OLYMPIC VALLEY, Calif. — A trickle of skiers recently zigzagged down the slopes at the Squaw Valley Ski Resort. Couples and families wandered through the resort’s village, which was decorated with golden Christmas lights and frosted with snow.It looked like the beginning of a merry season. But a closer inspection revealed it was anything but.Restaurant patios were nearly empty as masked workers swept through with lime green disinfectant sprayers strapped to their backs, part of the $1 million that Squaw Valley has spent on sanitizing equipment and other safety measures. At ski lifts, sparse groups waited in socially distant …
PARIS — Earlier this month, David-Alexander Leduc rolled his suitcase down a nearly empty platform at the Gare du Nord train station and scanned his ticket at the turnstile to board the sole Eurostar leaving that day for London.Mr. Leduc used to shuttle regularly for business on one of at least 17 high-speed Eurostar trains that ran back and forth daily, morning to night, through the underwater Channel Tunnel linking Britain and France.He was lucky there was a train to take.“It’s constraining,” said Mr. Leduc, who lives in London and has cut back hopping over to France to …
In the U.S., for instance, the federal government plans to give out personal record cards to people receiving coronavirus vaccinations to remind them of their medical provider, vaccine manufacturer, batch number and date of inoculation. But federal health agencies have not yet issued guidance on third-party digital vaccination credentials, leaving it open for companies and nonprofits to introduce Covid-19 health pass apps. Neither the Department of Health and Human Services nor the Centers for Disease Control and Prevention responded to requests for comment.Nonprofits and tech companies developing Covid-19 health pass apps say their aim is to create credentials …
“There’s various ways they could do it,” he said. “It’s not straightforward.”Even in the best of times, convention centers are loss leaders, said Mr. Sanders, the Texas professor. But the convention business has faced severe boom-bust cycles over the past two decades, with steep downturns after the terrorist attacks of 2001, the financial meltdown of 2008 and now the pandemic.On Tuesday, the organizer of BookExpo, the country’s largest publishing trade show, canceled the 2021 event and said it would rethink its format for the future, suggesting that it would include both “in-person and virtual offerings.” In recent years, …
After more than a decade working at Manchester Airport in the northwest of England, Tracey Moore finally got the job she wanted — at Virgin Atlantic’s passenger check-in desk. Then, at 3:30 p.m. on Oct. 22, after about a year on the job and months on furlough, she returned to the airport and handed in her uniform.
She had taken a buyout and left her dream job.
“I’ve fought hard to get onto Virgin and that’s why I think I’m more upset,” Ms. Moore said. Devastated by how the pandemic had hollowed out the air travel industry, Ms. Moore took the buyout because she figured her hours and her pay would be cut, if she wasn’t one of the people eventually laid off.
“I don’t think I had a real choice,” she said, adding, “I loved being in the uniform.”
But she didn’t work for Virgin Atlantic. She was one of the thousands of people let go at Swissport, an international company that provides ground handling services for airlines, including passenger check-in and loading and unloading baggage.
From check-in through takeoff and landing, travelers with Virgin Atlantic end up interacting with hundreds of other companies the airline has hired to provide the services and goods that make up a smooth flying experience. It is the same with most big airlines. Virgin doesn’t cook the in-flight food, or print the menus, or build the business-class seats, or de-ice the wings, or unload the baggage at the airport, or return your luggage when it gets lost; it hires companies to do these and many more tasks.
But eight months after governments closed their borders and imposed travel restrictions to stop the spread of the coronavirus, lockdown restrictions have only partially eased and a second wave of the pandemic has besieged Europe, stamping out tourism.
Virgin Atlantic, which relies heavily on long-haul routes and trans-Atlantic travel, has had almost no opportunity to recover. The airline has laid off 4,700 employees, nearly half of its staff.
The companies contracted by Virgin, with names like Gogo (a provider of in-flight internet), ESP Colour (printing services) and Eagles Couriers, have also been knocked down by the pandemic’s crushing blow on air travel, in some cases cutting staff and closing facilities.
Information about these companies rarely comes to light. But this summer, when Virgin feared it would run out of cash in the fall, it worked out an intricate $1.6 billion private rescue deal. It included about $226 million from a hedge fund; capital raised in share sales from Virgin Galactic, Richard Branson’s space venture; and agreements to defer debt payments.
As part of the plan, 162 companies around the world to whom Virgin owed about $69 million were essentially offered a choice: Get paid 20 percent less, with the balance paid in installments until September 2022, according to court documents, or risk Virgin Atlantic falling into bankruptcy, and perhaps getting little back. Most voted for the offer on the table, and so it applied to all of them.
The organizations, which include a charity, large hotel chains and consultancy firms, provides a map of the domino effect that economists have feared since the start of the pandemic: That the companies hurt most directly — aviation, hotels and restaurants — would kick start a wave of devastation that could extend widely into the economy.
Virgin Atlantic declined to comment, and referred to earlier statements. In September, when the refinancing deal was announced, the chief executive, Shai Weiss, called it a “major step forward in our fight for survival.”
“We greatly appreciate the support of our shareholders, creditors and new private investors,” he said in a statement at the time. “Together, we will ensure that the airline continues to provide vital connectivity and competition.”
These companies didn’t attribute their financial problems to Virgin Atlantic but rather the cumulative pain of the dramatic drop in air travel.
One of the companies is Swissport Ireland, part of an international group that serves airlines at 300 airports.
“Around 95 percent of our revenue disappeared in two weeks,” said Luzius Wirth, the executive vice president for Europe, the Middle East and Africa for Swissport International. The company had to stop spending quickly and furloughed as many staff members as possible, he said.
Swissport’s British operation was able to keep its staff employed through the country’s furlough program, which helped pay up to 80 percent of wages at companies hit by the pandemic. But that government subsidy was set to expire on Oct. 31, prompting Swissport to offer layoff packages. About 950 workers accepted them, including Tracey Moore. (In November, the government extended the furlough through March.)
“The problem is, we all know that the business will take years to recover; this is not going to be over in 12 months,” Mr. Wirth said. Swissport’s income is a direct reflection of the amount of air travel. Airlines don’t agree to any minimum level of spending with the company. The flexibility that the company offered to airlines suddenly became a curse — as flights vanished from schedules, so did Swissport’s income. Until demand for flights resumes, Swissport will be a much smaller company, Mr. Wirth said. It has already laid off about 3,250 employees in Britain, 40 percent of its work force.
Swissport’s competitors have also been forced to drastically reduce staff, including some workers who have spent decades behind the scenes at airports.
Leonardo Aquaro is one of the casualties. In 2003, at age 23, he started working in London’s Heathrow Airport at an airline check-in and ticket desk. Most recently Mr. Aquaro was an operations controller for Menzies Aviation, managing the dispatchers of flights who get planes turned around quickly at the airport. In March, he was furloughed, then in September, laid off. He doesn’t think he’ll ever return to the industry.
“There isn’t much out there at the moment, even if you have a lot of experience,” he said. And he says the industry has changed: Demands to cut costs have stretched staff and worsened contracts. Instead, he’s studying marketing and web design online and spending more time with his son, 7, and infant daughter.
Four year ago, Eagle Couriers, a corporate delivery service based in Scotland, decided to diversify into the business of returning lost luggage to passengers, known as baggage repatriation. It acquired THS Couriers, a creditor of Virgin Atlantic.
Eagle Couriers was slowly but surely integrating THS into its business before the pandemic, said Richard Beaton, the commercial director. Eagle Couriers is essentially paid for every bag it handles. With so few passengers, there are fewer opportunities for bags to get lost and for Eagle Couriers to step in. Over the summer, they were moving about 10 percent of the bags they would normally transport. As Britain’s furlough program was scheduled to end, the company laid off half of its baggage repatriation team.
“There’s no way we are getting back to previous volumes,” Mr. Beaton said. “If ever.”
For Safran Seats GB, a company based in Wales that designs and makes business and first-class seats for Virgin and other carriers as well as for Boeing and Airbus, the impact of the pandemic came in waves. In March, it was the airlines asking to defer plans to retrofit their cabins. Six weeks later, it was the aircraft manufacturers deferring plans for new aircraft.
The workers manufacturing the seats have been the most severely affected, said Victoria Foy, the chief executive. “The airlines who are clearly struggling for cash have said they cannot continue right now with those programs,” she added. By the end of the year, she expects the company to have about 900 employees, 700 fewer than at the start of 2020, and one of its facilities, in Camberley, southwest of London, has already been shut.
For the staff who design and develop new seats, the picture is less bleak. It takes several years to deliver a new design, and so Safran Seats can afford to wait out the pandemic in this area.
“We believe — firmly believe — that it will come back,” Ms. Foy said of air travel. “It’s a question of when, not if.” In the meantime, Safran is working with other companies to design airline interiors for a pandemic, with bigger partitions between passengers and hands-free reclining.
And then there are the organizations that Virgin Atlantic financially supports. In January, the airline signed a three-year deal to be the headline sponsor of Manchester Pride, an L.G.B.T.Q.+ charity that hosts an annual street festival to raise money for activities promoting greater inclusivity and empowerment.
As part of Virgin’s restructuring plan, Manchester Pride has accepted a reduced contribution from the airline on top of the revenue lost from having to move the festival online. This year’s revenue is likely to be less than a million pounds; typically, the charity takes in a little under £4 million, the charity’s chief executive, Mark Fletcher, said. A planned expansion of the team to 20 people has been put in reverse, and after several layoffs it now has a staff of 10.
Once its restructuring plan was worked out, Virgin Atlantic agreed to remain the festival’s sponsor for the next two years.
Manchester Pride’s previous headline sponsor was Thomas Cook, the British airline and package holiday operator, which collapsed last year and left 150,000 customers stranded abroad. “When I saw what happened with Thomas Cook airlines, I did take a closer look at the airline industry,” Mr. Fletcher said.
He said the charity did its due diligence and had worked with other successful airlines before, including British Airways and easyJet. Virgin Atlantic had been expanding in Manchester, and wanted to do something big.
“They were keen to be recognized as a key player in the region,” Mr. Fletcher said. For Manchester Pride, the promise of a minimum three-year commitment allowed organizers to consider growing the charity. “For us, this was incredible that Virgin was willing to bite the bullet and go big from the offset,” he said.
Of course, the charity’s due diligence did not foresee a pandemic. Few people did.
For Ms. Moore, who has lost a job she loved, her last day at Swissport came on Oct. 31. She would travel an hour and a half from a village in the Peak District National Park to reach Manchester Airport each day.
“There’s nothing quite like the feeling of an ungodly hour in the morning, you’re walking airside, you’re laughing with your friend and it’s dark and the sun is coming up and the lights are on in the planes on the tarmac,” she said. “You can’t explain it, if you’ve not felt it.”
At 59, Ms. Moore has just started a new job as an aide in a nursing home.
Confidence about the course of the coronavirus pandemic has helped put passengers back on planes in recent months, and Thanksgiving week is shaping up to be one of the busiest periods for U.S. air travel since it came to a near-standstill in the spring. News that effective vaccines may be close at hand lifted airline stocks.
But new concerns over the spread of the virus are rattling travelers and threatening airlines’ hopes for the months ahead.
United Airlines said Thursday that bookings had slowed and cancellations had risen in recent days because of the surge in virus cases. The Centers for Disease Control and Prevention urged Americans to avoid holiday travel altogether, presenting the industry with its latest wrenching question: How dark can this winter get?
“There’s two trains running toward us,” said John Grant, a senior analyst with OAG, an aviation data firm based near London. “One is full of optimism on a vaccine, and the other is, sadly, full of more caution. Who gets there first?”
When Angela Henry booked her Thanksgiving flights months ago, she had no idea that the United States would be setting new coronavirus infection records as the holiday approached. She also didn’t know that she would be pregnant.
Ms. Henry, 30, and her husband agonized over whether to stick to their plan to fly to Atlanta from Northern California to spend Thanksgiving with his family. After soliciting advice from loved ones and medical professionals and weighing the risks, they recently decided to go through with it.
“It’s been tough,” she said. “I was just trying to find that rational middle ground.”
Airlines argue that flying is generally safe because of the various policies put in place to limit contagion, high-end air filtration aboard planes and the relatively few published cases of coronavirus spread in flight. But the science is far from settled, travelers are still at risk throughout their journey and many would-be passengers have been discouraged by lockdowns and outbreaks in the places they hoped to visit.
Passenger volumes remain down more than 60 percent from last year, and the industry is losing tens of millions of dollars a day.
Airlines for America, a group representing the nation’s largest carriers, said it expected more people to fly around Thanksgiving than in the weeks before or after, though it estimated that the number of seats for sale will still be down about 40 percent compared to last year. American Airlines said it expected to operate about 15 percent more flights around the holiday than in the rest of the month. Delta Air Lines said it expects to fly about two million passengers over the holiday period, and United expects Thanksgiving week to be the busiest one since the pandemic began, crediting measures to guard against the virus’s spread that it says have put passengers at ease.
“They see that mask compliance is really good; they’ve seen how clean the planes are; they’ve maybe even seen the electrostatic sprayers in action; they’ve seen us board the plane back to front, they’ve seen social distancing on the jet bridge — all of that has contributed to greater confidence in air travel,” said Josh Earnest, United’s chief communications officer.
Thanksgiving may improve the airline industry’s fortunes, but prospects for passenger demand in the weeks ahead are dimming. Southwest Airlines said last week that booking momentum seemed to be slowing for the rest of the year. American Airlines, which has also seen demand dip because of the virus, has slashed December flights between the United States and Europe, leaving just two daily flights out of Dallas-Fort Worth International Airport, to London and Frankfurt.
To some extent, the unevenness of the travel recovery comes as little surprise, said Helane Becker, managing director and senior airline analyst at Cowen.
“We always knew that it would be choppy, but that said, we think that people want to travel and they’re looking for ways to get out,” Ms. Becker said during a Thursday panel at the Skift Aviation Forum.
In Europe, the mood is far bleaker, with hopes of a revival over the holiday season largely dashed by the resurgence of infections and the lockdown measures reintroduced this month to curb the spread of the virus.
Ski resorts in the United States remain hopeful for winter travel, but those in France, Austria and Italy are closed until at least the end of November. Thousands of Christmas markets — which attract millions of visitors each year with mulled wine, roasted chestnuts and handmade holiday gifts — have been canceled, and Santa Claus displays have been taken online.
“Looking at the landscape across Europe now, we do not have high expectations for the winter season,” said Eric Dresin, secretary general of the European Travel Agents’ and Tour Operators’ Association. “We are in a situation where we can’t plan anything, and naturally that is crippling for the industry.”
The European Union uses a traffic light system for determining travel restrictions, labeling countries and individual regions green, amber or red, based on the rate of new infections, test rates and incidence per 100,000 inhabitants in the previous 14 days. Most member states require travelers arriving from high-risk red areas to take a coronavirus test or quarantine themselves upon arrival. At the end of last week, all European countries were labeled red, except Norway and Finland.
Travel and airline associations across Europe are calling for coordinated testing and contact tracing protocols to replace blanket quarantine measures, arguing that they cause uncertainty and confusion among travelers and have a limited effect on the spread of the virus.
Elsbeth McGawley, a restaurant manager from London, had to rush back to Britain from France in August to avoid a two-week quarantine requirement that was announced just 24 hours before it went into effect. She had six days remaining on her hotel booking, but she had to cancel because she could not afford to take time off from work because of a quarantine.
“It was a nightmare, trying to get my ticket changed and make it back in time,” she said in a telephone interview. “I just wanted a small break, a change of scene after being cooped up at home for months, but it turned into an ordeal and it wasn’t worth the hassle.”
Ms. McGawley usually books her Christmas travel to European cities a year in advance, but this year she canceled her plans and has decided to stay in Britain to avoid any last-minute disappointment.
“It’s impossible to book even now, a month in advance,” she said. “There are restrictions everywhere, and even if one place opens up, there is no way of knowing if things will stay that way. It’s a big gamble and it’s not worth the risk, because there are no guarantees that you will get a refund if things go wrong.”
Travel operators across Europe said they had seen an increase in people searching for winter holiday destinations in recent weeks, but few of those inquiries have turned into bookings because of the uncertainty about travel restrictions. The lack of such strict restrictions has kept travel flowing in the United States, but for how long is anyone’s guess.
“It’s just such a difficult situation for everyone at the moment,” said Mr. Grant of OAG, the aviation data firm. “We are all sitting here waiting to see how the next couple of weeks shake out, not just from Thanksgiving, but also likely Covid infection rates.”
The Federal Aviation Administration on Wednesday cleared the way for Boeing’s 737 Max to resume flying, 20 months after it was grounded following two fatal crashes blamed on faulty software and a host of company and government failures.
The decision ends a devastating saga for Boeing, which had predicted billions of dollars in losses stemming from the Max crisis even before the coronavirus pandemic dealt a ruinous blow to global aviation. The agency’s chief, Stephen Dickson, signed an order Wednesday formally lifting the grounding.
“The path that led us to this point was long and grueling, but we said from the start that we would take the time necessary to get this right,” he said in a video message. “I am 100 percent comfortable with my family flying on it.”
The Max was grounded worldwide in March 2019 when the F.A.A. joined regulators in dozens of other countries in banning the plane after the crashes in Indonesia and Ethiopia killed all 346 people on board.
Investigators have attributed the crashes to a range of problems, including engineering flaws, mismanagement and a lack of federal oversight. At the root was software known as MCAS, which was designed to automatically push the plane’s nose down in certain situations and has been blamed for both crashes.
In August, the F.A.A. determined that a series of proposals by Boeing — including changes to MCAS, flight crew training and the jet’s design — “effectively mitigate” its safety concerns. Mr. Dickson, a former Delta Air Lines pilot, took the controls on a test flight in September, saying he liked what he saw.
In a news conference on Tuesday in anticipation of the F.A.A. announcement, relatives of victims on the second plane that crashed, Ethiopian Airlines Flight 302, questioned whether Boeing had done enough to address safety concerns with the plane.
“Aviation should not be a trial-and-error process; it should be about safety,” said Naoise Ryan, whose husband, Mick, was aboard that flight on March 10, 2019. “If safety is not prioritized, then these companies should not be in business.”
In a letter to employees, Boeing’s chief executive, David Calhoun, welcomed the lifting of the ban, promising to proceed deliberately with the plane’s return to service and to “never forget” the victims of the crashes.
“We will honor them by holding close the hard lessons learned from this chapter in our history to ensure accidents like these never happen again,” he said.
Now that the F.A.A. has lifted its grounding order, regulators around the world are expected to follow suit, though some may take their time in wrapping up their own in-depth reviews. The agency has worked with its counterparts in Canada, the European Union and Brazil on revised pilot training requirements for the Max.
Even in the United States, it could be months before the Max starts carrying passengers again. The F.A.A. must still approve pilot training procedures for each U.S. airline operating the Max, planes need to be updated, and airlines suffering from a huge decline in traffic during the pandemic may feel little urgency to act quickly.
On an investor call last month, the American Airlines chief executive, Doug Parker, predicted that the carrier would not resume Max flights before late December if the order came in November.
United Airlines said Wednesday that it expected to start flying the Max in the first quarter of next year after 1,000 hours of work on every plane and “meticulous technical analysis.” Southwest Airlines said it did not expect to resume flights until the second quarter.
The Air Line Pilots Association, which represents nearly 60,000 pilots in North America, including those at United and Delta, said in a statement that it was still reviewing changes to training procedures, but that the proposed engineering fixes “are sound and will be an effective component that leads to the safe return to service.”
The F.A.A. decision removes some uncertainty as Boeing seeks to rehabilitate its reputation, start fulfilling longstanding orders for the Max and manage the sharp slowdown in business caused by the pandemic.
The company has lost more than 1,000 orders this year, mostly for the Max, after accounting for orders that either were canceled or are likely to fall through. Aircraft contracts typically allow buyers to cancel or renegotiate terms if deliveries are delayed, adding to the urgency for Boeing to resume delivering the planes. Still, the company has more than 4,200 orders in its backlog, most of them for the Max.
The single-aisle plane is the latest in Boeing’s 737 line, an industry workhorse widely used by airlines around the world for short to intermediate distances. Southwest, for example, has more than 730 planes, all of them versions of the 737, including 34 Max jets. The airline has more on order, but its chief executive, Gary Kelly, said this week that Southwest was in no rush to expand its fleet.
For decades, Boeing had taken an incremental approach to the 737, choosing to update the plane rather than conceive a new model. That strategy had benefits, including reducing the need for costly pilot retraining. But it also resulted in a patchwork design that sometimes required workarounds. When larger, more efficient engines were added to the plane, they caused the Max to tilt up during certain maneuvers. MCAS — for maneuvering characteristics augmentation system — was programmed to counter that.
The Emotional Wreckage of a Deadly Boeing Crash
One year after a second 737 Max jet went down, the victims’ families press on in memory of their loved ones. “They were an extraordinary group of people.”
In both crashes, faulty sensors activated the software, sending the planes toward the ground as the pilots struggled to pull them back up. In a September report, Democrats on the House Transportation and Infrastructure Committee said internal Boeing documents showed that concerns raised by employees about MCAS had been dismissed or insufficiently addressed. That report and one from the Transportation Department’s inspector general accused Boeing of misleading the F.A.A. by playing down the complexity of MCAS, perhaps to avoid costly pilot training.
The House committee also faulted the agency’s practice of outsourcing some certification functions to employees of the companies it oversees.
On Tuesday, the House passed a bipartisan bill aimed at changing F.A.A. certification procedures and requiring an expert panel to review Boeing’s safety culture. The Air Line Pilots Association applauded the legislation, saying that it included much-needed changes to the certification process.
Boeing is nearing the end of a dreadful year. The pandemic has bruised its airline clients, leading to layoffs across the industry. Boeing expects to start 2021 with a global work force of about 130,000, nearly 19 percent fewer than it had at the start of this year. Also, quality concerns have slowed deliveries of its wide-body 787 Dreamliner.
Still, despite the twin crises of the Max grounding and the pandemic, there is hope. Orders for the Max may be difficult to cancel; some airlines, like Southwest, rely exclusively on Boeing planes, making it difficult to switch to the other major manufacturer, Airbus; and the Max offers savings on maintenance and fuel that may be difficult for some to pass up, especially as corporate clients pressure airlines to cut carbon footprints.
Boeing’s stock has risen more than 40 percent this month, with investors encouraged by news from Pfizer and Moderna that coronavirus vaccines under development appear to be highly effective.
The pandemic has turbocharged profits at some big businesses, like Amazon, which reported a 70 percent increase in earnings in the first nine months of the year. But it has devastated others, like Delta Air Lines, which lost $5.4 billion in just the third quarter.
Perhaps most surprising: Some companies that had feared for their lives in the spring, among them some rental car businesses, restaurant chains and financial firms, are now doing fine — or even excelling.
Wall Street analysts expect earnings to rebound to a record high next year. And, over all, 80 percent of companies in the S&P 500 stock index that have reported third-quarter earnings so far have exceeded analysts’ expectations, said Howard Silverblatt, senior index analyst for S&P Dow Jones Indices.
Typically, just shy of two-thirds of companies beat analysts’ quarterly forecasts. “It’s amazing,” Mr. Silverblatt said.
The strong are getting stronger.
As the pandemic forced people to stay home and do more things online, some successful companies were perfectly positioned to take advantage of the change. Now, these businesses are becoming even more dominant.
Consider Amazon. Its profits in the first nine months were up $5.8 billion from a year earlier. They allowed the company to spend 120 percent more during the period on things like warehouses, technology and other capital investments. That spending — $25.3 billion — could make it harder for all but Amazon’s biggest competitors to keep up with its growth.
Often in the past, companies that appeared strong during an expansion struggled in the next recession, delaying a full recovery. For example, banks grew with abandon before the 2008 financial crisis but later became a drag on the economy as they repaired their balance sheets.
Tech companies were strong before the pandemic downturn — and have powered through the rout, which could help the economy recover faster this time, said Jonathan Golub, chief U.S. equity strategist at Credit Suisse Securities. “It’s really quite breathtaking,” he said.
Some companies are doing better than expected.
When the pandemic hit, many executives understandably feared that their companies were facing an existential crisis or, at least, a very difficult recession. But a surprising number of such companies have excelled.
Mr. Cooper, a mortgage company, believed that it might face a financial squeeze in the spring when some homeowners were unable to make monthly payments. But a federal regulator provided relief to mortgage lenders, and then business was helped by a surge in refinancing. Mr. Cooper’s revenue in the first nine months of the year was up 40 percent, and its stock has climbed 341 percent from its low in April.
During recessions, consumers often decide to pull back and avoid large outlays. But this year, something different happened. Many Americans who did not lose jobs but were also not spending on travel and entertainment found themselves with more disposable income. The $1,200 stimulus payments from the government also helped.
This has been a boon for companies that initially feared a deep recession. General Motors and Ford Motor, for example, rushed to borrow billions of dollars early in the year, expecting that car sales would tumble and stay low for a while. The auto business did struggle and automakers had to close their factories for about two months, but sales started picking up this summer. For the third quarter, G.M., Ford and other automakers reported big profits.
Some large restaurant chains, after pressing for a federal bailout, have done much better than expected as drive-through customers, delivery and takeout orders bolstered sales. On Thursday, Papa John’s, whose stock is up 32 percent this year, reported surging sales, profits and cash flow and announced a new stock buyback program. Its chief executive, Rob Lynch, said the company had added “over eight million” customers this year.
Asked on a call with financial analysts Thursday if the company can hold on to such gains, Mr. Lynch said that many of the new customers were dining more frequently and that the average spending per order was larger than before the pandemic.
“So that gives us a lot of confidence that they have come in, they are enjoying their experience and they’re coming back,” Mr. Lynch said.
But there are winners and losers even within industries. Darden Restaurants, which owns Olive Garden and other brands that are more reliant on in-restaurant dining, reported a 28 percent decline in sales in the three months through the end of August. Its stock price is down 6 percent this year.
Darden is in a painful waiting game. For its results to recover, it needs big states to relax indoor dining restrictions.
“We need to get California back,” Gene Lee, Darden’s chief executive, said on a call with analysts. Olive Garden has 100 restaurants in the state, he said.
Businesses have adapted, successfully in some cases.
Even as much of the travel industry struggles, some companies have found a way to survive.
Hertz sought bankruptcy protection in May. And its biggest competitor, the Avis Budget Group, ran up large losses — $639 million in the first six months of the year. But Avis turned a modest $45 million profit in the third quarter.
The company’s comeback was made possible by cost cutting and a decision to sell 75,000 vehicles in the United States to take advantage of strong demand for used cars. (Nationally, spending on used light trucks, including sport utility vehicles, was up nearly 19 percent in the third quarter from a year earlier.)
Of course, that strategy might not keep working. Demand for rental cars is still low, and many Avis Budget locations are at airports, which are seeing precious little traffic. Other companies that have more urban and suburban locations, like Enterprise, are better positioned because they don’t depend as much on air travelers.
The outlook is dire for others.
Passenger airlines are among the biggest losers of the pandemic, and they have few options to improve their prospects. Delta, United Airlines and American Airlines worked quickly to cut costs and got $50 billion in the March federal stimulus package.
After suffering from a dizzying collapse in business in the spring, airlines pinned their hopes on the typically busy summer season, which brought some relief despite a surge in virus cases in July. But that did little to ease the pain. In the third quarter, American lost $2.4 billion and United lost $1.8 billion. For all three, revenue fell more than 70 percent from the same three months last year.
With coronavirus cases at record highs and domestic air travel still down 60 percent from last year, there’s little hope that the typically slower winter season will bring a meaningful rebound. The industry is hoping Congress will authorize another round of aid to help it pay thousands of workers.
But investors are not all that worried.
Investors, who are more likely to buy stocks if they believe companies will make more money, are signaling that they expect a broad profits recovery among the largest U.S. companies. The S&P 500 has soared nearly 57 percent from its March low and is up 8.6 percent for the year.
Those gains might seem odd given that the combined profits of the companies in that index are on track to decline 25 percent this year from a record showing in 2019. But a big chunk of that rally can be attributed to a handful of large technology stocks. Investors are also counting on the Federal Reserve to keep its benchmark interest rate low for years to come and to keep pumping money into the financial system.
Of course, many struggling businesses, including lots of restaurants, stores and services companies are not traded on the stock market. That means a surge in stock prices can give a misleadingly optimistic view of where the economy is headed.
“The economy is not as good as the market is,” said Mr. Golub of Credit Suisse.
For a certain kind of worker, the pandemic presented a rupture in the space-time-career continuum. Many Americans were stuck, tied down by children or lost income or obligations to take care of the sick. But for those who were unencumbered, with steady jobs that were doable from anywhere, it was a moment to grab destiny and bend employment to their favor.
Their logic was as enviable as it was unattainable for everyone else: If you’re going to work from home indefinitely, why not make a new home in an exotic place? This tiny cohort gathered their MacBooks, passports and N95 masks and became digital nomads.
They Instagrammed their workdays from empty beach resorts in Bali and took Zoom meetings from tricked-out camper vans. They made balcony offices at cheap Tulum Airbnbs and booked state park campsites with Wi-Fi. They were the kind of people who actually applied to those remote worker visa programs heavily advertised by Caribbean countries. And occasionally they were deflated.
David Malka, an entrepreneur in Los Angeles, had heard from friends who were living their best work-abroad lives. In June, he created a plan: He and his girlfriend would work from Amsterdam, with a quick stop at a discounted resort in Mexico along the way.
The first snag happened almost immediately. In Cabo San Lucas, Mr. Malka and his girlfriend realized that the European Union wasn’t about to reopen its borders to American travelers, as they had hoped. Returning to the United States wasn’t an option: Mr. Malka’s girlfriend was from the United Kingdom, and her visa wouldn’t allow it.
The two decided to stay in Mexico a bit longer. At first it was glamorous, Mr. Malka said. Working by laptop — he manages a portfolio of vacation rental properties — they had the resort to themselves. But by the second week, their situation began to feel like “Groundhog Day.” The city and the beach were closed, so the couple never left the resort. Meanwhile, the travel shutdown was hammering his business.
“All we could do is sit by the pool or go to the gym,” Mr. Malka said. The repetition, boredom and isolation all wore on them.
Eventually, the couple took a 28-hour, two-layover trip to Amsterdam, where Mr. Malka was indeed turned away at customs. They retreated to London, where they promptly broke up.
He has been there since. “Cold, raining, depressing,” he said. “Those are the first three adjectives that come to mind.”
Now Mr. Malka is trying to figure out how to get to Bali — it’s technically closed to visitors, but he heard about a special visa that can be rushed for $800 — or use his ancestry to obtain Portuguese citizenship. It’s a lot of logistics.
“I have PTSD planning my next month,” he said.
Mr. Malka is far from the only Covid nomad to stumble on the road. It turns out there are drawbacks the trend stories and Instagram posts didn’t share. Tax things. Red-tape things. Wi-Fi rage things. Closed border things. The kinds of things one might gloss over when making an emotional, quarantine-addled decision to pack up an apartment and book a one-way ticket to Panama or Montreal or Kathmandu.
The worst of both worlds
Americans have never been especially good at vacation. Before Covid-19, they were leaving unused hundreds of millions of paid days off. They even created a work-vacation hybrid — the workation. The idea: Travel to a nice place, work during the day and then, in theory, enjoy the scenery in the off hours. In pandemic times, the digital nomads have simply made workation a permanent state.
The bad news is it’s the worst of both worlds. They should be enjoying themselves in their new, beautiful surroundings. But they can’t enjoy themselves, because work beckons. The anxious self-optimization pingpongs between “Why aren’t I living my best life?” and “Why aren’t I killing it at work?”
Katie Smith-Adair and her husband run PlaceInvaders, an event company in Los Alamos, Calif. When the pandemic halted business, they packed up their Volvo with a tent and an outdoor shower for a monthlong camping road trip around the West. All the while, she worked 40 hours a week trying to set up PlaceInvaders for virtual events.
The first lesson learned? Never trust campground Wi-Fi. The second? Expect judgment from campground workers for needing the Wi-Fi.
“They make you feel bad because you’re not unplugging and getting into nature,” Ms. Smith-Adair said. “This is my job. I want to unplug, but I also have to get on that Zoom call real quick.” At an R.V. park near Boise, Idaho, she noticed a Wi-Fi hot spot whose name was the equivalent of a middle finger directed at all Californians.
Ms. Smith-Adair’s office became a folding chair on the sidewalk outside whatever McDonald’s or Starbucks was nearby. It wasn’t exactly a peaceful commune with the redwoods. During one curbside conference call in Eugene, Ore., a nearby man with a weed whacker began roaring his motor. Ms. Adair-Smith told him that she was trying to salvage her career. He didn’t care.
When digital nomads do manage to indulge in the splendors of their new homes, they can experience another, more psychic toll: the haters. Austin Mao, a short-term-rental operator in Las Vegas, posted on Facebook about escaping to Costa Rica with his wife in March, and was surprised to receive a flood of angry comments. People accused of him spreading Covid. They were outraged that he had abandoned his country. One person even unfriended him.
After the haters, Mr. Mao said, came the guilt. During the pandemic, he and some friends have kept in touch via monthly Zoom calls. The conversations have a structure: The friends take turns describing what’s going well and not so well in their lives, which they refer to as their “top 5 percent” and “bottom 5 percent.” In Costa Rica, Mr. Mao would share tales of eating fish he had caught himself and diving with whales and sharks. He was living in a beachfront jungle villa where monkeys would knock coconuts from the trees, and he would chop them open with a machete, savoring the fresh juice.
His friends, who were quarantining in the United States, had no such wealth of material. Their stories rarely changed. “They would frequently say, ‘I don’t have a top 5 or bottom 5. My life is kind of blasé,’” Mr. Mao said. “It felt like I was cheating.”
After six months, Mr. Mao and his wife, Chuchu Wang, needed to return to the United States for her to keep her green card. He noticed a change: The Facebook friends who had taken out their coronavirus-rage on him came around. Now, Mr. Mao said, they’re asking him how they can pull off a similar escape.
‘The intermittent fasting of taxes’
Perhaps the worst potential outcome not advertised by those who’ve escaped: You and your employer could end up in tax audit hell.
Lots of American travelers try to use a tax rule that carves out exemptions for Americans living abroad. But it requires being out of the country 330 full days of the year, not counting travel. Messing it up brings severe penalties.
“It’s the intermittent fasting of taxes,” said Alexander Stylianoudis, the general counsel at WiFi Tribe, a group that helps facilitate travel for 900 digital nomads. “Everyone talks about it, and everyone does it wrong.” The number of mistakes he has seen since the pandemic has multiplied, Mr. Stylianoudis said.
Some workers have avoided that by simply forgetting to mention their location to their employers — the “don’t ask, don’t tell” of remote pandemic work. Others have been honest and lived to regret it. One employee of a publicly traded tech company, went to Canada when her office closed in March. In September, two weeks after a promotion, the company suddenly told her that she had to return to the United States within two weeks or resign. The reason, she was informed, was to avoid paying foreign taxes. (She asked that her name be withheld because the situation is unresolved.)
Other employers are trying to decide where to draw the line. Leigh Drogen, the chief executive of Estimize, a fintech start-up, said he had discouraged an employee’s request to bounce around from country to country for a full year, but had given permission for the worker to go to Spain for six months. Estimize’s oversight of its staff is already “thin,” Mr. Drogen said, and he worried about the employee’s ability to focus while moving around.
“You work best when you’re in one place,” he said.
There are also visa issues. In years past, digital nomads would cross and recross borders as needed to avoid overstaying. That’s not so easy in a closed-border pandemic.
In March, Ryan McCumber, a business consultant, was stuck in Portugal. He had been traveling in Europe, and a comedy of errors and the sudden continentwide lockdown stranded him in a beach town, Algarve, with just four days of clothes while his dog and the rest of his luggage remained in Warsaw, a previous stop.
The pandemic made his conference business nonviable, so while in Portugal he decided to create a start-up accelerator focused on sports technology. The biggest challenge, Mr. McCumber said, was not making his partners in the United States too jealous while he took calls from the beach.
Although a mugger assaulted him, giving him 15 stitches and a scar above his eye, he fell in love with Portugal’s cheap sangrias and ocean air, and in early summer, when his airline finally offered him a flight home, he didn’t want to leave. With his visa already expired, Mr. McCumber went to the immigration bureau and asked for political asylum.
“I said, ‘Trump’s a dictator, my city is burning, and people are dying,’” he said, citing the president, protests against police violence and the virus. “They made a joke that I was the first person since the Vietnam War from America to ask for that.”
The government workers laughed, he said, and then approved an extension through the end of October. (Mr. McCumber has since returned to the United States.)
Others are struggling with the same vacation fatigue experienced by Mr. Malka, the Cabo-to-London-to-maybe-Bali wanderer. According to research conducted at Radboud University in the Netherlands, it takes eight days of vacation for people to reach peak happiness. It’s downhill from there.
When the pandemic hit, Mr. Stylianoudis, the lawyer, was on the island of Koh Phangan in Thailand. At first, he couldn’t complain about the tropical locale. Each day, after work, he swam in crystal-clear water. But after five months, he was itching to get out. He had become a regular at the island’s 7-Eleven. He even grew tired of the beach — something he hadn’t thought was possible.
The feeling of being trapped in paradise was hard to explain. “I started to feel like I was in a sequel of ‘Lost,’” he said.
‘I just want to go back home’
This summer, Katie Jacobs Stanton, a venture capital investor living in Los Altos, Calif., saw her moment for a fresh start. She was about to become an empty nester, with two children in college and another taking a gap year. Her father had died of Covid, and being alone at home, especially amid California’s wildfires, was too depressing. Figuring she could find venture investments and strike deals from anywhere, she decided to take a gap year of her own.
In August, Ms. Jacobs Stanton gave away most of her possessions, bought a Tesla and prepared to hit the open road with Taco, her golden retriever. “I had this image of a glorious, beautiful American landscape and mom-and-pop, Main Street U.S.A.,” she said.
She found a different reality. First, someone stole her Tesla. (The police recovered it.) Then her first stop, Reno, was grim. “It’s a very sad city,” she said. In Tahoe, wildfires raged. In Bozeman, Mont., Taco became sick. A trip to a veterinarian led to emergency surgery; Taco had eaten a tube sock.
Then came Kanye West. In September, Ms. Jacobs Stanton had a phone call with the hip-hop artist about a possible venture in the music business, which he mentioned on Twitter. Name-checking her set off “one of the most bananas days in my life,” she said. Ms. Jacobs Stanton was overwhelmed with messages, but on the plus side, the episode prompted all three of her children to call and check in.
She froze while camping in snowy Yellowstone and stressed over the icy roads. Then her daughter in college got the coronavirus, and Taco needed more surgery. (Both recovered.) On top of it all, people in small towns she visited didn’t wear masks and were hostile about it.
By late October, she was ready to call her gap year short. “I think I just want to go back home,” she said. “No more road trips for Katie Stanton.”
Let’s poolstorm some ideas
More formal workation getaways are bubbling up, particularly in the tech industry, which spawned tools like Zoom and Slack and has been the fastest to let employees relocate in the pandemic.
Over the summer, Michael Houck, a former product manager at Airbnb and Uber in San Francisco, invited a group of 18 entrepreneurs to work out of a rented Mexican mansion in Tulum. He called it Launch House. For a month, he and the crew posted photos of themselves scuba diving, sharing meals and using their laptops at the beach.
When a second group of entrepreneurs arrived in late October, Mr. Houck upgraded to a house with faster Wi-Fi, along with a private chef, a housekeeper and whiteboards in the pool for “poolstorms” — brainstorming sessions in the water.
The goal, Mr. Houck said, was to help founders release new apps and software. “We’re not going out and partying in Tulum or going to the clubs,” he said. “We work from the beach, work from the house.”
They couldn’t work from anywhere when a tropical storm and a hurricane cut the power. “Realistically, in places like Tulum, there’s always a chance the Wi-Fi will go out,” Mr. Houck said. “That’s a trade-off you make.”
The much riskier trade-off, of course, is the pandemic. Three people in the first group, who Mr. Houck said had violated house rules and spent time with outsiders, got the virus. The second batch of entrepreneurs was told they would be evicted if they threatened the group’s safety.
It is a reminder of the steep risks taken by the Covid Carpe Diem set. The reason this once-a-generation moment exists is the same reason most of us can’t go into the office or take a real vacation or eat inside a restaurant. Traveling risks sickness. Seizing the day risks sickness.
In October, Brett Martin, a venture capital investor, had a heart-to-heart Zoom call with four friends — a Bitcoin trader, a writer, an entrepreneur and an architect. Until then, the group had been making plans to move to what they described as a “time-share commune” in Costa Rica from November to March.
The rules had been set: They would buy health insurance through Costa Rica’s government. They would go on a “visa run” to Nicaragua halfway through to stamp their passports. No indoor dining. No work or conference calls from the main living area. Groceries would be delivered. Visitors would be allowed by group consent only.
But one issue remained. “Getting really sick far away from home in a place where you don’t speak the language and being alone and helpless — that’s everyone’s fear,” Mr. Martin said.
On the Zoom call, they decided: No man left behind. “If someone gets sick, this is like a family,” Mr. Martin said. (Just in case, he’s done two months of Duolingo.)
He acknowledged that the setup could easily turn sour. Members of the group will have to adjust to having roommates again. The internet could go out. The price of Bitcoin could tank. He had to perfectly time a coronavirus test to get results 72 hours before flying. But after seven months of quarantine, he said, it was worth the risk.
“The prospect of waking up at 6 in my studio apartment in New York, exercising, sitting down at my laptop for 10 to 12 hours, closing it, staring at the wall, then opening it again to watch Netflix for the rest of the night——” he trailed off. “It sounded literally dangerous to my health.”
He got to Costa Rica in early November. It has poured rain every day. “Spirits,” he said, “are still high.”
The luxury cabin in Incline Village, Nev., just north of Lake Tahoe, has a hot tub, sauna, pool table, fire pit, two patios and a backyard full of towering pine trees. It sleeps 14, according to its listing on Airbnb. And it has been a nightmare for Sara Schmitz, a retiree who lives next door.
The home is frequently the site of raucous bachelor parties and weddings, Ms. Schmitz said. Recently, a crew of college students stayed there, blowing weed smoke into her house. When she asked them to stop, they threw trash in her yard.
“It’s a constant party house,” said Ms. Schmitz, 57. She has called the police a dozen times about the property and joined the Incline Village STR Advisory Group, an organization that fights short-term rentals — for which the largest source is Airbnb.
What Ms. Schmitz encountered is part of the “party house problem” facing Airbnb. That’s when guests who book its properties hold parties in them, something that appears to be happening more frequently in the coronavirus pandemic, as people look for places to socialize with bars closed and hotels appearing risky. In July, New Jersey police broke up a party at an Airbnb with more than 700 people in attendance.
The party houses pose a risk to Airbnb’s reputation and business as the $18 billion company prepares to go public this year. In many neighborhoods, people have been turned off by the rentals’ noise and annoyances. Complaints about party houses across sites like Airbnb and Vrbo soared 250 percent between July and September compared to last year, according to Host Compliance, which provides local neighborhood hotlines across the United States and Canada.
Worse, the party houses raise safety issues. Between March and October, at least 27 shootings were connected to Airbnb rentals in the United States and Canada, according to a tally of local news reports by Jessica Black, an activist fighting short-term rentals. The tally was verified by The New York Times.
Over the years, Airbnb employees have pushed executives to do more to address the party houses, said six people who worked on safety issues at the company. But they said the start-up largely prioritized growth until a deadly shooting last Halloween at an Airbnb made national headlines. Five people died.
The issues are now fueling Airbnb’s many fights with communities over how to regulate home rentals. Groups like the one in Incline Village are becoming more vocal and are sharing their strategies for fighting short-term rentals. Cities including Chicago, San Diego, Ann Arbor and Atlanta have recently proposed or enacted stricter rules or bans on the properties.
“Airbnb’s long-run viability and profitability is going to have a big question mark” if the party issue is not resolved, said Karen Xie, a professor at the University of Denver who researches the short-term rental industry.
Christopher Nulty, an Airbnb spokesman, said the company is combating the party houses with “robust new policies, products and technologies to stop large gatherings, which far exceeds measures taken by others.” He said Airbnb has made changes even though the moves “knowingly impacted growth and nights booked.”
Airbnb began rolling out new rules against party houses around the same time that it was preparing to file to go public. In July, it said guests under the age of 25 with less than three positive reviews on the site could not book entire homes near where they live. In August, the same month it filed for a public listing, it placed a 16-person cap on reservations, banned parties and sued guests who were responsible for the events.
Last month, it started testing technology to block suspicious last-minute bookings and suspended some party houses from its listings. And ahead of Halloween — the one-year anniversary of the shooting at the Airbnb in Orinda, Calif. — it banned one-night rentals on Halloween.
Some said the measures were too little, too late.
“The damage has really been done to the neighborhoods during that time,” said Austin Mao, an Airbnb host in Las Vegas. He said the costs of repairing damages from parties at his properties, which host as many as 2,000 guests a month, have been tremendous. Neighbors complained so much about parties over the summer that he converted a third of the listings to long-term rentals.
In 2016, Christopher Thorpe, an entrepreneur in Lincoln, Mass., said he faced $28,000 in damages after an Airbnb guest threw an 80-person rave, complete with ticket sales, at his home. Mr. Thorpe later learned that other hosts had reported that guest for parties, but Airbnb had not removed the renter from the platform.
“Airbnb put up as many roadblocks as they could to avoid dealing with this,” Mr. Thorpe said.
Airbnb has long grappled with safety issues, said the six former employees who worked on trust and safety and who asked to remain anonymous.
Two of them said they asked Airbnb to sue people who frequently threw parties at the rentals for the damages, but executives feared that would draw attention to the events. Several also said they pushed to limit or remove the “Instant Book” option, which confirms bookings immediately without requiring approval from the host. But the feature, which was used by almost 70 percent of listings in 2019, boosted convenience and made Airbnb more competitive with hotels. So Airbnb did nothing, they said.
Mr. Nulty said Airbnb promoted Instant Book so hosts could not discriminate against guests by denying some of them a booking, adding that hosts can turn off the feature. He denied that executives had been urged to sue party promoters and said its legal team did not reject proposals because of concerns over public attention.
In Incline Village, which has a population of around 9,000, the Airbnb party houses have increasingly grated on residents. Shortly after Joe and Edie Farrell, retired physical therapists, moved permanently into their vacation home there last year, the house next door became an Airbnb. Blasting music and drunk people created “10 days of anxiety” around July 4, said Ms. Farrell, 70.
“Airbnb is basically helping people set up a hotel in our neighborhood,” Mr. Farrell, 68, said. “Now you have to worry about your safety and peace and quiet.”
Then came last year’s fatal shooting at the Airbnb in Orinda. A Vice news article that outlined Airbnb’s fraudulent listings and fake host accounts also went viral, raising questions about trust.
In response, Airbnb said it would ban parties thrown by professional organizers that were promoted on social media. It also said it would verify that all seven million of its listings were as advertised by Dec. 15, 2020, and announced a global hotline for neighbors to report parties. And it promoted its head of policy, Margaret Richardson, to be vice president of trust. (She has since left.)
But when the pandemic hit in March, executives scrambled to keep the company afloat. Verification stalled. (Airbnb said 40 percent of listings have “begun the verification process.”) The neighborhood hotline, which was supposed to be available globally, is only accessible in the United States, Canada and the Netherlands.
In May, Airbnb cut a quarter of its staff, including a large chunk of its safety team. In an internal Q. and A. with Brian Chesky, Airbnb’s chief executive, employees protested the layoffs. One said the decision would leave guests without support for weeks, according to a list of the questions viewed by The Times. Another wrote that he would feel unsafe staying in an Airbnb or renting his home on the site because of the lack of a safety plan.
In the first week after the layoffs, safety cases piled up, said former employees. Airbnb asked many of those it had laid off to return temporarily to work through the cases; many of those workers have since remained, said current and former employees. In Dublin, the layoff plans were rescinded altogether, they said. Airbnb said the team that manages user safety is now the size it was before layoffs.
In August, Airbnb introduced more changes to improve safety. It sued a guest who held a party in Sacramento that resulted in three people getting shot. It then sued another guest who hosted a party in Cincinnati, where a property manager was shot in the back while trying to break up the event.
On Oct. 19, the company sued Davante Bell, a party promoter in Los Angeles who threw parties at Airbnb mansions. “Airbnb has suffered and continues to suffer reputational harm and potential liability to third parties as a direct result of Bell’s actions,” the company’s lawsuit said.
Mr. Bell, who declined to comment on Airbnb’s suit, has been selling tickets to a new party called “Nightmare on King Bell Street Halloween Mansion Party” on social media. This week, he continued posting fliers for the event. When asked if the party would be held at an Airbnb, Mr. Bell did not answer.