American Airlines Group Inc. is not considering a chapter 11 bankruptcy filing, Chief Executive Doug Parker said yesterday and dismissed speculation that a major U.S. carrier could disappear due to the coronavirus pandemic, Reuters reported. The U.S. airline industry is expected to be 10 to 20 percent smaller in the summer of 2021, Parker said, and its recovery would depend on how passenger demand and revenues evolve. Earlier this month, Boeing Co. Chief Executive Dave Calhoun said he thought that a major U.S. carrier could go out of business in the fall, when government payroll aid for airlines will expire. U.S. airlines, suffering an unprecedented downturn in air travel because of the pandemic, have warned they may need to eliminate jobs after Oct. 1 but Parker said the company aimed to avoid furloughs. Nearly 40,000 of its more than 100,000 employees have opted for an early retirement, reduced work schedule or temporary leaves, he said. American’s revenues are down by about 90% due to the outbreak, but demand is improving and net receipts have been in positive territory for the past 2-1/2 weeks after a period when airlines were receiving more cancellations than new bookings. Read more.
In related news, American Airlines Group Inc. said in a letter to employees that it must reduce its management and support staff by about 30 percent and may have to cut frontline employees as it downsizes due to the coronavirus outbreak, Reuters reported. All major U.S. airlines have said that they will need to shrink in the fall, once U.S. government payroll aid that bans involuntary job cuts expires on Sept. 30. Competitor United Airlines Holdings Inc. has also said it will need to reduce its management and administrative staff by about 30 percent. Read more.
