Delta CEO says demand 'at a stall,' 2019 business travel may never return
Well boys, here we are 2 months into my original thesis. Airline bailout money is starting to run dry. All the majors are sending out furlough notices to large portions of their work force. Demand is plateauing. Many corona hot spots (which happen to coincide with popular vacation spots) are shutting down their economies once again, and this is during peak travel season. The outlook for commercial air travel is pretty bleak, so much so that even the Delta CEO can't help but read the writing on the wall. TSA screenings averaging ~28% what they were one year ago. The low in screenings was just under 4% YoY, so ridership has increased 7x off the low. Admittedly, I didn't think we'd be this high right now. However, it's important to note that this is with all the bailout money that has allowed the airlines to operate at a substantial loss. In the article, the DAL CEO mentions they are still one of the only big airlines blocking off the middle seat, but they can't make any money running flights at 60% capacity so they will have to do away with the policy shortly.
Meanwhile, on main street, the unemployment checks are still flowing, so the hit to the real economy hasn't become blatantly obvious yet. Even with the unemployment checks, delinquencies and forbearances are at alarming rates. Even in the most saturated markets like SFO, rents are falling as people flee high COLA areas. SFO rents plunged 11.8% YoY. 25% of NYC renters have not paid rent since March, leaving 39% of landlords unable to pay their property taxes. The number is expected to rise once the extra $600/week unemployment expires at the end of the month. Inevitably, many landlords that don't own their properties will take losses that bankrupt them, shifting the losses to the lender. As more and more businesses shut down, commercial real estate will also take a huge hit, and once again the banks that lent the money will have to take huge losses as well will undoubtedly require the largest bank bailout in history as all banks are completely insolvent.
This is just a little teaser of what's to come. I hope I'm wrong, but I'm certain I am not. I would like to work real traffic before my career is over and I am confident enough in my thesis that I am going to put in for the N90 open bid. Rent is going to be so affordable on LI by the time I get there that I might as well just go for it. Plus, like I said in my OP, it'll be an easy checkout and have great staffing in 5 years as a result of the decreased traffic and amount of trainees currently in house.
The surge in overdue payments is one facet of the crisis that COVID-19 has created in the Big Apple’s housing market that’s harmed both tenants and landlords.
nypost.com
