Feb. 8—ROMULUS — In coronavirus-slammed 2020, Detroit Metropolitan Airport handled its lowest number of travelers in 36 years — and experts fear travel through many of the nation's major hubs, including DTW, might not return to normal until 2023 at the earliest.
Airport officials here say they expect evidence of some turnaround to mount this year. But the pace of the recovery will depend on the success of vaccine distribution worldwide, the ability to combat new mutant strains and how comfortable travelers feel resuming business trips and vacations.
DTW's final 2020 passenger count of 14.1 million people is lower than any year since 1984, when the airport counted 11.3 million passengers. The Wayne County Airport Authority that operates the airport projects it will serve 22 million passengers this year — an improvement from the historic lows of 2020, but still far from the roughly 36 million passengers who moved through the airport in 2019.
"We are in the end of the worst part," said Burkett Huey, MorningStar aviation analyst, adding vaccine distribution is expected to have "a very immediate impact on travelers' willingness to travel."
This is not an insignificant challenge. An engine of the regional and state economies, Metro's prospects for long-term recovery carry implications for Metro Detroit and the state as a whole: as a major international airport and hub for Delta Air Lines Inc., the world's largest carrier, the airport represents an estimated economic impact of more than $10 billion annually.
"We are expecting a slow recovery," Erica Donerson, vice president of communications and external affairs for the authority, told The Detroit News. "But we are anticipating growth in 2021."
Last year's dismal passenger count is a 62% drop from the tally for 2019. Of those 14.1 million passengers, 9.3 million — or 66% — flew in January and February, before cases of the virus and the disease it causes, COVID-19, were first confirmed in the state in March.
'Worst year in history'
DTW is not alone. The International Air Transport Association reported last week that 2020 ranks as the worst year in history for air travel demand, by one metric falling 65.9% compared to 2019. North American airlines' full-year traffic dropped 75.4%, according to IATA.
And in a sign that the industry continues to face headwinds, the association reported bookings for future travel made last month were down 70% compared to a year ago. The U.S. Travel Association says the travel and tourism industry lost $500 billion and 4.5 million jobs in 2020.
Last year was "easily" one of the worst years the industry has seen, Morningtar's Huey said, surpassing the impact of the 9/11 attacks on airlines, airports and the aviation industry. The effects of that tragedy generally didn't last as long and weren't as widespread. Experts don't expect the industry to return to 2019 levels until 2023 or 2024.
The pandemic is expected to lead to long-term changes for airlines and airports — including making increased cleaning and mask-wearing standard. But Huey says don't expect that pesky middle seat to go away: Airlines want to fill airplanes.
"I'm suspecting what is probably going to happen is there's going to be a little bit more care spent in between when you land and you disembark," he said. "I wouldn't be surprised if disinfectant gets sprayed across the plane over the long term."
After not flying for two years, Lauren Riggs, 23, of Richmond took a leisure trip to Disney World two weeks ago and then went on a work trip to Atlanta. She wasn't apprehensive about going because she "needed to get out of Michigan."
Riggs noticed increased cleaning measures on the airlines and in the airports. She was relieved to see a smaller crowd going through security and on the planes, where middle seats are open.
"The airports are empty," she said. "COVID sucks. I think everyone can agree with that. But it's kind of made the flying experience a little less awful."
As the pandemic intensified last year and passengers disappeared, airlines burned through cash as revenue evaporated and many costs remained. One result: mass layoffs. The actions may not be over, despite federal stimulus helping airlines keep employees on payroll. American Airlines Group Inc. might have to lay off 13,000 employees again this summer, Bloomberg reported last week. United Airlines Holdings Inc. also told 14,000 employees layoffs were a possibility.
"The story from a financial perspective is that they're working to really reduce their overhead so that when you come out on the other end of this they look substantially more profitable than they did coming in," Huey said. "That's their pitch to investors."
Battling the losses
The Wayne County Airport Authority is projecting a 39.1% drop in non-airline revenue decline and an 18.3% decline in operating expense for fiscal year 2021 from its original budget for fiscal year 2020. The authority declined to comment on actual 2020 revenue numbers until a financial audit is complete next month.
To offset losses and reduced traffic in 2020, the authority cut training and discretionary spending at the airport, whose operations are funded by landing fees, airline fees, rental car fees and parking, among other things. Reductions included shuttle expenses and valet parking, which are not being heavily used during the pandemic.
Those cost-saving measures remain in place. The authority also deferred some construction projects that were to be completed in 2020.
"We suspended certain capital projects to reduce our operating expenses; in some cases, projects were placed on hold to comply with the state stay-at-home orders," Donerson said. "Work that wasn't related to human safety or critical aircraft operations was placed on hold, but now all of those projects are back on track."
The authority laid off 17 non-union employees last year due to the pandemic, but Donerson said cost reductions prevented further layoffs through the end of the year. No additional staffing cuts are expected at this time. And in another bid to reduce costs, the authority eliminated "dozens" of vacant positions, Donerson said. In all, the authority employed 604 people at the end of December, compared to roughly 685 employees a year earlier.
The airport received $142 million last year through the Coronavirus Aid, Relief and Economic Stimulus (CARES) Act. In December, the Federal Aviation Administration announced a $2 billion grant program for airports, but DTW doesn't know how much or when it will receive that funding.
"There's a lot of factors that will impact the rebound of our industry," said Donerson, including ongoing vaccinations. "We do believe that vaccinations will impact the comfort level of travelers. But that's just one of the factors; there's also a need for funding for airlines as well as airports around the country to start to rebound.
"We're just hoping," she added, "that more people will feel comfortable when the pandemic ends and will return to the airport and use it as they have in the past."
Some travelers already feel comfortable returning to airports. Jamila Seman, 40, of Wixom, last week flew from DTW to Florida, "just to get away."
"I flew Delta, and I felt very safe," she said. "It was very clean in there. It wasn't overcrowded. They had probably 50 people on the plane, and the plane was the biggest they had."
Seman was impressed by such touches as the airline handing out hand sanitizer to passengers multiple times. And there are designated areas in the terminal where travelers could enjoy socially distanced drinks. For the most part, the airport was "dead."
"I would fly again," she said. "I wasn't scared."
Hoping for 'normalcy'
Jeff Katofsky, owner of the Delta Hotel at the airport, hopes for some return to "normalcy" this year after having to close the hotel in August because business was too slow.
"If there's less flights, there's less crew," he said. " Detroit's a major hub so you have literally thousands of crew people staying in that marketplace every night. That's a big part of the business in that market for those couple of dozen hotels, us included ... so you're not just losing the business traveler you're losing the crew members."
He wants to reopen the Delta hotel in March. He also owns the St. Clair Inn that he hopes he can open this spring.
"The key is we've got to get vaccinated," he said. "We've got to fix that problem. As soon as that gets done right, we'll get back to some form of normalcy. I'm hoping that's mid-to-late summer this year."
Inside the airport, two businesses in the McNamara Terminal will permanently close at the end of this month, Donerson said, declining to say which ones.
Zingerman's Coffee Co., part of the Ann Arbor-based Zingerman's business group, has seen its overall airport business plummet about 50% from normal levels. Zingerman's is part of a co-branded storefront with Plum Market at DTW. It's also a wholesale supplier for airport vendors at DTW and other airports across the country.
Managing partner Steve Mangigian said the company saw its business at DTW start to tick up last fall. It's been "slow but steady and slightly increasing as we move forward."
Still, he is not expecting a return to pre-pandemic revenue levels until late 2021. And though the long-term effects are still unknown, he expects the business to be permanently altered by the crisis.
"We do not anticipate returning to pre-pandemic revenue levels without significant investment in business development which we are actively engaged in," he wrote in an email. "In other words the pandemic contributed to what I consider to be a permanent 20% to 25% loss."
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