Speaking to the airline’s pilots last week at an internal question and answer session, American Airlines CEO Doug Parker reported that the airline has “a schedule announcement going out to the whole, to our customers, international in a couple weeks or something right? More to come.” In fact “the pilot group’s seen a good bit of that since you can see what’s actually in the bidding” that pilots list themselves to work. American’s announcement will come “in a couple of weeks” and also talk about “what we plan to fly next summer and what we don’t plan to fly.”
What Are American’s Prospects For International Flying
Senior Vice President Vasu Raja explained in the session that “the forecast for international flying is really quite rough.”
We’re flying somewhere between 10%-25% of our international network.. and there is indeed very limited demand for it. As we see more spikes in coronavirus cases that demand is continuing to plateau at a really really low level.
Beyond that even those customers that are willing to travel to Europe have a lot of uncertainty about what the quarantine protocols are and even what’s open out there. Right now the prognosis for international is not really that good.
Interestingly we are seeing premium has not taken as much of a hit as what coach is, on a given international flight we’re flying 15% – 20% full in premium when historically that cabin would be entirely filled. So that’s certainly not enough to go and sustain the international network, especially because premium can be as much as 50% – 60% of the revenue on an international flight.
What International Flights Will American Add Next?
Raja explained the factors that drive the airline’s decision to add flights,
[T]he international that you do see out there are really a function of two things: one passenger loads that are above break-even load factors, two enough cargo in the belly of the airplane where it’s greater than our break-even cost to fly, or three a mix of the two.
Looking at the possibility for a mix of passenger revenue and cargo, he offers that they’re “looking at actually adding back a couple of sections like in Miami – Sao Paulo or Miami – Chile” in August because “there isn’t a ton of passenger demand, there isn’t a ton of cargo demand, but the two together could maybe produce enough payload that’s greater than our cost to operate the trip.”
He doesn’t believe, however, that there are many markets like that, “there isn’t a ton of demand for international and a lot of uncertainty around international business travel.”