Doug Parker, the chief executive of American Airlines has been reacting to the passing of the Coronavirus Aid, Relief and Economic Security Act (CARES Act – see what they did there), a $2 trillion bailout for the U.S. economy that includes $50 billion just for airlines. Parker shared his thoughts in a video message to employees that was also made public.
Just a couple of weeks ago, Parker was saying that he wasn’t too worried about the impact that Covid-19 would have on American Airlines. Yes, it was bad but American had large cash reserves and was still operating plenty of flights… Things, however, changed very quickly.
“It’s amazing how much has changed in the two weeks since I last recorded a video message to you all,” Parker says.
“At that time we had experienced the impact of Coronavirus to a handful of other countries but we were still flying to many of our international routes and all of our domestic flights. Our load factors were starting to fall but over 60 per cent of our seats were still filled.”
“Since then, the virus has continued to spread abroad and rapidly throughout the United States. With much of American now living under shelter-in-place restrictions, demand for air travel has fallen precipitously. Today we’re flying less than half of our previously scheduled domestic flights and those aircraft are flying with fewer than 15 per cent of the seats full,” he continued.
Parker, along with the chief executives of several other airlines including Delta and United, had warned lawmakers they would be forced to cut essential air services and involuntarily furlough thousands of workers as the situation rapidly deteriorated.
As the largest airline in the United States, American is eligible to receive about $12 billion of the $50 billion made available in the CARES act. Parker says he’s confident the rescue package, along with cash reserves will “help us to ride through even the worst of potential future scenarios.”
Half of the $50 available is contingent on airlines fulfilling two important obligations:
- Some sort of service is maintained on currently operated routes
- There are no involuntary employee furloughs
While Parker says he doesn’t yet know if American will meet all the obligations to receive the bailout, he says he has spoken with the administration and is confident any requirements won’t be too “onerous”. That means, for now at least, there won’t be any furloughs although staff will likely found themselves on basic or minimum wages only.
“So yeah, we’re going to be okay,” Parker says of the bailout. “We’re going to be okay because what you do is important to the world and you do it exceptionally well. And we’re not just going to be okay, we’re going to be great.”
“We’re going to lead through this confidently and safely and when the flying public returns, we’ll be here waiting for them, getting our country moving again and taking care of people on life’s journey.”
Mateusz Maszczynski honed his skills as an international flight attendant at the most prominent airline in the Middle East and has been flying throughout the COVID-19 pandemic for a well-known European airline. Matt is passionate about the aviation industry and has become an expert in passenger experience and human-centric stories. Always keeping an ear close to the ground, Matt's industry insights, analysis and news coverage is frequently relied upon by some of the biggest names in journalism.