Many Airlines are Making BIG Budget and Staffing Cuts, Threatening the Future of Tourism

Disney4me · May 6, 2020

The global health crisis made an impact on the travel industry as a whole.

Star Wars United Airlines Plane ©United Airlines

Airlines and travel hubs around the world are suffering in particular and for those of us who use air travel as our preferred or only transportation option to the Disney parks, this can be confusing and may cause some worry. European airlines have started to make significant cuts to remain afloat and despite a $25 billion airline rescue package in the US, some domestic companies are doing the same.

Without a rescue package, European air travel companies are having to scramble to shoulder the brunt of the financial downturn. CNN Business calls the European cuts a “tsunami” of airline job losses. Ryanair, Lufthansa, British Airways, Scandinavian Airlines, and Air France-KLM could cut as many as 32,000 jobs in an effort to lengthen the lives of their businesses.

Maria & Enzo’s Ristorante ©Patina Restaurant Group

These numbers seem large, but when you consider the immense drop in flight demand, we start to see where these cuts become a possibility. Lufthansa CEO Carsten Spohr said that their flight schedule has “gone back in time” to levels not seen since 1955. 92% of its fleet is grounded and 3,000 of its daily flights are canceled.

British Airways echoes similar woes in an article to CNN Business. They may lay-off more than a quarter of their workforce as they expect that “the recovery of passenger demand to 2019 levels will take several years.”

In some cases, entire travel hub operations could be permanently ceased. Virgin Atlantic has opted to end its operation at Gatwick airport, a notable connection from Europe to Orlando. The company has made this call in an effort to elongate its lifespan, dropping over 3,000 jobs as well, per BBC.

Airline Check-In

And European airlines and travelers aren’t the only ones who are and will be seeing effects in the coming months. Some domestic airlines have had significant financial trouble, despite being partial recipients of the $25 billion airline rescue package.

How is it that these airlines are seeing job cuts and financial hardship despite receiving such a lofty amount of aid from the government? First of all, only some airlines — Alaska Airlines, Allegiant Air, American Airlines, Delta Air Lines, Frontier Airlines, Hawaiian Airlines, JetBlue Airways, United Airlines, SkyWest Airlines, and Southwest Airlines — are set to participate in receiving aid, according to the New York Times. Other airlines are going without aid.

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Disney’s Magical Express Bus

Plus, in some cases, the aid just isn’t enough. Just yesterday according to CNN Business, United Airlines told staff to take 20 unpaid days off before October and is considering layoffs of 30% of management and executive employees — despite being a recipient in the rescue package.

In an explaining statement, the airline said, “Travel demand is essentially zero for the foreseeable future and, even with federal assistance that covers a portion of our payroll expense through September 30, we anticipate spending billions of dollars more than we take in for the next several months. That’s not sustainable for any company.”

Of course, these cuts could have far-reaching ramifications for businesses outside of airlines too. General Electric is already cutting as many as 13,000 jobs in its jet engine business as demand has been devastated, according to CNN Business. MarketWatch cites the negative outlook at GE being the catalyst for a dive in stock. The aviation job cuts could be permanent for the company.

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Orlando International Airport

Beyond that, tourism may suffer as the economy gets back online. If airlines have significantly reduced availability, it may be more difficult to get from place to place. Naturally, this could affect a Disney vacation, especially for European and other international travelers. We’ll be sure to report in with further news from the airline industry as we examine how these layoffs and budget cuts could affect your Disney trip.