Tag Archives for american airlines.
Once American Airlines is no longer restricted from laying off employees as a result of the CARES Act – October 1, 2020 – they will start staffing flights were fewer flight attendants. It will mean more furloughs and lower service levels.
Just before the pandemic grew out of control, American Airlines data revealed that frequent customers represented a declining share of airline revenue.
It seemed that a combination of award chart devaluation (higher prices for the best awards), product devaluations (less space per passenger on domestic narrowbody aircraft) and making status harder to earn (minimum spend requirement and taking away the ability to earn as much towards that via credit card) had in fact pushed frequent customer share of wallet towards competitors.
On Saturday I told you that a big international route announcement was coming from Americanincluding, quoting internal comments by CEO Doug Parker, “what we plan to fly next summer and what we don’t plan to fly.” That announcement is now out.
They’re revamping their international strategic focus, and bringing back many routes for summer while break-even load factors are so low thanks to the CARES Act. LAX is no longer their Pacific hub. They’re doubling down on close partnerships. And that means a lot of flight changes.
CDC Director Robert Redfield has something to say about American Airlines. He thinks it’s horrible that American will sell middle seats on planes, which he explained in response to a question by Senator Bernie Sanders, In doing so he seems not to know that American Airlines hasn’t blocked middle seats throughout the pandemic, and other airlines like United haven’t done so either.
It’s troubling that six months into the coronavirus crisis the CDC is only just now studying whether or not distancing on planes matters.
My home state of Texas is seeing a surge of cases, including in the Dallas area. But American Airlines flight crew at DFW and Dallas-based ground staff were photographed not wearing masks.
When airline employees don’t wear masks, they’re endangering passengers and scaring them away. That’s bad for business. And when employees don’t wear masks, passengers model them. It’s tough to get passengers to wear masks when pilots don’t.
A crisis is an opportunity to rethink the business. In normal times there are plenty of good reasons not to take chances, and too many entrenched interests standing in the way. Those are largely swept away. And the old arguments favoring the status quo hold little weight when the status quo is no longer an option.
Parker is right that the pandemic and rebuilding the airline’s routes and traffic from almost zero is an opportunity to re-think the business. Unfortunately he does not articulate here a creative new vision for how American Airlines might do that.
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).
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.
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 »
