On Thursday American Airlines spoke to investors and journalists on their earnings call about the financial results during the first quarter and the challenges that lie ahead.
After the earnings call, as they always do, senior leadership at the airline hold a forum where they speak to employees and take questions. Here are 7 of the things they shared during that session, having reviewed a recording of that session.
It’s not just airlines – and airline contractors – who got a big piece of the federal CARES Act. U.S. airports also had $10 billion in grants set aside for them. Payouts are based in part on passengers – but also debt and cash ratios, which created some strange payments to small airports like one in Maine that was awarded enough to operate for 25 years.
United Airlines set the world on first when David Dao was dragged off of a United Express plane and bloodied three years ago. United’s CEO Oscar Munoz apologized… for having to re-accommodate him.
The worldwide outcry was so great that airlines had to revisit their policies for involuntary denied boardings. Now, as United does everything possible to reduce costs, it is scaling back efforts to control the sort of denied boardings that led to David Dao’s being dragged off a plane.
During this morning’s earnings call, United Airlines President Scott Kirby told investors and journalists that the carrier is “planning for zero net passenger revenue for rest of year and into 2021.”
They hope demand recovers but they have plenty of places to go for cash and are driving down expenses. Come the fall the only place left to go for cuts will be reducing employee headcount. They even talked about taking loans out against the MileagePlus program.
The Freddie Awards are the voice of the frequent traveler. Each year millions cast their ballots for the best in loyalty. In normal times the industry comes together at the awards ceremony the last Thursday in April to see the winners (and each other).
Like Delta, American Airlines is capping ticket sales to make sure there’s enough room on their flights for social distancing. This will run through the end of May. And they’ve done an about face on prior policy and will even compensate volunteers to travel later in order to avoid filling up planes.
When American Airlines announced the suspension of most meal service in late March, it made sense. This substantially reduced interactions between customers and flight attendants.
At the time the airline said this suspension would last through April 30. I assumed it would be suspended indefinitely. However it turns out that American is bringing back some catering on flights less than 2200 miles effective May 1. This is available to all passengers in all cabins.
Delta is going to cap the number of seats they sell in each cabin of their aircraft through June 30, to promote social distancing. Delta will also require customers to wear face masks starting May 4.
To show how quickly things are changing – the modern day equivalent of one being as a thousand years and a thousand years one day – it was only Monday that American announced flight attendants would be required to wear masks and that starting May 1 they’d begin to roll out complimentary masks for customers as an option, subject to supply chain and operational constraints.
Indeed it was just six weeks ago that American still disciplined flight attendants who wore masks.
Trivago, which is majority-owned by Expedia, along with 7 other companies wants Google to stop trying to collect on first quarter ad spending. These companies bought advertising, sold travel, but in many cases the trips didn’t happen – so they aren’t seeing revenue from those sales.
These companies are looking to the German government for bailouts, and want a bailout from Google as well because these companies would otherwise “be forced to use government loans to pay their debts.” German taxpayers would, in effect, be sending money to Google.
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 »
