American Airlines President Robert Isom Says No Bailout Needed, Will Take The Money Anyway

In London just in advance of travel restrictions going into effect, American Airlines President Robert Isom traveled across the Pond to speak to employees there. American employees nearly 1000 people in the U.K.

He spoke at the British Airways headquarters at Waterside, and said that while they aren’t going to spend “even a dollar” that they do not have to, they owe it to customers not to degrade the inflight experience and that the company is “prepared to weather any type of storms that come up.”

He says there’s “enough cash on hand to weather downturns in the business.” The novel coronavirus is “unprecedented, the demand impact, but even this American has done well” – noting the airline’s liquidity over $7 billion, and working to improve it even more – but that the airline has to do “all we can to make sure we conserve that.” (They’ve just picked up another $1 billion shoring up their position and demonstrating that capital markets remain open to them without government intervention.)

Isom reports that American “has prepared ourselves to be ready for this time.” They’re doing this by trying to “size the company” for the demand that’s out there now. That’s why they’re “looking at voluntary leaves.”

He knows that American has “to be prepared no matter how long this is so that we can weather this storm” and that “it is more than likely that demand is slower to return to some of our international locations. So you’ll see that we have pushed flying to many points within Europe out a little bit further than just the next two months.”

Despite being ready, making adjustments to their business, and having plenty of cash he does think that American deserves a bailout – and when money comes they’re positioning themselves to be in line for some. In response to an employee question Isom offers his defense of looking to the government for money,

This is an industry problem. The depths of demand, a lot of that is driven by we’ve more or less shut off the ability of people to move freely… there does seem to be some precedent for taking a look at industry concerns.

Within the U.S. we’ve been in touch with really all the large agencies to make sure we are represented well, the industry as well is given some priority. Travel and tourism is really at the front of the line here in terms of being hurt.

Assume that we are talking to the appropriate parties in Washington. Assume that in the UK and the rest of the world most airlines are having that same discussion. It’s an industry issue, but air travel is vital to commerce in the long run.

I have great confidence that demand will return because that’s how business is done and that’s how so much leisure time activity is spent and consumed as well. We all enjoy it. It will come back but we have to have an aviation system that’s there when it’s ready to rebound.

…You can be assured that the American leadership team, Doug, me, others are involved in making sure that if there is something that comes about that American is taken care of as well.

Isom concludes, though, reminding employees “the good news,” that “American has done really a good job making sure we’re prepared to handle whatever crisis comes about.” Still, because of the “level and depths” of the effects of the novel coronavirus they’re making sure to “have a view to all potential resources that might be available and that we represent ourselves as such to our leaders in Washington.”

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, 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. AA was the only carrier NOT file for bankruptcy after 9/11 and held out as long as they could until they had no choice in 2011. Note that that was AA management and most of AA has that management (except for Parker and a few other) running and righting the ship again. UA is now the new USAir and was the first (or second) to cry for money along with DL.

    I think by the fall we might see AA returning stronger and a weaker UA and potentially DL (some of DL’s investments in foreign airlines have been ill-advised as those are some of the most likely to shut down).

  2. If they have that much cash on hand why haven’t they spent on service ? Gag me with a spoon!

  3. It’s mostly a confidence bluff, trying to keep the stock price up. AA at $10 down from $30 on Feb 12th. If DL and UA take the cash, AA will take it also no matter what conditions it’s under. Otherwise wise they put themselves at a horrible disadvantage via cash flow once things come back online.

  4. No bail-outs unless they (and other airlines receiving it) agree to stop the baggage/seat selection/boarding order/ etc. fees, which I’m told are not taxable. They are wrenching money out of passengers for what they used to do for free, and then getting away with not paying fair taxes on those ‘profits’.

  5. The size of the operation they are running is shocking to me–ORD-DCA is still seeing multiple departures per day, same for a near-shuttle schedule or ORD-LGA. This applies to tons of routes through the current system, though I know some draw-downs start to occur in weeks ahead. When you look at the seat maps, the planes have load factors of 10-20%. Hard to square that with them not spending a dollar more than they need.

  6. What a lovely way to do their part–we don’t need the money but will take it. Not any indication that that money might then be better distributed to people and organizations that DO need it. He should be made to sit in one of their economy seats, preferably middle, for the duration of the crisis. Does this idiot actually believe that such statements are beneficial to AA?

  7. He is talking to employees. Management will never tell the front line employees the truth. The employees are mushrooms, kept in the dark and fed shit.

    BK by fall guarantee!

  8. Such a misleading FakeNews. Cherry picking words to fabricate your point. Telling employees they have enough cash to face some downturn doesn’t mean no bailout is needed for situations like this. I bet you can’t tell the difference.

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