Struggling U.S. airlines must keep flying if they accept coronavirus aid, with proposed minimum service levels spelled out by aviation regulators Tuesday.
The U.S. Department of Transportation said in a filing that participating airlines must maintain flights to all U.S. destinations served before March 1 unless they are granted an exemption.
The requirement would be in effect through Sept. 30 but is subject to extension. International flights are exempt because of the State Department’s March 19 advisory alert earlier this month urging Americans to avoid all international travel.
The frequency of required flights, according to the DOT’s proposal, will be based on the airline’s schedule before the coronavirus crisis. If an airline served a destination with at least one daily flight at least five times a week, for example, it must continue to do so, while routes with less frequency will be required to operate at a minimum of once a week.
Airlines will be able to consolidate service from multiple hubs to one hub as long as they offer the minimum frequency, and airlines that serve multiple airports in a metro area or region will be able to consolidate their flights into one airport to meet the requirements.
Airlines have already dramatically slashed flights because of the plunge in air travel demand, and more cuts are ahead. Southwest Airlines on Tuesday said it will operate just 2,000 daily flights in May, more than 40% less than normal levels.
“The department recognizes that demand for air travel has significantly declined as a result of the COVID-19 public health emergency and that requiring covered carriers to operate their full schedules and networks as they did before the public health emergency would be counterproductive to the objectives set forth in the CARES Act,” the DOT’s “show cause order” filed Tuesday says.
“Therefore, the department has tentatively determined to implement covered carriers’ service obligation by requiring only minimum service levels for each point served as follows.”
Airlines say they are still reviewing the proposed terms, which they and others can comment on until April 2 ahead of the DOT’s final decision.
But they knew the provisions were coming.
American Airlines CEO Doug Parker told employees about it in a video to employees last week after the Senate passed the $2 trillion aid package.American said it is eligible for $12 billion of the $50 billion reserved for commercial aviation under the so-called CARES Act. The deadline to apply for aid is Friday.
“Essentially, the U.S. government is providing funds to motivate airlines to continue air service and not involuntarily furlough any team members through a period of incredibly low demand for air travel,” Parker said. “There are no similar provisions in the bill for other large industries.”
Parker said American and other airlines need to keep flying to serve “those that need to travel,” singling out medical professionals, those who need to be with their families and elected officials visiting constituents.
Airlines will have to certify to the DOT every month that they met the requirements.
Bob Mann, a former airline executive turned industry consultant with RW Mann & Co., called the provisions “more than fair.”
“It gives them a lot of flexibility,” he said. “I think this balances the public need (for continued flights) with carriers’ economics.”
Mann said the minimum service requirements effectively end talk of a ban on domestic flights by the government.
“I think it absolutely puts a stake in the idea that you’d shut it down,” he said.