Booking Holdings CEO Glenn Fogel on Wednesday urged Congress to provide support to the airline industry, suggesting failure to act soon would prevent a swift recovery in travel after the coronavirus situation improves.
“I do believe the travel industry will come back. As soon as it’s safe to travel, people will start traveling,” Fogel said on CNBC’s “Squawk Alley.” “It’s really a function of how fast it will come back and how much damage to the industry. I see no reason that we should have to wait extra years because we took time putting money to work now.”
Fogel’s comments came shortly after a spokesman for House Speaker Nancy Pelosi said the California Democrat had spoken with the White House’s lead stimulus negotiator, Treasury Secretary Steven Mnuchin, about a standalone bill to provide aid to the airline industry.
President Donald Trump on Tuesday night said on Twitter that he would be willing to sign a $25 billion relief bill to help airlines protect jobs, hours after he pulled the plug on broader coronavirus stimulus negotiations “until after the election.”
Shares of the U.S. Global Jets ETF, which consists of major airline carriers, were up more than 2% on Wednesday. It was outpacing the benchmark S&P 500, which was higher by 1.3%.
Fogel, whose company provides online travel services, including flight booking, warned of larger economic consequences if widespread layoffs and furloughs hit the airline industry.
Already, major carriers such as United Airlines and American Airlines have begun furloughing more than 32,000 workers, following the expiration of the first batch of coronavirus aid from Washington, which prevented job cuts through Sept. 30. The companies said they will reverse the reductions that started last week if additional support is approved.
“When you start letting go your people, bringing them back is not easy. They may be elsewhere, so by not bringing that money to work now, we are damaging that industry. It makes no sense to me,” Fogel said. “We need to have a great air business. Why do we want to wreck it?”
The travel industry has been significantly impaired by the coronavirus pandemic. While air travel has improved since its nadir in April, a seven-day average of TSA screenings is still about one-third of 2019 levels.
A traveler wearing a protective mask exits from the United Airlines Holdings Inc. check-in counter at San Francisco International Airport (SFO) in San Francisco, California, U.S., on Monday, June 1, 2020.
David Paul Morris | Bloomberg | Getty Images
In August, Booking Holdings announced layoffs at its Booking.com, saying up to 25% of its more than 17,000-person workforce could be affected. Booking Holdings’ other brands include Rentalcars.com, OpenTable and Kayak.com.
In addition to support for airlines specifically, Fogel said there is a broader need across the travel industry for financial relief. “There’s so many jobs at risk, so when travel is safe again, we need programs or stimulus to help bring back this industry the way other governments are doing it,” he said.
“We are working right now with the government in Thailand and the government in Japan, and we have programs out there producing thousands, literally thousands, of travel bookings right now because it’s safe to travel there,” he added.
Shares of Booking Holdings were up about 1.9% on Wednesday to $1,741 per share. The stock is down about 15% so far in 2020.
Some critics say the government should not provide additional relief to airlines, citing potential long-term declines in travel or poor business decisions from management before the pandemic.
Others acknowledge the coronavirus-induced challenges for airlines and the travel industry, but believe they should not receive priority in stimulus talks over small businesses or other segments of the economy.
“Everybody needs the aid. … We haven’t gotten control of the spread of the virus,” University of Chicago economist Austan Goolsbee said on CNBC’s “Squawk on the Street.” “The unemployed need the money. Small business needs the money. … Personally, I’m not as big a fan of, ‘Let’s designate a whole bunch of money just for the airline industry,’ as opposed to more general rules.”
