for the industry. For further questions/interviews: alem.tedeneke@weforum.org or +1 646 204 9191.

  • Airline workers have feared they’ve been living on borrowed time over the past months and that fear has been realized as the $25 billion federal bailout has run out on September 30th with no immediate relief in sight.
    • Keeping airline workers on the payroll was not only important obviously for their salary (or partial salary) but crucial also for employees to maintain the health care and other benefits associated with their employment


  • The two sources of hope for airlines workers to avoid tens of thousands more job losses were an accelerated recovery from the crisis to provide sufficient demand for their scale or an additional bailout; it is now clear the former is not realistic
    • The outlook for passenger demand recovery time frame keeps sliding thus making it harder for airlines’ to justify their outsized workforce in the medium term given their dire revenue and cost positions


  • If an additional bailout is not realized and the US loses tens of thousands more airline workers, the industry will also face the ramp-up challenge in a number of years once passenger demand does returns to pre-pandemic levels
    • Ramping up will not only be a challenge and expense given the training and certification for many skilled workers such as cabin crew, but the mass workforce reduction may be a cautionary tale serving as a deterrent from attracting new talent to join the airline workforce previously seen as a stable career path in an ever growing industry