Mnuchin: “Too hard to tell” when international travel will resume as coronvirus ravages airlines

As the ongoing coronavirus (COVID-19) continues to wreak havoc on the airline industry, Treasury Secretary Steven Mnuchin advised Americans to focus on domestic travel this year. According to Mnuchin, the international travel outlook for the rest of the year remained uncertain.

Responding to a question from Fox Business Network‘s Maria Bartiromo on whether international travel would be opened up this year, he stated that it was “too hard to tell at this point.”

The Treasury secretary later clarified that there may be room for limited international travel for “business people that need to travel,” explaining that it would be allowed “on a limited basis.”

Fly domestic once it’s safe to do so

Given the slew of government travel warnings and international travel restrictions, as well as limited international flights, travelers looking to go abroad are faced with very few options. In late March, the State Department issued its highest alert level for international travel. The advisory, which remains in place to this day, told Americans to avoid all international travel.

While many states also have their own restrictions in place, Mnuchin hailed domestic travel as a better option, especially as a way to boost local economies.

“The president’s also looking about ways to stimulate travel. We want people to travel safely, to be able to visit places safely,” Mnuchin stated. “So as the economy opens up, I think you’ll see demand coming back. Our priority is opening the domestic economy.”

Airline executives, however, see little sign of near-term travel demand. On Friday, United Airlines President Scott Kirby stated that travel demand is essentially “zero.” He also cautioned that this scenario could last until 2021.

Kirby and Southwest Airlines CEO Gary Kelly said that there was little impetus for most people to travel, even within the country, until they have things to do at their destinations, such as visiting tourist attractions such as Disneyland or eating at restaurants.

Mnuchin, however, remains optimistic, stating that “this is a great time for people to explore America. A lot of people haven’t seen many parts of America.”

“I wish I could get back on the road soon,” he added.

Airlines look for additional relief

Instead of waiting for a surge in domestic travel that may not arrive, many U.S. airlines are looking to the federal government to provide them some form of relief.

On Wednesday, a lobby group representing U.S. airlines stated that federally mandated minimum service requirements are “unsustainable” for them, as the ongoing pandemic has sent passenger numbers to levels not seen since the 1950s.

Currently, U.S. carriers must maintain a certain number of flights, if they wish to receive portions of the $25 billion in federal payroll grand and loans under the coronavirus rescue package. The number of flights varies depending on the carrier.

The Department of Transportation has issued some waivers. However, Nicholas Calio, CEO of Airlines for America which represents Delta, American, United, JetBlue, Alaska, Hawaiian and Southwest, said that these weren’t enough.

In a prepared testimony ahead of a Senate hearing, Calio stated that “the cost associated with operating nearly empty flights to communities with little to no demand significantly exacerbates air carrier liquidity.”

According to Airlines for America, even with the reduced requirement, U.S. airlines are averaging only about 17 passengers per domestic flight.

“We would ask both this Committee and the Administration to seek solutions to address the challenges posed by this unsustainable requirement,” he added.

However, Calio told lawmakers that the airlines are not planning to seek additional federal aid to weather the ongoing pandemic.

Sources include:

USAToday.com 1

USAToday.com 2

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CNBC.com