Virus stalling airlines, travel agencies that once flew high
A little over a month ago, travel agencies and airlines were flying high. News outlets were reporting on the comeback of the travel agent and the overall health of the travel industry.
Today, agencies and airlines across the country find themselves scrambling to put together survival plans to outlast COVID19. The continued ramping up of travel bans, border closings and the U.S. State Department’s Level 4 warning that advises U.S. citizens to avoid all international travel have brought worldwide travel to a screeching halt.
“This is worse than 9/11, this is worse than [the financial crisis in] 2008 and worse than both of those combined,” said Josh Bush, CEO of Avenue Two Travel, a family-owned luxury travel agency based in Villanova, Pa., with an office in Sewickley.
His agency spent the past two weeks safely bringing clients back early from their planned vacations.
“Three weeks ago, the travel industry was at its peak,” Mr. Bush said.
His family is using cash reserves to keep the business afloat until relief comes from the federal government or this pandemic subsides.
Brett Horowitz, president and owner of Olsen-O’Leary Travel in O’Hara, said it was the best of times before the pandemic, but he says “everybody is impacted.” His business model relies on corporate incentive travel.
“We are in a unique situation because we do reward trips or incentive trips for corporations,” he said.
His company had a client that was sending a group to Italy on March 31 for a week in the Amalfi Coast. Mr. Horowitz saw the writing on the wall.
“The group was about 150 people from that company going, but we were able to postpone the trip free of charge for the client before this came to America and the regulations were in place about traveling,” he said. “It hadn’t even been declared a pandemic yet. Right now, we are shooting for October for that trip.”
The company has had its fair share of cancellations on the leisure side of the business, too.
“Our survival plan is to keep our clients knowledgeable about what is happening around the world in relation to travel,” Mr. Horowitz said.
He is skeptical about many bargains arising once the virus has subdued.
“My fear is airlines and hotels will try to make up for their loses. I would like to think that is not true,” he said. “I’m a positive person, and I think this is out of our control and the industry will come back.”
Joe Weigler, owner of Shadyside Travel for 45 years, said he is not quite as optimistic. “I have never seen anything even approaching this scenario,” he said. “This has been going on, and I’m not sure there is a real end in sight at this point. The only fortunate thing is, we don’t have anyone stuck anywhere.
“We are going to need some kind of bailout, and hopefully the loans will include a forgiveness on salaries and the taxes that go with the employees’ salaries.”
Mr. Weigler estimates that he could keep his doors open a couple of months without help, but four months down the road would be devastating. He said he hopes things are better by July 1.
Travel Leaders, the largest travel agency organization in North America, has more than 4,000 employees and a U.S. network of approximately 50,000 travel advisers. Travel Leaders’ collection of businesses accounts for about $20 billion in annual travel sales. It is looking to the federal government and the $2 trillion stimulus package that was enacted Friday to help save some of their smaller agencies from going under.
Travel agents and airlines have a symbiotic relationship, according to Mr. Weigler.
“We are connected and it was cantankerous for a while, but it seems it is better, and up until this point, the airlines were making so much money [that] there was no reason to cut agents out from making bookings, because they don’t pay us anyway,” he said. “They are sympathetic with our plight right now, and we are sympathetic with theirs.”
All the major carriers that fly in and out of Pittsburgh International Airport have made adjustments to their schedules due to the pandemic.
“Due to the current low demand for travel, we have suspended service between San Francisco and Pittsburgh,” a spokesman for United Airlines said.
However, United is continuing to operate service between Pittsburgh and its other hubs in Chicago, Denver and Houston.
Southwest Airlines announced that it will cancel approximately 1,500 of the nearly 4,000 daily across its network.
Southwest has had no route suspensions except for international markets, where service is currently restricted and/or suspended due to government mandates, according to Southwest spokesperson Brian Parrish.
“We are implementing approximately 1,500 daily cancellations on routes of flights that have decreased demand, and the specific flights that are canceled may vary each day,” Mr. Parrish said. “Rest assured, any customer affected by a proactive cancellation will be notified by Southwest. We also encourage customers to check the status of their flights on Southwest.com.”
Allegiant Airlines, another carrier that services Pittsburgh, has cut about 15% of its capacity for April and May, but it is warning that reductions will come.
“The cancellations are occurring across our network, so the best way to stay up to date on flight changes is to check our website,” Sonya Padgett of Allegiant Media Relations said.
“The safety of our passengers and our employees continues to be our number one priority,” Mr. Bush, the Avenue Two Travel CEO, said. “We look forward to COVID-19 being behind us and the demand for air travel to return to levels that we saw just a few weeks ago.
“If we all stay home, the sooner we will be able to travel again,” he said. flights