The fate of workers at Minneapolis-St. Paul International Airport could be shaped this week by decisions in Washington. The fate of the airport may hinge on some made months from now in Atlanta.
Few industries have been more devastated by the global health crisis than aviation, which supports a vast ecosystem of local jobs far beyond pilots and flight attendants and the workers at MSP.
This week, the federal aid package created this spring for airlines, aviation contractors and their workers will expire. Congress and the White House are negotiating further aid, with airlines and other businesses threatening huge job cuts without it.
Airline trade groups along with flight attendant and pilot unions are lobbying for another six months of help and Republicans last week proposed $28 billion in new aid.
Even with additional government assistance, airports and airlines don’t expect a significant uptick in revenue until travelers start flying again in greater numbers, which isn’t anticipated to occur until there is a vaccine widely available to the public.
“We’re in purgatory right now, especially in travel,” said Kyle Potter, the Minnesota-based editor of the Thrifty Traveler website.
“Everyone is just trying to buy time until we can, at some point, get a therapeutic vaccine. When daily life gets close to normal, that’s when travel will return,” he said.
Nationally and at MSP, air travel is about 70% below where it was a year ago. That’s better than this spring but not enough to sustain the airline industry as it existed before the pandemic. Industry executives believe air travel will remain deeply contracted for the next two to three years.
That prospect has raised a fear that haunted the Twin Cities business community in the past: that executives at Atlanta-based Delta, the nation’s most profitable airline, may decide — or be forced — to downsize MSP’s role as one of its main hubs.
Delta executives have sent mixed signals and cautioned nothing is certain about the industry’s future. Local business leaders have been pressing the airport’s case with the airline and seeking reassurance for months.
“Protecting our airport hub status is a top priority,” said Peter Frosch, chief executive of Greater MSP, which champions the region’s business interests.
Feben Ghilagaber loved her job as a server at the Chili’s restaurant in the airport before the pandemic — travelers were friendly, the pace was brisk, and the money consistent. Now, the airport “looks like a ghost town,” Ghilagaber said, noting her hours have been slashed, and she worries that she may be laid off.
The pandemic created a watershed moment for air travel, more consequential than 9/11 and the last recession in 2008.
“This is truly historically unique. [The last pandemic in] 1918 predates modern commercial aviation, so we are in uncharted territory,” said Adie Tomer, an infrastructure fellow at the Brookings Institution. “Because tourism has been so decimated, aviation is really caught up in the tsunami of economic pain.”
MSP ended 2019 with a 4% jump in passengers to nearly 40 million, marking the third straight year of record passenger volumes. Airlines started new international nonstops from MSP in 2019 to Dublin, Mexico City and Seoul.
And the airport itself was on a roll, despite problems with long lines at security checkpoints.
Following a three-year overhaul of its shops and restaurants — many of which bore a local imprimatur — MSP snagged the industry’s highest award for excellence. The airport’s sleek bathrooms, complete with Minnesota-inspired art mosaics, were voted the best in America. And the $1.6 billion multiyear overhaul wasn’t done: The vintage departure and baggage areas were finally being updated.
2020 started off even stronger at MSP, with a 6.5% jump in passenger volume in January and a 9% gain in February. But as the outbreak spread in March and April, passengers canceled flights and airlines downsized their routes and parked planes. In May, MSP’s passenger volume was 92% lower than a year earlier and last month the decline was 70%.
Over the last several months, airlines have revealed their financial situations, which vary greatly. Some economists and critics argue the U.S. government should let the aid expire next week — and that it’s time for the airlines to turn to the private market for funding, which many of them have.
Over the next two years, Tomer predicts airlines will make geographic shifts in service that could result in fewer U.S. cities having major airline hub operations.
That’s why MSP officials and regional boosters have been quietly lobbying Delta to maintain its large presence at the airport, where it accounts for about 7 out of 10 flights.
“Any airport will give its eyeteeth to have a strong hub carrier and I believe that is one of the key strengths here,” said Rick King, chairman of the Metropolitan Airports Commission (MAC), which owns and operates MSP. “We will fight very hard to maintain that status.”
In a nod to the economic pain experienced by airlines serving MSP, some $40 million in fees and rents paid by the airlines to the airport are likely to be waived by the airports commission later this fall.
Delta’s footprint in the Twin Cities has been a sensitive subject since it merged with Northwest Airlines, which was based in Eagan, in 2008. Contrary to local fears, Delta expanded the number of flights at MSP, making the airport its second-largest hub after Atlanta.
Asked for a comment about MSP’s status last week, a Delta spokesman said, “We feel good about its position. We see it as an asset that will allow us to spool operations back up quickly when demand returns.”
Yet Delta executives have been careful in cautioning rigid predictions given the choppy recovery expected ahead. The economic health of the Twin Cities and Midwest will play a role, they note. If medical technology, financial services, retail, food and other industries with a large representation in Minnesota come out of this pandemic on a solid financial footing, so likely will MSP.
Earlier this month at an investor conference on what Delta’s company and network would look like in three years, Paul Jacobson, the airline’s chief financial officer, said, “The consumer is going to determine how big we are, where we fly and how we fly.”
Delta has gradually restarted service at MSP throughout the pandemic from its low of about 80 daily flights in May to a scheduled 260 in October, or about 65% of its pre-pandemic service.
By being a hub, MSP gets a disproportionate number of Delta flights connecting through its gates. As a result, the airport — and Twin Cities travelers — have access to more nonstop destinations than the local population alone could support.
Frosch of Greater MSP said, “This is a very unusual, intense moment that we will transition out of into something new. So we are trying to make good decisions together today and do that with a longer-term view.”
Imminent turning point
In recent weeks, the number of people screened at MSP’s security checkpoints has increased on Fridays and Sundays, indicating a boost in leisure travel. “I get the sense that people want to travel,” said Brian Ryks, chief executive of the MAC.
Delta also has indicated it will reinstate its nonstop route to Amsterdam late next month with plans for London, Paris, Tokyo and Seoul in the spring of 2021. In the meantime, the MAC is doing its part to improve cleanliness at the airport, particularly in high-touch areas such as restrooms. Its “Travel Confidently” campaign, launched in July, added sanitizing stations, floor stickers to spur social distancing, and shield guards where travelers interact with employees. Every night, the airport’s two terminals undergo an electrostatic disinfectant fogging. And masks or face coverings are now a staple at MSP.
But despite the new cleaning efforts, a steady stream of notices were filed with the Minnesota Department of Employment and Economic Development (DEED) this summer, warning of planned mass layoffs at a number of airport vendors and concessionaires, from restaurants to de-icing operators to airline food cooks and caterers — threatening MSP airport’s vitality.
Misrak Anbesse, a passenger service assistant at MSP, has seen her hours cut drastically and co-workers laid off. “It was a busy airport,” she said. “Now, it is quiet and slow.”
Anbesse works two jobs to pay her mortgage and support family, so she hopes to hang on to her airport gig. “I couldn’t imagine it would be like this,” she said.
Neal Gosman, who works for the Transportation Security Administration at the airport, says workers are fearful of layoffs if TSA is not fully funded by Oct. 1, the beginning of the federal budget year. “We’re quite concerned,” said Gosman, treasurer of Local 899 of the American Federation of Government Employees, a union representing TSA workers.
After some TSA employees’ hours were cut at MSP as the pandemic dragged on, Gosman said, “We’re waiting for the other shoe to drop.” A spokeswoman said TSA Administrator David Pekoske has stated on multiple occasions that he has no plans to furlough any TSA employees.