United CEO Says Travel, Lodging, Hospitality at ‘Near-Depression Levels’

United Airlines CEO Scott Kirby appeared on national television Sunday, lobbying for an extension of the CARES Act stimulus package with a dire warning.

“Anything to do with leisure, hospitality, meeting, convention services [and] restaurants are all hurting and, frankly, are (at) near-Depression levels.”

Kirby’s comments came on the CBS program “Face The Nation.”

Kirby said that without the extension of federal grants and loans that airlines received in March, United still plans on laying off 16,000 workers on Oct. 1. Airlines were restricted from issuing furloughs or pay cuts until that date if they accepted the cash as part of the provisions of the original CARES Act.

The CEO noted that it’s “going to take a vaccine, and that’s just the reality” for demand for air travel to return to 2019 levels. “Some businesses can recover earlier, but in aviation and all the industries that we support, it’s going to take longer.”

Air travel is off 75-80 percent from last year’s numbers. Even the industry’s busiest day since March was still off more than 50 percent year over year.

“It was a remarkable bipartisan response really to rescue not just the aviation industry, but the whole economy back in March, an unprecedented bipartisan response,” Kirby said. “But this is lasting longer and is deeper than most people thought back then. And our revenue, we just said, is going to be down 85% in the third quarter. And in a world like that, United Airlines and others come Oct. 1, without an extension of the CARES Act … is going to be forced to lay off employees just to survive.”

Kirby said United is still burning $25 million a day and that revenue will be down 85 percent when third-quarter earnings are announced next month.

“In a world where we’re still burning $25 million per day, you just can’t go forever on that,” Kirby said. “And our view is demand is not coming back. People are not going to get back and travel like they did before until there’s a vaccine that’s been widely distributed and available to a large portion of the population. And I hope that happens sooner, but our guess is that’s the end of next year. And so you just got to survive those losses through that time and be ready to bounce back.”

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