Monthly Archives

Monthly Archives for June 2020.

What Will American Airlines Become When This Is All Over? CEO Says They’re Re-Building From Scratch

by Gary Leff

Jun 29 2020

A crisis is an opportunity to rethink the business. In normal times there are plenty of good reasons not to take chances, and too many entrenched interests standing in the way. Those are largely swept away. And the old arguments favoring the status quo hold little weight when the status quo is no longer an option.

Parker is right that the pandemic and rebuilding the airline’s routes and traffic from almost zero is an opportunity to re-think the business. Unfortunately he does not articulate here a creative new vision for how American Airlines might do that.

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When Restaurants Closed, Rats Needed Somewhere To Eat – The Paris Airport

by Gary Leff

Jun 29 2020

There are several surprising side effects of the coronavirus pandemic, that make a lot of sense once they’re pointed out. For instance one of the prime drivers in reduced GDP during the first quarter was drop in health care spending. How can that be with all the investment in treating COVID-19? Elective treatments were put off, nobody was going to the dentist either.

When restaurants closed down, rats had to go scurrying elsewhere in search of food….

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5 Reasons The Airlines Won’t Get The Second Bailout They’re Asking For

by Gary Leff

cash
Jun 28 2020

Airlines want another bailout. They’ve been laying the groundwork for two months. The major unions are asking for full payroll through March. The American Airlines pilots union, at least, is trying to frame the subsidies as pro-consumer calling it the government ‘buying all the middle seats’ although in many ways that’s an even worse idea.

There are two things the airlines have going for them, and five reasons a bailout just isn’t going to happen a second time.

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American Airlines Planning International Route Announcement

by Gary Leff

Jun 28 2020

American Airlines CEO Doug Parker shared with pilots last week that they’re planning an international route announcement in a couple of weeks. The flights they’ll be adding soon have already been shown to pilots, who had to bid on which trips to take. They’re also going to share plans for which flights they’ll run next summer – and which they won’t.

Senior Vice President Vasu Raja then went on to explain how they’re deciding which flights to add, and dropped two that look likely to start back up in August.

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Will American Airlines File Bankruptcy?

by Gary Leff

depressed businessman leaning his head below a bad stock market chart
Jun 28 2020

There’s no question American Airlines, and all of the major U.S. airlines, survive 2020. The federal government gave them over $50 billion. The question is what revenue looks like in 2021, and whether airlines can get closer to breaking even including debt service.

Once that happens though if American Airlines is carrying more debt, with greater debt service, they’ll financially underperform the industry. And then Chapter 11 bankruptcy starts looking attractive in order to get competitive costs. Financial markets appear to be predicting there’s a reasonable chance of it. Doug Parker says it’s not in the cards – and stands to lost out personally if they do given his 2.4 million shares in the company.

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Flying Just Isn’t a Big Coronavirus Risk

by Gary Leff

Jun 27 2020

We need to stop acting like it’s February or March, when we didn’t know much about spread of the virus. As the CDC says, “Most viruses and other germs do not spread easily on flights because of how air circulates and is filtered on airplanes.”

Your bigger risks are in the airport, and at security checkpoints, than in the air. For most of us, though, we don’t need to fear air travel.

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