American Airlines, Southwest Airlines and Alaska Airlines said their operating revenues were down about 70 percent in the three months through September compared to the same period last year, as the industry braces for a slow holiday season. American lost $2.4 billion over the quarter, while Southwest lost more than $1.1 billion and Alaska lost more than $430 million.
Air travel has improved somewhat steadily since early summer and reached a symbolic milestone on Sunday, when more than 1 million people were screened at federal airport checkpoints for the first time since March. But passenger volumes across major U.S. airlines are still down about 65 percent from last year, according to the industry group Airlines for America, and are expected to remain deeply depressed for the foreseeable future.
“Until we have widely-available vaccines and achieve herd immunity, we expect passenger traffic and booking trends to remain fragile,” Southwest’s chief executive, Gary C. Kelly, said in a statement. Doug Parker, American’s chief executive, agreed: “We have a long road ahead.”
Southwest also said it would start filling planes to capacity again starting Dec. 1, after capping seats in the spring. Delta Air Lines is expected to stop blocking off middle seats in the first half of next year, its chief executive said last week. United Airlines and American are not limiting seats.
Flights in the United States are carrying an average of about 74 passengers each, down from about 99 last year, according to Airlines for America. Carriers are losing about $200 million per day; those losses are expected to shrink but will continue through the winter and into next year. American said it ended September with nearly $14 billion in cash and other available liquidity, while Southwest had more than $15 billion.
Airlines have survived the sustained slowdown by tweaking operations, making last-minute changes to flight schedules to match demand and slashing costs, largely by encouraging tens of thousands of industry workers to take buyouts or pay cuts. This month, United and American furloughed more than 32,000 workers. With hopes of a second federal stimulus seemingly dashed, the industry will have to make do with less as it prepares for what is widely expected to be a dismal winter.
The government reported on Thursday that 757,000 workers filed new claims for state unemployment benefits last week, a drop of 73,000 from the previous week but still a stubbornly high rate as the incipient economic recovery struggles to maintain a foothold.
Another 345,000 new claims were filed under a federal jobless program that provides benefits to freelancers, part-time workers and others during the pandemic. Neither figure is seasonally adjusted.
On a seasonally adjusted basis, new state claims totaled 787,000.
The dip in claims was welcome, but the numbers still eclipse the levels reached in previous recessions. Altogether more than 23 million Americans are receiving some form of unemployment relief.
“Some recovery is better than no recovery, but we want this to be stronger,” said Ernie Tedeschi, managing director and policy economist for Evercore ISI. “It’s at risk of getting knocked off its slow momentum if we get another shock, another wave of the virus.”
Seven months into the pandemic, the nature of the job losses is changing. The hope that business interruptions would be brief and that most laid-off workers would quickly be rehired has faded. Every week, more Americans join the ranks of the long-term unemployed, defined as those out of work for more than 27 weeks.
Workers no longer eligible for state unemployment insurance can still receive 13 weeks of benefits under the federal Pandemic Emergency Unemployment Compensation program. As a result, some reductions in state jobless rolls may not mean that people are back at work, but rather that they have shifted to the federal program, Mr. Tedeschi said.
This latest report comes as coronavirus cases are again surging in the United States and as a second round of federal relief faces opposition from Senate Republicans over a possible $2 trillion price tag.
“The claims remain very elevated, and the lack of continuing fiscal aid for the unemployed is going to weigh on consumer attitudes and consumer spending,” said Kathy Bostjancic, chief U.S. financial economist at Oxford Economics. “It’s a very painful reality for those households who were relying on it.”
John Michael Purdon is temporarily working as a substitute teacher near his home in Barnegat, N.J., but that was not the plan. Mr. Purdon, 22, graduated in April from the University of Pittsburgh and expected to be in a nursing residency at the Children’s Hospital of Philadelphia, “but right now, hospitals don’t have the money.”
On June 1, before he found the teaching gig, he applied for unemployment benefits. They didn’t arrive until the end of August, he said.
In his view, the economy is faltering in part because of the government’s mismanagement of the coronavirus pandemic. “I’m a health care professional myself,” he said, and “certain things were overlooked in trying to rush the economy back too quickly.”
Mr. Purdon voted for President Trump in 2016 but said he had already cast a vote for Mr. Trump’s 2020 opponent, Joseph R. Biden Jr.
States around the country, overwhelmed by applications, have struggled to deliver benefits to laid-off workers.
California, which had reported the highest number of claims, stopped accepting new claims for several weeks while it revamped its system to whittle down the backlog and to institute fraud-prevention measures.
The Labor Department’s report on jobless claims, which aims to summarize information provided by the states, is the best official accounting available, but it is a flawed estimate. During California’s hiatus, for example, officials used the last reported figure as a place holder.
States also have different accounting methods, some applicants may be double counted, and there have been reports of widespread fraud — particularly in the federal Pandemic Unemployment Assistance program, which Congress approved in March for freelancers, the self-employed and others ordinarily ineligible for state benefits.
This week, the Justice Department said it had brought 12 cases of fraud or money laundering related to unemployment insurance. State prosecutors have also brought cases.
People laid off or furloughed because of the pandemic increasingly fall into two categories: those who have returned to their old jobs, and those who doubt they ever will.
Just over half — 53 percent — of those who lost jobs during the coronavirus crisis have returned to work, according to a survey conducted this month for The New York Times by the online research firm SurveyMonkey. That is up from 38 percent in August, and it is consistent with government data showing that the United States has regained a bit more than half the jobs lost last spring.
Among those still out of work, however, just 39 percent say they think they will go back to their old jobs.
The gap between the two groups is stark. People who have returned to work say their finances have held up relatively well, and they are about as optimistic as people who never lost their jobs. Nearly one in four say their finances have improved in the past year, a possible reflection of the stimulus checks and extra unemployment benefits that helped workers early on in the pandemic.
Most who are still out of work, however, say their financial situation is worsening. A third say that their unemployment benefits have expired, or that they tried and failed to get benefits. As a group, the unemployed are pessimistic not just about their finances but about the economy as a whole.
Economists say those workers are right to worry. In a speech on Wednesday, Lael Brainard, a Federal Reserve governor, warned that as more layoffs become permanent, job growth is likely to slow, as it has begun to do.
“The job-finding rate for those who are permanently laid off is less than half the rate of those on temporary layoff,” Ms. Brainard said, “so the speed of labor market improvement is likely to decelerate further if these trends continue.”
The pandemic-fueled boom in online shopping has been accompanied by a spike in complaints about scams originating on social media, especially Facebook and Instagram, according to the Federal Trade Commission.
Reported losses from such fraud reached a record high of nearly $117 million in the first six months of 2020, compared with $134 million in all of 2019, the F.T.C. said on Wednesday. The top sources of complaints were e-commerce sites that never delivered goods to consumers, many of whom said they had found the sites through Facebook or Instagram, which Facebook owns.
“These scam ads look real and can be carefully targeted to reach a particular audience,” the trade commission said in a report. “The scammers can delete comments on their ads or posts so that negative responses don’t show up and alert people to the con.”
People also reported losing money through so-called romance scams, in which fraudsters develop online relationships with people to obtain money from them, and through social media messages that offer “supposed economic relief or income opportunities,” the F.T.C. said.
The overall number of reports that people lost money to scams starting on social media in the second quarter more than tripled from a year earlier.
U.S. stock futures indicated that indexes on Wall Street would trade lower when markets opened on Thursday, following a decline yesterday. European markets fell and Asian stock indexes ended the day mixed.
The Stoxx Europe 600 index fell 0.5 percent before paring some losses. Germany’s DAX and Britain’s FTSE 100 dropped 0.1 percent, while France’s CAC index wavered between gains and losses.
U.S. jobless data released Thursday showed that new weekly claims dipped below 800,000 last week, a drop from the previous week but still a high rate.
The possibility of a deal on a stimulus package before the U.S. presidential election appeared to get slimmer on Wednesday, after President Trump said on Twitter that he didn’t see a way senior Democrats would let it happen. However, the talks are continuing.
Tesla’s share price rose more than 5 percent in premarket trading, after the electric car company reported on Wednesday a profit for the fifth consecutive quarter, putting it on track to report its only annual profit since its founding in 2003.
European government bonds fell and their yields rose on Thursday, after the first sale of the bloc’s new bonds that will be used to fund pandemic economic relief. The European Commission sold 17 billion euros ($20 billion) in 10-year and 20-year bonds, the first of a series of issues that will raise a total of €900 billion during the next five years.
American Airlines, Southwest Airlines and Alaska Airlines reported Thursday that their operating revenue fell about 70 percent in the three months that ended in September. The stock of Southwest rose slightly in premarket trading, but shares in American and Southwest declined.
IAG, the owner of British Airways and Iberia, said on Thursday that its revenue was down by more than 80 percent in the third quarter compared with a year ago and the planes were only about half full. The airline group also said that it would further cut capacity for the rest of the year to just 30 percent of last year’s capacity, and so wouldn’t break even in its cash flow from operating activities. IAG’s shares fell 13 percent at the start of trading, before reversing those losses.
A pension fund for Pennsylvania teachers said it had frozen new investments with Apollo Global Management amid concerns about ties between its founder, Leon Black, and Jeffrey Epstein.
The $63 billion Pennsylvania Public School Employees’ Retirement System said it spoke with Apollo officials last week after a New York Times report detailed the financial ties between the two men. Mr. Black made at least $50 million in payments and donations to entities affiliated with Mr. Epstein in the years after Mr. Epstein’s 2008 conviction for soliciting prostitution from a teenage girl.
Mr. Black has said the fees he paid were for services such as estate planning and philanthropic advice. In a letter to investors after the report was published, Mr. Black said he had “never tried to conceal” the work Mr. Epstein had done for him. Mr. Black and Apollo said Mr. Epstein did no work for the firm.
On Tuesday, an Apollo spokeswoman said that the investment firm’s board had retained the law firm Dechert to conduct an independent review of the dealings between Mr. Black and Mr. Epstein. Mr. Black has said he would cooperate with all legal inquiries.
The pension fund had initially been planning to meet with Apollo officials this week, but moved up the meeting after reading the Times report and Mr. Black’s letter, said Steve Esack, a spokesman for the retirement system.
“After that October 13th phone conversation, P.S.E.R.S.’s investment team informed Apollo that it will not consider any new investments at this time,” Mr. Esack said in an email. The retirement system “is closely following the ongoing legal issues and the newly launched internal Apollo investigation,” he said.
That means the fund’s existing investments with Apollo, worth $918 million, will remain intact and gradually decline as the projects they financed are completed and the money is returned to the teachers’ pension fund. Pension fund commitments to private equity vehicles typically last for a number of years.
Other public pension funds that work with Apollo have not gone so far as to freeze investments.
Rob Maxwell, a spokesman for the Texas teachers’ retirement system, said that fund had already been in touch with Apollo and was “closely monitoring the activities that the firm and its board are taking.”
Wayne Davis, a spokesman for the California Public Employees’ Retirement System, said the fund called Apollo last week about Mr. Black’s relationship with Mr. Epstein and would continue to monitor the situation. The system expects its outside investment managers “to follow the same core values of integrity and accountability that guide our own investment decision-making,” Mr. Davis said.
A spokesman for the Illinois teachers’ pension system, David Urbanek, said it was “going to monitor this situation very closely as it continues to unfold,” but the trustees responsible for selecting and monitoring outside investment managers had not yet discussed the matter.
A spokeswoman for Scott Stringer, the New York City comptroller who sits ex officio on the boards of pension funds serving teachers and other workers, said, “We are troubled by these reports, and we are closely monitoring the situation in accordance with our fiduciary duty and to protect the interests of our pensioners.”
Shares of Apollo were up 2.6 percent on Wednesday, but are still down more than 12 percent since Oct. 12.
Quibi, the beleaguered short-form content company started by Jeffrey Katzenberg and Meg Whitman, announced on Wednesday that it was shutting down just six months after the app became available, despite raising a combined $1.75 billion in cash from Hollywood studios, the Chinese e-commerce giant Alibaba and other investors. Ms. Whitman said that while the company had “enough capital to continue operating for a significant period of time, we made the difficult decision to wind down the business, return cash to our shareholders and say goodbye to our talented colleagues with grace.”
Tesla on Wednesday reported a profit for the fifth consecutive quarter, putting it on track to report its only annual profit since its founding in 2003. Tesla said it made $331 million, or 27 cents per share, in the three months that ended in September. The company delivered 139,600 cars in the third quarter. That was a roughly 50 percent increase from the second quarter, when sales and production were severely hampered by the coronavirus pandemic. It produced 145,000 vehicles, and had revenue of $8.7 billion.
Even as President Trump’s overall approval ratings have fallen during the pandemic, voters continue to give him comparatively high marks on the economy. That appears to be true even for people bearing the brunt of the pandemic-induced recession.
Over all, 47 percent of registered voters say they think Mr. Trump would do a better job on the economy than his Democratic opponent, former Vice President Joseph R. Biden Jr., according to a survey conducted this month for The New York Times by the online research firm SurveyMonkey. That’s a bit worse than the 49 percent who prefer Mr. Biden on that issue, but much narrower than the 14-point margin by which voters prefer Mr. Biden on the pandemic.
Voters who have lost their jobs during the pandemic rate Mr. Trump a bit worse on the economy, favoring Mr. Biden by 53 percent to 42 percent. (There is little difference in preference between those who have since returned to work and those who remain unemployed.) Voters who never lost their jobs, on the other hand, slightly prefer Mr. Trump on the economy.
But that gap is explained almost entirely by differences in gender, race and other factors. Women, young people and Black and Hispanic people were more likely to lose their jobs in the pandemic and are also more likely to prefer Mr. Biden on a wide range of issues, including the economy.
Job losses may have chipped away slightly at Mr. Trump’s support among one group: Republicans. Among Republicans who have lost their jobs and remain unemployed, 85 percent prefer Mr. Trump on the economy, compared with 96 percent of Republicans who have held on to their jobs throughout the pandemic.