American Airlines CEO quells U.S. bankruptcy talk, says demand improving
Reuters
Published May 27, 2020 02:46PM ET
Updated May 27, 2020 05:15PM ET
By Tracy Rucinski
(Reuters) - American Airlines Group Inc (O:AAL) is not considering a Chapter 11 bankruptcy filing, Chief Executive Doug Parker said on Wednesday and dismissed speculation that a major U.S. carrier could disappear due to the coronavirus pandemic.
"Bankruptcy is failure. We're not going to do that," Parker told a conference, adding: "I don't think you'll see any airline go by the wayside as a result of this crisis."
Shares in American rose 5.5% in late trading.
The U.S. airline industry is expected to be 10% to 20% 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 (N:BA) Chief Executive Dave Calhoun told NBC 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.
"More and more people are feeling more comfortable today, but we need to get to a point where all Americans are as comfortable flying as they should be," he said.
American's planes were about 56% full over the long U.S. Memorial Day weekend, albeit in drastically reduced capacity, he said. American is flying about 20% of its normal schedule.
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Written By: Reuters
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