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.
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.
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.
Either blocking seats on planes for social distancing is important, or it isn’t. American Airlines will no longer block seats for passengers (claiming it isn’t necessary) but will continue to block seats for flight attendants (for their protection).
A roundup of the most important stories of the day. I keep you up to date on the most interesting writings I find on other sites – the latest news and tips.
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.
Speaking to employees this week at a Crew News forum, American Airlines CEO Doug Parker shared that he wasn’t in the loop on the decision to cut meals from inflight service. Cuts are being made across the company faster than ever before.
Flight attendants at American Airlines are submitting “a couple dozen” reports per day on passengers refusing to wear masks, according to Senior Vice President of Flight Services Jill Surdek at a question and answer session with flight attendants this past week, a recording of which was reviewed by View From The Wing.
Corporate security reviews each report and it’s a “super easy decision” to ban the passenger after they’ve been reported “multiple times.”
A RAND Corporation study looks at travel patterns to estimate “China’s reported COVID-19 caseload was undercounted by a factor of nearly 40.”
In fact based on outbound air passenger numbers, to have just an even (50/50) chance of COVID spreading to Japan, South Korea, Thailand, Taiwan, and the United States – as it had by January 22 – you’d need an infection rate 37 times greater than China officially reports.
A roundup of the most important stories of the day. I keep you up to date on the most interesting writings I find on other sites – the latest news and tips.
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 »
