Should American Airlines Be Saved?

News notes from around the interweb:

  • American Airlines was the worst performer financially before the crisis. With more debt than ever it’s not likely to succeed once the crisis ends. Limping along with financial help from the government will just drag down the rest of the industry. At least that’s the thesis of this piece, “Is American Airlines Worth Saving?”, which outlines a case for the Treasury Department to deny a CARES Act loan to American.

  • Wow: Inquiry alleges tampering of hard-landing A321 cockpit recorder

  • Atlanta airport is installing internet-enabled smart hand sanitizer dispensers that will ping custodial staff when they need to be refilled. Hand sanitizer dispensers. Connected to the internet. That say something when they’re thirsty. The virus may kill us all, but we’ll leave behind a robot society capable of asking for hand sanitizer.

  • On Thursday morning a reader suggested I go to the CLEAR website and ask for a membership extension because I haven’t been traveling. I used the live chat feature and they immediately extended me by 3 months.

  • Definitely bummed to see this property go.

  • Maryann Mazza was the reason to be a member of the Admirals Club when I lived in DC. She did amazing things in Sabre. And she got me home to Austin many times, when working with anyone else I’d have been stuck at National airport. She has retired after 44 years with American. It’s people like Maryann (and the ladies in the Austin club) who created loyalty to the airline, loyalty that has withstood many of the mistakes that have been made by this management.

  • Face masks required at Washington’s Dulles and National airports “Exceptions include children under age 10 and people with medical conditions that prevent them from wearing a face covering.”

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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Comments

  1. Ah that’s suck about Maryann, she helped me out so many times and always recognized me even after a while of skipping the club.

  2. I don’t think that The Feds will easily let American fail, just as they strongly resisted letting TMobile and Sprint take that market down to three major players. Whether they use the CARES money as the dip, just blantantly bail them out, or they force a merger (Alaska?) to cover giving more financial support, Dems won’t want the u ion jobs to go away, and Texas Republicans (and Charlotte, AZ, etc) won’t want to let a home business that big die.

    My only hope is that along the way, someone fires Dougie P.

  3. I am AA Platinum Pro, one more trip would have been ex plat. I am 60k miles from the million miler joke. I have about a million miles in my account. Because of the horrible treatment that AA has handed out to their passengers over the last 18-24 months, with delays, lies, cancellations, and horrible service, I would give all of that up if AA would disappear. That airline cannot be saved, the management thinks they are running some other kind of business, I don’t know what that would be but it would involve having a captive audience or conscripts. Maybe they should go run prisons.

  4. AA’s employees only have to look to Parker and company ( that includes Kirby) for most of the reasons they’re where AA is now, setting aside the virus outbreak. Merger with AS No No Hell No !!!

    We don’t need those issues. Parker was fine at America West low cost carrier akin to Ryan Air but to run and manage a real full service airline the proof is in the pudding as they say. At AW he crammed passengers in and look what happened once he came to AA. Service is slim to none, planes are dirty and old, upgrades what upgrades?

    Let it go but for heavens sake don’t ruin AS.

  5. If American Airlines “fails”, that does not assure that it disappears.

    It will likely mean that the current shareowners will be wiped out and that the debt-holders will become the defacto owners. Those new owners can then decide what to do with their brand new shiny toy–liquidate it piece by piece, sell the entire company to a non-airline entity like a hedge fund, sell it to another airline-entity (will take government approval, and not likely), or recapitalize it by issuing stock in a successor airline company and continue to operate as an airline of some scale.

    It is hoped that in any instance where the old AA continues to fly after bankruptcy, that most/all of the Senior Management are not retained, and it starts with fresh ideas instead of the stale ones (more seats, smaller lavs, unmotivated crews, etc.) that aided its demise.

    But to the basic question: Yes, let AA fail. And from its ashes will rise like the Phoenix. This will hasten the inevitable, and also save the taxpayers a lot of cash, some of which might land it the pockets of current management under the guise of “retention bonuses”.

  6. From a self preservation standpoint, the 200,000 AA miles I have, I would not like to lose. (I was supposed to burn some of them this month, but COVID 19 got in the way). To the extent shareholders take a bath, I don’t care.

    But Parker needs to go. As a leader, he stinks. His bet with the $60 stock price and statements about “never losing money again” are poor form for a true leader.

    Ben Baldanza and Seth Kaplan were discussing the best airline CEO since 1978. They brought up the innovations Bob Crandall brought to AA in the ’80’s. Innovation is what AA needs more of, not a spreadsheet pusher who’s just trying to find ways to cram more seats into coach.

    When you’re a ULCC, you sell “cheap” because that’s what you are. When you’re not a ULCC, you need a product people are willing to pay for, it’s that simple.

  7. Very sorry to see that the IHC Moorea is closing. It was a beautiful property on what I believe to be the most beautiful island in the world. Unfortunately, its location on the northwest corner of the island was not close to the better restaurants and shopping. Hopefully, another chain will pick it up.

    This leaves only the Sofitel and the Hilton for high end properties on this amazing corner of the world.

  8. While a discussion of AA’s ongoing viability is worth examining, the author of the article in question is fairly well known in the discussion / enthusiast circles as being somewhat biased in his views of “certain” air carriers. He was formerly employed by a competitor of AA – one that would benefit greatly from the demise of AA.

    Unfortunately, his verbosity, bludgeon approach to discussion and cherry picking of facts led to his being banned from two airline / aviation themed discussion websites.

    Here’s an example of cherry-picking from the comments section of his article: “AAL has very likely lost money in LA first because of the aged 767-200s that operated transcon routes which were then replaced with 110 seat A321s that have some of the highest unit costs in the industry. AAL announced its plan for the A321Ts only to be followed by the JBLU Mint program that drove down transcon premium cabin fares. AAL has held onto its A321T strategy but there is no way that AAL can make money on JFK-LAX or else DAL makes a killing using 767-300ERs that carry twice as many seats for much lower incremental increases in costs – and DAL carries several million pounds of cargo.”

    A321s in AA’s Transcon configuration will indeed have higher unit costs – as compared to other A321s. But then, he (seemingly) extrapolates this fact as being germane to DL’s LAX-JFK performance using B76-3s.

    Now, admittedly this information is about a year-and-a-half old, but is derived from the public information that’s available (a phrase that he often touts) – AA has (had) a yield advantage vs. competitors on LAX-JFK. Further, AA enjoys a unit cost advantage on A321T operations vs. DL B767-300 operations. Mission profiles for the aircraft are roughly the same, with perhaps the exception of a few ATL- Florida mid-haul sectors that would affect operational costs incrementally against the backdrop of DL systemwide B767-300 ASMs.

    Start with D.O.T. Form 41 data.

    Again, a topic worthy of discussion? Absolutely. But, be careful of the bias behind the byline.

  9. I just took a flight from Syr NY,to Birmingham Ala I hate to fly,seeing my grandchildren was more important. My flight was awesome and so were the pilots and attendants. I am a die hard Delta person. After my flight from Syracuse to Charlotte to Birmingham and back I would go on Amercian again. If they can win me over they are worth saving. Awesome job AA I had a great flight. My flight 6am down and 4:44pm back May 13th return May 27th.

  10. @aaway — Indeed, the author of this piece is a well-known AA hater. Kind of like getting your opinion of Israel from an Iranian cleric.

    The whole idea is, of course, stupid. AA isn’t going anywhere. The way some people talk, you’d think they were Sears. They were a profitable airline before COVID-19, and will be a profitable airline afterwards. Meanwhile, the author’s favorite airline — Delta — has managed to lose billions in its investments in Latam and Virgin Atlantic during this crisis. His preference for management teams is questionable, to say the least.

  11. When there’s 42 minutes worth of folks singing your praises when you retire, you know you’ve done something right.

  12. The IHG on Moorea was having financial trouble already. Workers had been striking there for months. I stayed there during the strike. The place had only a skeleton staff. Staff told me that they could not afford the wages that the strikers wanted and it was a matter of time until hotel folded. My driver to the hotel told me that they get harassed and don’t like to take guests there. The strikers are getting their due. There literally were 20 workers hanging out so many signs that you could not easily tell it was an entrance to the IHG. They got what they deserve. No income. The hotel on Tahiti can be staffed by non-locals more easily. Beautiful place. But go back into the islands, you get a lot of stink eye. Not the friendliest paradise.

    Stayed at one hotel on Huahine and one neighbor was blasting music for 10 hours a day as loud as they could with speakers from across a small inlet in rural area. I assume just for the benefit of the hotel guests. Welcome to FP. Lol!

  13. IF AA goes Americans will have ONE choice to fly internationally UA. The others do not fly to Paris, Frankfurt, Japan, etc nor CAN they. We will be stuck with once airline to rack the prices up with no competition other then FOREIGN carriers. Then what happens when UA has a problem and we have to rely on only FOREIGN carriers?

  14. 1976 was an extraordinary year for American airlines IBM and American had developed its reservation system and extended ‘saber’ to travel agents this was a pivotal moment for both American and the airline industry . American also was awarded ‘carrier of the year’. This was a time in its history that ‘attracted’ to it a breed of employees that charged into the company doors with a willingness and ability and desire to serve like no other time. People like Mary Ann Mazza of Hartford and Washington DC made the company. Tha t’s what I can say. It seems like such a brief moment in history now but one that should not go without speaking of. There’s also Kevin Kelly of Hartford NY ORD DFW and IMA hired in 1976 (still working on the line) who came with the same enthusiasm ,dedication and work ethic. He worked reservations ,ticketing then purser international flying .He made it back from a F/A layoffs in the 80’s .. was striking for fair wages in 1992. Wad there when The shoe bomber made it past security in Miami December 2001. He listened closely as dear friends and colleagues told of their experience. Those days changed our lives forever( imagine being a fight attendant). He watched the planes go down with 911 while on a layover in Spain. Through it all he’s held fast committed to duty. Doubling down if anything making sure a standard of care and respect has been maintained. Now it’s covid 19.. he’s flown every flight on his schedule to London yet walks with courage and resolve. Leads by example. He’ll continue. American is lucky it’s not about the airline anymore. It’s about the people. And good remains

  15. @tomRI – not sure why you have such an issue with FOREIGN carriers, as many travelers would welcome increased FOREIGN carrier flying in the US as FOREIGN carriers often have higher levels of service and have not lowered themselves to the lesser AMERICAN standards.

    (oh, you should look up “Delta Airlines” too, a US-based carrier that flies to cities such as Paris, Tokyo, etc. – btw they also have partial ownership of many FOREIGN carriers)

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