-The industry is having to react to a big, dramatic,
and really quick change in demand for their product.
Having lived through 9/11, I can say it does feel like that
in terms of the just aversion for air travel.
People want to avoid spaces, and you can understand why.
Even though the demand destruction
that has happened is like 9/11,
I don't believe this event is like 9/11.
My name's Ben Baldanza.
I've spent my whole career in the commercial-airline business,
mostly in the United States.
For 11 years, I was the CEO of Spirit Airlines,
through their transformation into what the industry
now calls an ultra-low-cost-carrier model.
-Victor. -Bravo Victor.
-Then I teach a class at George Mason University.
It's a class called "Airline Economics."
And in the class, I teach the students the way airlines
make decisions across a whole range of ideas.
The industry was forced
to restructure dramatically after 9/11.
I worked at US Airways at that point.
Going into 9/11, we had 420 airplanes.
Coming out, we had 270 airplanes.
And that change was sort of mirrored
in a lot of the industry.
The industry structurally shrunk after 9/11.
And I don't see that happening to the industry right now.
There are fewer players now than at 9/11,
thanks to the consolidation that happened between 2008 and 2012.
And balance sheets are dramatically stronger
than they were at 9/11.
So most of the US airlines have a lot of cash.
They're making the decisions they need to make to protect
as much of that cash as possible.
Don't fly flights that are likely to lose cash.
In the very short term, meaning the next 30 days or so,
most of the airlines' costs are fixed.
They're paying for the airplanes.
Most of the flight crews,
the pilots and flight attendants,
have already bid for their flights,
meaning they've already chosen which flights they're gonna fly.
So the airline's committed to pay them for that.
The worst-case scenario would be maybe a 14-
or 30-day national quarantine.
Now, if you had no flights,
then airlines would be in a big hunker-down moment,
and you'd see a lot of people
temporarily maybe furloughed or let go,
or people not earning money in that time,
at least from their company,
with no revenue coming to the airline.
What's unclear is, on Day 31,
or when this ends, how do they get bookings?
How long will it take to rebuild the booking curve?
So a 30-day quarantine could end up being 60 or 90 days
of real economic pain for the industry.
I don't mean to be glib saying this,
but it doesn't really help to worry.
What helps is, like, what can you control?
And what I would worry about, if anything, is, are we doing
everything we can do?
Are we doing everything for our people,
for our customers, for our business,
for our balance sheet,
so that, at some point, when things reverse from this,
are we gonna be in the strongest position possible?
And have we thought of everything?
Can we do more?
I think there are a group of people
who are staying very close
to what's happening in Washington,
and if there is gonna be any sort of relief
for the airline industry, what does that look like?
-We have to back the airlines. It's not their fault.
In fact, they were having a record season.
Everybody was.
They were having record seasons, and then this came out.
And it came out from nowhere.
So, not their fault, but we're gonna be backing the airline.
Yeah?
-We've not seen anything exactly like this,
but I think there's a sense that,
at some point in the future, people will want to fly again,
and demand will be high again, and prices will be good again.
And we just don't know.
Is that May? Is that August?
Is that 2021?