Coronavirus Economic Fallout: Layoffs Mount As Shutdowns Impact Travel Businesses

The bad news for the global economy continues to roll in as businesses worldwide buckle under the pressure of COVID-19. While some grocery chains and e-commerce companies are bolstering their workforce to meet increased demand, many continue to cut staff as the ongoing pandemic brings consumer activity to a standstill.

Since travel has been one of the major avenues through which the novel coronavirus has spread from country to country, the airline industry has been particularly impacted. Air Canada has announced layoffs of roughly 5,000 employees. This includes around 3,600 workers from its main airlines, as well as 1,549 from Rouge, a budget subsidiary owned by Air Canada. These employees are expected to be reinstated once full operations resume.

Another Canadian airline company, Transat AT Inc., also recently laid off 3,600 workers.

Elsewhere, South Korean company Eastar Jet has suspended all flights, while a number of smaller outfits in the country have moved to domestic flights only.

On Saturday, 10 major airlines companies wrote to Congress requesting a $29 billion that would help them pay employees through the summer.

As travel takes a hit, so too has the hospitality sector in turn. The Pebblebrook Hotel Trust recently laid off over 4,000 of its employees in major cities like New York, San Francisco, and Seattle. Marriot, the largest hotel company in the world, has also laid off “tens of thousands” of hotel staff members, as well as two-thirds of its corporate staff. A hotel trade group recently asked the government for $150 billion to help during this turbulent time.

“We’re witnessing the shutdown of travel,” said Roger Dow, chief of the U.S. Travel Association. “The economic effects of that are already disastrous, but could become worse and permanent unless the government acts now.”