Federal Infrastructure Bill Welcome News for Airports

Rising COVID cases lead airlines to mandate employee vaccinations, lower forecasts

By Matt Neistei

Published August 16, 2021

Read Time: 3 mins


The aviation industry welcomed the Senate’s passage of a $1.2 trillion infrastructure spending package last week, including a much-needed investment in airports.

The bill provides $20 billion for airports to address repair and maintenance backlogs, reduce congestion and emissions near ports and airports, and drive electrification and other low-carbon technologies, according to the White House.

“With the industry still recovering from steep losses resulting from the COVID-19 pandemic, these investments are more important than ever,” said Kevin Burke, president and CEO of Airports Council International–North America. “We applaud members of both parties for supporting this legislation in the Senate and urge the House to pass it.”

Burke said U.S. airports face more than $115 billion in documented infrastructure needs over the next five years. At least a couple dozen major American airports, including Pittsburgh International, are currently planning or in the middle of major construction projects to expand and modernize their facilities.

The average American airport is about 40 years old, according to ACI-NA, meaning they were built before smartphones, ride-sharing, 9/11 and other seismic changes in air travel that have reset security needs and passengers’ expectations.

The infrastructure bill will provide significant help in that regard, Burke said.

“Airports across the United States are grateful to senators from both parties for supporting an infrastructure bill that makes a much-needed down payment to upgrade their aging facilities,” he said.

Vaccinations required

Airlines continue to place passengers’ health and safety at the forefront as several carriers recently announced they would require employees to get vaccinated against COVID-19.

United Airlines was the first to make the move on Aug. 6, saying in a memo that its 67,000 staff members must be inoculated by Oct. 25 or risk being fired.

“We know some of you will disagree with this decision to require the vaccine for all United employees. But, we have no greater responsibility to you and your colleagues than to ensure your safety when you’re at work, and the facts are crystal clear: everyone is safer when everyone is vaccinated,” wrote CEO Scott Kirby and President Brett Hart in the memo.

Hours later, Frontier Airlines made a similar announcement, saying it will require employees to get vaccinated or provide proof of negative tests on a regular basis.

While most of the carrier’s employees are already vaccinated, Oct. 1 has been set as a deadline for the new policy.

“Safety is of the utmost importance at Frontier and we need to take every step possible for us to keep our teams safe, protect the operation and protect our passengers. The time has come to do what we can to help put an end to COVID-19,” CEO Barry Biffle said.

Hawaiian Airlines joined United and Frontier days later, saying employees must have their second shots by Nov. 1, although there will be exceptions made for medical and religious reasons, a caveat also made by United.

“It is not a decision I take lightly, and I would acknowledge that my own thinking on this has evolved over the last few months as I have watched this pandemic continue to take its terrible toll,” Hawaiian CEO Peter Ingram said in a note to employees.

Major carriers Southwest Airlines, American Airlines and Delta Air Lines said they do not currently plan to mandate vaccinations for employees.

Earnings worries

Rising numbers of COVID cases are weighing heavily on the bottom lines of some carriers as demand for air travel weakens.

In an Aug. 11 filing with the Securities and Exchange Commission, Southwest warned its third-quarter earnings might fall short of expectations.

“The Company has recently experienced a deceleration in close-in bookings and an increase in close-in trip cancellations in August 2021, which are believed to be driven by the recent rise in COVID-19 cases associated with the Delta variant,” the carrier said in the filing.

Southwest’s third-quarter outlook has dropped by 3-4 percent from only three weeks earlier, according to the filing.

A week earlier, Frontier — which just went public in the spring — said its second quarter exceeded expectations, but weakened demand led the airline to shift its positive third-quarter outlook to a prediction of “breakeven.”

“Within the last week, we have noted softening in the level of bookings over seasonal norms that we believe is directly related to the increased COVID-19 case numbers associated with the Delta variant,” the carrier said in a release accompanying its quarterly report. “The impact of the Delta variant on bookings, and the duration of that impact, are difficult to predict.”

National traveler throughput as reported by the TSA began to show signs of slippage last week, and some market analysts believe more airlines will be issuing guidance similar to those from Southwest and Frontier in the near future.

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