American Airlines Denies They’re Preparing To Announce 2-3 Week Total Shutdown

The usually very reliable JonNYC, who has a lot of inside sources at major airlines but especially at American Airlines, relays a rumor that American will make an announcement at the end of the weekend of a complete shutdown for a period of 2-3 weeks. I am skeptical of this.

To be sure there is very little demand for air travel right now, with load factors in the 20s or 30s, and American is likely losing money paying for crew and fuel (even at current low oil prices). There have also been discussions of a nationwide airline shutdown ordered by the government over the past few weeks.

A national airline shutdown has been heavily resisted, although selective travel bans would not surprise me going forward. For instance, I could see a ban on travel in and out of the areas most affected by coronavirus. That makes the greatest sense to protect those parts of the country where infections are still very limited. Or once the virus peaks and declines in one area, the government might seek to prevent a second wave by preventing travel to that area.

United Airlines is threatening mass layoffs at the end of the month unless there is a government bailout. That seems a much more effective strategy than actually grounding the airline while likely days away from a decision on a bailout. I don’t think doing so helps their case that they are viable if only the government gives them money.

Airlines For America today released a letter under the signatures of 10 airline CEOs to Senate and House leadership today indicating that “payroll protection grants.. equaling at least $29 billion” for “750,000 airline professionals” would prevent layoffs through August 31, 2020. (Incidentally, assuming a 60% reduction in operations as initially suggested by United is equivalent to 60% layoffs, that amounts to nearly $12,000 per employee per month.)

American Airlines can’t really front-run their bailout requests with layoffs now. And since it’s in American’s interest not to shut down completely pending a government bailout, I’ve assumed the rumors JonNYC is reporting on are false.

I reached out to American Airlines for comment. I didn’t think that if the rumors were true they would confirm it – but assumed in that case they’d ignore my request. Instead I received a swift reply: ‘We are not contemplating that at this time.”

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. If the trajectory of the virus continues unabated for another week it’s inevitable that there will be a mass shutdown of air travel worldwide.

  2. It’s cowardly and small minded. Yes everyone sees air transport as the vector for transmission, but it is also the most important infrastructure tool.

    Cargo, medicine, medical supplies, medical professionals, materials, food- all needs to move faster and in greater volumes than ever before.

    Airlines should be asking themselves the same question every tech company and factory is hopefully asking- if this were a war, what would be our wartime stance as a company. How would we step up- instead of step down?

    I very much doubt parking airplanes would be the answer. Ask your brave pilots, flight attendants, and ground staff if they are willing to help- you might be surprised by the answer.

    I hope once the dust settles that the whole lot of spineless leadership in today’s corporate boards gets sacked. Shame on them….

  3. FWIW, I called today to ask about a refund for a nonrefundable domestic flight. EXP agent said can’t refund unless flight is cancelled, and suggested I wait nothing they would be loading more schedule changes this weekend.

  4. @ Omar — Actually, unless we get a lot of new cases announced this evening, today’s data doesn’t show a growth in coronavirus cases in the USA — especially given the massive ramp up in testing that is now occurring, which should have discovered many more cases. Obviously, it is way too early to declare victory but, at the moment, there is a serious public health situation in the New York City area, and mostly fear of one elsewhere in the country. I am certain that more Americans will die of influenza today than COVID-19.

  5. So… I might actually agree with chopsticks for a change.

    I’ve got upcoming travel to Malaysia (end of May) that I’m thinking very carefully about. A place I’m planning on going is providing daily updates from the Malaysian government regarding COVID-19 cases. As of 3/19, Malaysia has reported 1100 confirmed cases and 3 deaths.

    What does this say about my upcoming plans? Who knows at this point. But does this data suggest we should all be freaking out over this thing? Absolutely not.

  6. RE: “I reached out to American Airlines for comment. I didn’t think that if the rumors were true they would confirm it – but assumed in that case they’d ignore my request. Instead I received a swift reply: ‘We are not contemplating that at this time.’”

    Ah, yes, “at this time” – the legal department’s favorite 3 (wishy washy) words giving the airline legal wiggle room equivalent to the width of their (bloody awful) 10 abreast densified 777s to change their mind in the blink of an eye!

    Or more simply put:

    “subject to change without notice.”

    – or –

    “this statement is only accurate until it’s not.”

    Take your pick!

  7. How many famous people have died from the virus? There are several politicians, actors (including Tom Hanks), professional athletes and coaches who contracted the virus – but many of them are not showing severe symptoms and don’t seem to be in serious condition. Most regular people also seem to survive as well.

    Sure, every death is tragic for the family of the person, but there are many other illnesses which cause death on a large scale.

    Closing down airtravel will increase panic, but it may be a rational business decision for airlines

  8. Actually we were talking today in CLT that maybe we should shut down a few weeks. Got to stop the bleeding. It’s bad. Can’t keep spending big bucks flying empty planes. Its self suicide if you do. I’d rather suck it up and have a job to come back to!

  9. Annual US airlines payroll is around $65B, so $29B grant represents over 5 months of total payroll costs. In return, the airlines are offering to guarantee employment through August? I haven’t seen as egregious a heist since the National Lampoon cover, “Buy this Magazine or We Will Shoot This Dog”!

    Definitely time to let these airlines fail- hopefully their replacements will do a better job. I cannot see how they would be worse

  10. Flights from Japan went to only 3x a week from NRT to DFW on AA. I had April booked from HND. Route scrapped. Called to change my ticket once and the agents weren’t yet updated on flights. Friendly and changed it to NRT instead of HND. Saw new ban until April 20 re border crossing to Canada and called last night to change post 4/20. What was on AA site and what agents knew differs. Like the agent said. Things change every 5 minutes. So, I kept my mid April flight as all others are only half full but they are not selling tix. A lot of confusion. AA agents have been great to work with.

  11. @Mattej

    I’m trying to get back from that part of the world in early June (presumably I leave the US before Memorial Day.)

    “Route scrapped” isn’t quite the right characterization. For decades, the Japanese government had restricted the use of HND for international flights, and incentivized the use of NRT. That changed a few months ago, and now a lot of airlines are in the process of moving a lot of long haul flying from NRT to HND. I have a JL flight that is affected by this — when I booked the ticket months ago, it was originally an NRT departure. It got moved to HND.

    AA156 is in a similar boat, historically it operated from NRT and is in the process of getting moved to HND. One very minor schedule “adjustment” that has occurred as result of the COVID-19 mess is that AA has delayed moving 156 to HND.

    AFAIK, AA also has a late evening flight departing NRT that I presume they intend on keeping there.

  12. “unconfirmed and probably unfounded”…but I’ll tweet about it anyway because I’m an attention whore.

  13. My nephew is a pilot for AA. Air traffic controllers are getting the virus. Expect airlines to shut down.

  14. What happens when airlines stop using ‘prized’ arriving / departing slots as they adjust their schedules @ prized airports; JFK, ATL, MIA?

  15. I can verify that AA gave dozens of flight attendants bogus April schedules: CLT to LHR which is shutdown. Union claims they are working out issue. Either AA is just trying to figure things out or it could suggest they are up to something.

  16. As a 30 year airline veteran I can tell you I am out there everyday vigilant in my safety checks of your aircraft to make sure you are safely flying. I will continue to do this without fail until forced to stay home. We all take our jobs very seriously and especially now we are extremely aware of the happenings in and around our work areas. If anything this situation has brought us closer……in a sense….not physically…..6 ft rule remember??

  17. To distract myself I leave Flightradar24 running on one of my monitors. What surprises me is just how much air traffic, domestic and international, there is in the air.

  18. I believe JonNYC’s rumor report is true. This is just but one option AA is considering.

    AA is not “front running” per se, but rather, planning for immediate action in tandem with the federal administration who will release their “Phase III” plan this week. There is a possibility their action could be delayed until a “Phase IV” plan is announced which would include a broad based credit facility to provide liquidity to airlines (and other industries). Of course, any funds withdrawn from such a facility would require repayment at some time.

  19. Wife and I flew back to BOS from Montevideo a week ago tomorrow. We were in Jose Ignacio enjoying the beach as things started to fall apart. We had been in South America since Jan 28. Blagged a cheap RT in J MIA to COR Argentina (non-refundable) and booked BOS MIA on a separate itinerary to bracket it, down Jan 28 back Mar 29. By Thu Mar 12 we knew we had to bail; Argentina was sending closure signals and our plan to get back to Cordoba was looking dodgy.

    I started calling the AA Plat line (life time plat) Thursday, right about when the European closure was announced. As you might imagine, lines were busy. However, the AA call back system works, and we got a smart, patient agent on the line. We moved the flights to Montevideo for $600 each (bargain) and all change fees were waived on the rest of the transactions. Booked Wednesday 18th back to Miami. By Saturday we doubted that we could wait til Wednesday. Pharmacies in Punta Del Este were rationing sanitizer and masks. Argentina closed the border. Uruguay was closing bars and restos. Time to go.

    Called AA Plat again, got right thru, again smart, helpful agent. Moved us to Monday 16 March out of MVD to MIA, moved our flights to BOS up 4 PM next day. Flight was 5 hours delayed due to crew rest issues (had to dead head down with the Sunday evening flight in). Flight was full, crew was great, flight was comfy. We declined food, had a drink, set the seats to sleep, and flaked out til about 2 hours before landing. Congrats and thanks to the good people at AA, the pilots, the FAs, and the agents on the help desks. Everyone was great, it was all about getting us home under difficult conditions. Could not have asked for more.

  20. As I told you guys several weeks ago, especially the person complacent that we would get through this like SARS, MERS, etc, the shitshow in the economy was just beginning.
    Whe cares about the airlines.

    If we don’s pass a giant stimulus and then do it again, the great depression will be upon us.
    It’s likely going to happen anyway.. When it subsides I would not want to be in cash because your cash may lose it’s status as a store of value.

    Unless passing the bill is obvious by the opening of trading tomorrow , expect that we hit all 3 circuit breakers very early in the day, -20%. Then again on Tuesday. We will know at 6 PM ET today what’s likely to happen to the market and to bonds.
    Bonds looked like they stopped dropping Friday.

    The CARES ACT also would allow you to withdraw $100,000 from your retirement account. Great, now more selling!
    But, it leaves states and municipalities to their own devices while loaning money to airlines.

    Airlines? I couldn’t care less about them and yes, I’m angry

  21. I simply don’t understand why AA is still running a full domestic schedule with hardly anyone on these flights. If there was going to be a schedule change, it would have been run last night. Checking numerous domestic routes, everything still seems to be running. LGA-ORD still operating hourly. CRAZY ! Are they trying to go bankrupt ?

  22. Actually, AA has modified/cancelled some of their flights. Cutting numbe of flights available for certain routes. They have adapted and have cargo only flights available to help make sure supplies get where they need to go. Mt husband is an employee.

  23. Some of these comments amaze me. This is our livelihood that so many of you are willing to dismiss. To say you want the airlines to belly up is ludicrous. I have been out here working thru this total fiasco and hope to continue with my job until I so decide it is time to leave. And AA is not running a full domestic schedule as you suggested. We are trying to survive through all of this frenzy and a little bit of empathy from some of you would be appreciated. Thank you.

  24. For anyone wondering about the empty passenger seats and why we are flying, that plane probably has a full belly of cargo..

  25. I work for american Airlines and flights are being cancelled on a daily basis none permanate yet but I’m glad it hasn’t changed completely yet as so many will be outta of work. But some of these flights carry 0 pax at times with no cargo and that’s bad for business but this quarantine needs to be given a chance to work otherwise Airlines will have no choice to close down completely to prevent future spread of the virus.

  26. To Karen and Ayn yes we are out here working our asses off and the public just talks , they don’t know the industry. I just go about my job ensuring their and the planes safety. Yes cargo is maxed out on many flights… safely onward…. 30 + year veteran.

  27. All of these negative airline bloggers hoping airlines go belly up will be the first to wish they were back! You need to be praying for everyone to get thru this and for a new administration to be running this country after this crisis

  28. As a long-time, loyal AA flyer (Executive Platinum for more than 20 years), I can honestly now say that I would not be disappointed to see AA shut down. Not for 2-3 weeks. Permanently. They are simply so awful, with incredibly packed in seats, dirty planes, skimpy mechanical work resulting in frequent, long delays, terrible terrible flight crew attitudes (delayed one time several months back when the DFW to HKG pilots strolled up about 2 minutes before the flight and caused a 45 minute delay that made me miss my connections in HKG – after take off the pilot announced “sorry folks we were delayed due to our inbound flights” – we all know that for a 17-hour flight you weren’t working on some “inbound flight”), spoiled rotten flight attendants who have the worst attitude in the industry, and a leadership team led by “Little Douggie” who probably couldn’t run a lemonade stand properly.
    Sorry, but after bearing so much awfulness for so long, my patience and sympathy for AA is forever gone. So sad that what was once the pride of America, and an airline that I was proud to fly on, has become so simply awful.

  29. EdSpark58, It is sad to see a 20 year dedicated fan feel the way you do. I as a 33 year veteran of one of the 3 major air carriers completely understand your point of view. I am not with the AA family but I am also not unaware of your situation as all of us in the majors have had our bad times. My grandpa who was the president of the Cadillac Division in the late sixties and early seventies told me once that your membership is as only as good as its leaders. I do think that the leadership at AA has run its course. It is time for the current leadership to go and new leadership to come in. I’m not sure if it’s all about timing but I have to say that Oscar has done a fantastic job with our company. He brought the words human compassion, and employee respect back into the view of company policy regarding management and employees. In return we are in a much better place. I’m sure I can already hear all of the negative comments coming but I do wanna tell you that I’m sorry that you feel the way you do after 20 plus years of solid patronage.

    Raymond

  30. Hello Sir Raymond !!
    Thank you for an intelligent, well-written, thoughtful response. And I am beginning to hear good things about United.
    You know, I own my own company here in the U.S., and have an office in another country, too. I find myself traveling (literally) 14-16 times a year internationally (always business class). A few years ago, it was AA-only travel. And now? Now it is anybody but AA. And these are all business class tickets. And yet, with American, I am treated something akin to “something that they got on their shoe and wished that they hadn’t stepped in”.
    Yet, when I fly EVA, or China Airlines (NOT Air China), or Cathay Pacific, or Asiana, or Korean, or ANA. Well, when I fly them, I am treated very, very well. Great food, Incredible service. Wonderful seats. Really a first-rate experience. And if there are any flight changes, then I am taken care of immediately. Just the other day, I had to write a letter to AA Customer Service because I needed to change my flights (one of my flights was cancelled for early April). And when I tried to change it, AA wanted to charge me the $400 change fee !! I swear, I am not making this up !! I couldn’t get to my destination in April because of flight cancellations, but AA wanted to charge me $400 to change my ticket !! IS THERE ANYBODY READING THIS WHO THINKS THAT THIS IS ACCEPTABLE CUSTOMER SERVICE??? Oh, the ticket was a fully-refundable business class ticket. Unbelievable.
    AA really really needs major work to even become a bottom tier carrier. Right now, they aren’t even on the charts.
    All Doug Parker cares about are his precious Concierge Key (I wonder how well they are supporting you now, Douggie???) and chasing after Spirit passengers (why?). Everyone else is worthless to him.
    New leadership needed. And then work their way down.
    Ed Sparks

  31. Agreed,
    Stay safe and lets all get through this. I too agree with your named international carriers. They are way ahead of us in quality of intl service.

  32. No way that came from American Airlines thats to smart a decision coming from those guys. Monkeys could run that company better then what usair did to that company!! Shut down HELL yes coming from them NO WAY!!! Airlines, the entire country needs to shut down and shut down for at least 10-14 days to stop this thing otherwise this thing is going well in summer! 331 thousand morons still flying around….shows you how stupid this country is!

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