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'The real question is how are we going to come back': CBS News Travel Editor on travel industry

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Airlines as well as the cruise industry have been hit hard due to the COVID-19 pandemic. CBS News Travel Editor Peter Greenberg joins Yahoo Finance’s On The Move to discuss the outlook for the travel industry.

Video Transcript

ADAM SHAPIRO: Welcome back to "Yahoo Finance." We're watching the Dow sell off more than 200 points. NASDAQ is up, barely up over about three points, and the S&P 500 off 15 points. United Airlines gave us a preview of what we can expect when Delta reports this week. Southwest reports this week. Then we'll get American, JetBlue next week actually. United lost $100 million a day just in the last two weeks. $100 million a day in March.

Peter Greenberg is the CBS News travel editor, and he's joining us now, because the airlines are really up against a wall here, Peter. It's going to be a disaster, the earnings reports. We know that. But can you and I, as consumers, expect to see travel resume at least within a year or two, to what we had before this crisis?

PETER GREENBERG: Not even close. The airlines can't discount their way out of this. The numbers are terrible not just now, but moving forward. And when you put into perspective, the idea that there's not going to be one green light or all clear signal saying, OK, you can all go back to the airport, it's not going to work that way. And the problem right now is, you've got airlines that have parked 95% of their planes. They've already said they're going to come back smaller.

And everybody's asking, when are we going to come back? The real question that you've got to ask, which is what you just asked, is, how are we going to come back? Delta Airlines, for example, has already announced that through the end of May and probably through the end of June, they're only going to board people into the aisle or window seats. There will be no center seats, at least not booked. They'll board from the back to the front, so that nobody walks by somebody who's already seated. OK, those are the new distance protocols.

But what does that do to their business model? If every middle seat going forward is going to be empty, well, Delta could probably adjust to that by raising airfares between $80 and $200 a ticket. But what does that do to the business model of airlines like Spirit and Frontier and Southwest that have predicated their entire business approach on filling every seat? So let's not think for a minute we're going to come back into a wave of discounts. Because first, we have to figure out where we're going, and actually, when we're going to get there.

JULIE HYMAN: And, Peter, also, even, it's Julie here, it's good to see you. Even as they come out with these rules and the different ways that we may be traveling, and this applies to not just airlines, but cruise ships and casinos and everything, every other way that we travel, even if they come up with these rules, the question is, will people still want to get on a plane? Even if you've got a seat in between you, because for all of us who are living through this, particularly those who live in dense areas, you have a psychological response now to being in a crowd. Even if there's a seat span in between you.

PETER GREENBERG: Well, if you go back to our behavior after 9/11, we didn't want to fly over a large body of water, because we were worried about terrorism. Today, we don't want to fly anywhere, because they're worried about either getting quarantined or not being able to get back, or just the actual atmosphere in which were flying. So what you're going to see more than likely, is when we do come back in staggering waves, it'll be domestic US travel drive-to destinations. Fuel prices are low. You're going to see RV sales go through the roof. You're going to see national parks get crowded, campgrounds get crowded.

Families traveling together as one unit in their quarantine mobile, otherwise known as an RV. So that they don't have to stop and go to a hotel or even go to a restaurant. But here's the real key. Let's go back to the old days. Some of us are old enough to remember when we used that to carry a yellow health card if we wanted to go overseas, to show that we were properly vaccinated against smallpox, yellow fever, et cetera. Get ready for the new rules.

What makes anybody think that when the doors finally open, France is going to let me come over? Spain is going to let me come over? They're going to want assurances and guarantees. The lawyers are going to a field day here in terms of liability, not to mention protecting their borders that I've been either properly tested negative or I did the antibody test, or in the absence of a vaccine down the road, that I've been properly vaccinated. So no one's going to be, I would probably guess even though I'd love to go to Paris in July, I may not get there till September and October when those new rules are in place.

ADAM SHAPIRO: Peter, I'm curious about what's going to happen to the businesses tied to airlines. We see the airlines going back to Treasury. United's going to ask for another $4.5 billion in loans on top of what they've already gotten, the $5 billion. But what about Hertz? What about National Rental Car? What's going to happen to those kinds of businesses?

PETER GREENBERG: Right. Well, what's happening to Hertz is, they have fleets of cars just parked in lots all around the country. So they're in big trouble. Because nobody's renting cars. Business travel, remember, it's corporate travel policy. People are still not being allowed to travel. Non-essential travel. Nobody's going to rent a car. Hertz could go into bankruptcy and probably recover in the short term, but what does this say to Avis and National and everybody else? Their business model is going to have to change.

JULIA LA ROCHE: Hi, Peter, it's Julia La Roche, great to see you again. It kind of sounds like you're kind of digging into a bit of the ripple effects here when it comes to travel. So breaking it down further, whether or not it's a corporate travel or even just the leisure, when we're talking about 22 million who in four weeks have applied for unemployment insurance, you're going to presume they're probably going to take a vacation until we're kind of back on track. What are the conversations that you're having right now across the travel tourism industry, and the worries that they might have just even further out?

PETER GREENBERG: Well, the real worry right now, and nobody's talking about it, is credit card debt and credit card payment default. Companies like Capital One, B of A, Chase, Citibank, they're looking at this in a different way. Because after all, it's one thing, you want to go somewhere, how are you going to pay for it? You also have credit card companies right now telling their members or their consumers that if they want to, they might defer three months of payment.

But anybody who jumps onto that bandwagon needs to know that then their card is frozen. They can't add any more new charges to it. And then what's going to happen when they come back out of it? Now the charge card guys, the American Express guys, they're looking at average spend going down almost 30% last month. And what happens when those people start defaulting? Because those charges are due in full. It's not revolving credit. So we've got a serious problem here coming out of this as to how people are going to spend their money, assuming they have any.

ADAM SHAPIRO: Peter, it sounds like an extravagant question in times like these, but the cruise industry, there was, I think last time we spoke to you, we talked about the fact that for 2021, bookings are already up. Is this realistic? What's going to happen to the cruise lines?

PETER GREENBERG: Whoever told you that is deluded. OK? Bookings are not up. That was a misunderstanding. They were looking at forward bookings of 2021 ahead of last year for a certain kind of cruise further out. Meeting bookings in June or July. But overall bookings are not up. They're down 20%.

ADAM SHAPIRO: And so you think the cruise lines get out of this? Or last question to you, we're going to see them fold?

PETER GREENBERG: Well, here's the thing. The bottom line is, the cruise lines have a huge hill to climb. This year they've written off, I'll give you one example, the Alaska cruise market, which is a huge one for them every summer, they're essentially canceling it because of Canada and a 1939 act that nobody remembers. It's called the Jones Act.

It was enacted to protect the US merchant marine. It killed the US merchant marine. And the rule was, no ship, unless it's registered in the US, could sail between two US ports without stopping in a foreign port first. Which is why cruises to Alaska usually start in Vancouver, so they can then go up to a US state, otherwise known as Alaska. Canada has banned cruise ships through July. That's it, season over.

ADAM SHAPIRO: Peter Greenberg from CBS, the "CBS News" travel editor. Good to have you here on "Yahoo Finance." All the best to you, Peter.

PETER GREENBERG: You got it, Adam.