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Airlines Want Relief on Mandatory Minimum Route Requirements

By Howard Smith – May 6, 2020 at 3:28PM

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Federal aid for COVID-19 impacts required airlines to maintain a minimum number of service routes, which will be costly.

As airline passenger traffic and revenue tumble from the impacts of the COVID-19 pandemic, carriers are looking for relief from federal requirements to maintain a minimum number of routes in their schedules. The requirement came with the $25 billion aid package meant to support U.S. airlines and their employees through the crisis. 

Airline trade group Airlines for America (A4A) is representing the industry in asking for waivers on those requirements, according to CNBC. A4A advocates on behalf of its members by working with labor, Congress, the White House, and others. Member airlines include American Airlines Group (AAL -3.93%), Delta Air Lines (DAL -3.14%), Southwest Airlines (LUV -2.88%), and JetBlue Airways (JBLU -2.68%), among other U.S. carriers. 

airplane cabin with empty seats

Image source: Getty Images.

Some airlines have already been granted waivers. Passenger air travel on U.S. airlines has dropped 94% in the most recent week, versus the year ago levels, says A4A. In a prepared statement it said, "the cost associated with operating nearly empty flights to communities with little to no demand significantly exacerbates air carrier liquidity," according to the CNBC report. 

The trade group says that domestic flights are currently carrying 20 to 25 passengers on average even after cutting capacity, versus close to 100 in the first two months of 2020.

According to the report, Nicholas Calio, A4A's president and CEO said in his statement to the Senate Committee on Commerce, Science, and Transportation "we would ask both this Committee and the Administration to seek solutions to address the challenges posed by this unsustainable requirement. Make no mistake, as the duration of this pandemic lingers, the reasonability and practicality of this requirement significantly diminishes."

Howard Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Delta Air Lines and Southwest Airlines. The Motley Fool recommends JetBlue Airways. The Motley Fool has a disclosure policy.

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Stocks Mentioned

JetBlue Airways Corporation Stock Quote
JetBlue Airways Corporation
$6.91 (-2.68%) $0.19
Southwest Airlines Co. Stock Quote
Southwest Airlines Co.
$32.05 (-2.88%) $0.95
Delta Air Lines, Inc. Stock Quote
Delta Air Lines, Inc.
$29.02 (-3.14%) $0.94
American Airlines Group Inc. Stock Quote
American Airlines Group Inc.
$12.21 (-3.93%) $0.50

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