Regional US airline Compass shutting down as coronavirus presents 'insurmountable obstacles'
- Compass flies smaller planes for American and Delta, which are slashing flights because of the coronavirus.
- Travel demand has plunged because of the virus, as leisure and business travelers cancel trips.
- Airlines are seeking more than $50 billion in government aid to weather the crisis.
Compass Airlines, a regional carrier that flies for American and Delta, said Thursday that it is shutting down as demand tumbles, as some of the first job losses among U.S. airlines emerge in the coronavirus crisis.
Airlines are scrambling to save cash and are making deep cuts to their network as they plead for more than $50 billion in government aid.
"This is devastating," said Sara Nelson, president of the Association of Flight Attendants, which represents some 50,000 cabin crew members, including more than 200 at Compass. "And if the government doesn't act fast we're going to see more casualties. That's why we're working so hard to get a relief package right away that puts workers first."
The shuttering of Minneapolis-based Compass comes days after its parent, Trans States Airlines, told employees that it would push up a planned closure of its eponymous airline to April 1 after its customer, United, cut its network to handle the drop in demand. The company still operates the regional airline GoJet.
Big airlines contract smaller regional carriers, some of which are wholly owned, for shorter flights. Many pilots get their start at regional airlines before working up to higher-paying jobs at mainline carriers.
Rick Leach, CEO of Trans States Airlines, told employees in a memo on Thursday, which was seen by CNBC, that the coronavirus presents "insurmountable obstacles": Its customers are cutting flights and backup opportunities have dried up. Compass remaining flying will be eliminated on April 7, a spokesperson for the airline said.
"It's difficult to articulate or even comprehend the speed at which the coronavirus has changed our industry and our world, and the impact it has had on our company," Leach wrote to employees. "The impact of this global crisis is real and unfortunately, no carrier, mainline or regional, is immune from its reach."
Leach added that "as difficult as this news is to process, we must conclude these last weeks of our operation with the same commitment to safety, quality and professionalism that have become synonymous with the Compass name. Take care of yourselves and each other in the weeks ahead."