Major Airlines Are Pleading To Drop Mask Mandates On Planes

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The CEOs of major U.S. airlines wrote a letter to President Joe Biden requesting that he drop the mask mandate on planes and testing requirements for arriving international travelers. If these requests are honored, investors would be wise to keep tabs on the travel space, which could witness a spurt in growth.

“It makes no sense that people are still required to wear masks on airplanes, yet are allowed to congregate in crowded restaurants, schools and at sporting events without masks,” the executives wrote.

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The following people signed the letter:

Ben Minicucci, CEO of Alaska Air Group
W. Douglas Parker, chairman and CEO of American Airlines
John W. Dietrich, president and CEO of Atlas Air Worldwide
Ed Bastian, CEO of Delta Air Lines
Peter R. Ingram, president and CEO of Hawaiian Airlines
Robin Hayes, CEO of JetBlue Airways
Gary C. Kelly, chairman and CEO of Southwest Airlines
Scott Kirby, CEO of United Airlines Holdings
Brendan Canavan, president of UPS Airlines
Nicholas E. Calio, president and CEO of Airlines for America
Scot Struminger, EVP and CEO of Aviation for FedEx Express

“Our industry has leaned into science at every turn,” they wrote. “At the outset, we voluntarily implemented policies and procedures—mandating face coverings; requiring passenger health acknowledgements and contact tracing information; and enhancing cleaning protocols—to form a multi-layered approach to mitigate risk and prioritize the wellbeing of passengers and employees.”

The CEOs reminded President Biden of their support for the Centers for Disease Control and Prevention (CDC) as they also imposed additional measures, such as pre-departure testing and vaccination requirements for international travelers. However, amidst the “persistent and steady decline of hospitalization and death rates,” according to the CDC and World Health Organization (WHO), they’re asking for the president to reconsider requirements.

“Given that we have entered a different phase of dealing with this virus, we strongly support your view that ‘COVID-19 need no longer control our lives,’” they wrote. “Now is the time for the Administration to sunset federal transportation travel restrictions—including the international pre-departure testing requirement and the federal mask mandate—that are no longer aligned with the realities of the current epidemiological environment.”

These wouldn’t be the first airlines to ease up on rules and regulations. Dutch airline KLM just announced that it will no longer enforce face masks onboard. Recently, Virgin Atlantic and British Airways also announced their plans to forgo face masks, following the footsteps of Jet2, which became the first British airline to ditch ’em.

Some other areas of the travel space in the U.S. have also started to soften COVID concerns. For example, the CDC dropped COVID health warnings for cruise ship travelers—a health notice they’ve required since the onset of the pandemic in March 2020.

The U.S. government was supposed to lift the mandate on March 19th, but it extended the requirement on planes and in airports (as well as on buses, trains and other modes of transportation) through April 18th.

If Biden does, indeed, remove mask requirements—rather than waiting until late April or pushing the date again—airlines may start to see more travelers. Never mind that, as the weather warms, industry insiders anticipate that travel will pick up again, just as it did last spring and summer. In fact, Expedia Group CEO Peter Kern predicts that this will be the busiest summer yet—and 2023 will be the year that we stop awaiting industry recovery and start living it.

“Summer 2022 will be the busiest travel season ever,” he told Bloomberg. “We’ve been talking about pent-up demand for a long time but, until now, there have been too many restrictions in place for people to do too much with it.”

He added the airlines are expecting to reach historic heights again by August. While prices will be high, he believes that people are planning to pay them anyway for the sake of finally getting away again. And he’s not alone in thinking so. The World Travel & Tourism Council (WTTC) also predicts that the industry will exceed pre-pandemic levels by 6.2 percent, accounting for nearly $2 trillion in gross domestic product in the U.S. Meanwhile, over in Europe, the data suggests that summer 2022 bookings have already far surpassed 2021 numbers by at least 80 percent.

Michael O’Leary, CEO of the popular European budget airline, Ryanair, recently said that he, too, expects this summer to yield 115 percent of the passenger volumes that his company recorded back in 2019 before all the COVID chaos.

It’s no surprise that the pandemic took a devastating toll on tourism and the vast majority of the travel and leisure industry. Back in 2020, the World Economic Forum warned that COVID could set the global tourism industry back 20 years. And, at the time, no one even expected the pandemic to persist for as long as it has since.

Back before this all started, in 2017, the U.S. travel and tourism industry generated over $1.6 trillion in economic output. In 2019, the sector contributed 10.4 percent to global GDP. But it suffered losses by the trillions throughout the COVID crisis—and airlines, in particular, we’re hit hard.

Major airlines’ stocks have plummeted amidst the mayhem. They started falling almost immediately. In March 2020, for example, American Airlines stock dropped 25 percent over COVID fears. While investors believed that some airlines were “too big to fail” at the start of all of this, almost all of them saw their stocks take a tumble over the last two years. It took until July 2021 for Delta to make its first profit again since the start of the pandemic.

Most of these stocks remain far below their pre-pandemic highs and would need to significantly rally to get to where they want (and, frankly need) to be again. But, as a result of ongoing volatility in global crude oil, the fuel price surge dealt already-fragile airlines another heavy blow, making a recovery ever more challenging.

However, because U.S. airlines like United, Delta and American are largely seeing demand tick up, increased travel could help to offset jet fuel price jumps. And easier travel can certainly lead to increased travel (while still practicing safety standards and implementing protocols to keep passengers well on their way in the healthiest way). Never mind that a government directive to drop masks may make people presume that travel is also safer, since the government says it’s okay, even if the move makes for more cases down the line.

Investors should watch to see what happens with airlines as the U.S. government reconsiders requirements—or what happens if it doesn’t. Either way, stocks in this space are sure to move the markets in one direction of the other.

In the meantime, can help investors diversify their investments. Investors could consider Kits like the Clean Tech Kit, as the world looks toward renewable energy amid fuel surge charges. Meanwhile, the Inflation Kit provides a defensive bunker against the inflating dollar.

Whatever investors choose, however, offers a number of AI-powered strategies that work to offset risks amid market volatility and economic uncertainty.

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