4 WORDS

Thinking there are four words critical to the airline industry's recovery: Customers; Employees; Cash; and Cost. In reality, the order is: Cash; Customers; Employees; and Cost. We all know from past distressed periods, cash is king.

Yesterday, Friday the 3rd of April was a bittersweet day for the industry. Applications for government grants were due at 5pm. Cash earmarked to preserve employment through September 30, 2020 is good for today but what about tomorrow? Cash that will likely prove insufficient to cover payroll costs based on the 2nd and 3rd quarters of 2019.

A condition of these monies is to preserve at least some service in all markets served as of March 1 in the name of preserving connectivity. But if there is no demand and very little connectivity in the system today, what is being accomplished other than forcing the industry to burn precious cash?

Then yesterday, DOT said in no uncertain terms that refunds must be repaid in cash, not credits. Think about an industry that sold seats in February for travel in the peak months of 2020. That could very well be a lot of cash out the door from another government action. Good for consumers now but bad for cash and employees.

Scott Kirby supposes right, 9/11 wasn't stressful enough. Cash remains king.