American Airlines CEO says it ‘feels like we’re at the bottom’ as revenue tumbles 90%
The record drop in air travel demand because of the coronavirus pandemic appears to be as bad as it’s going to get, American Airlines CEO Doug Parker said Wednesday.
“It certainly feels like we’re at the bottom,” Parker told CNBC in an interview. “Our revenues are down 90% on a year-over-year basis and they’ve been that way now for a few weeks. The real question is how long you stay at the bottom and when do we begin to recover. I don’t think I know that better than anybody else.”
American and other large U.S. airlines, including Delta, Southwest and JetBlue on Tuesday announced agreements with the Treasury Department on the terms for their share of $25 billion in government grants and low-interest loans.
American said the Treasury Department approved $5.8 billion in assistance — a $4.1 billion grant and a $1.7 billion low-interest loan. The Fort Worth, Texas-based carrier said it plans to apply for another government loan of around $4.75 billion.
Airline executives have said the coronavirus and measures to stop it from spreading from stay-at-home-orders to corporate travel bans has had a greater impact than the Sept. 11 terror attacks.
Parker said it isn’t yet clear when travelers will return en masse, but that some encouraging signs are emerging such as an uptick in bookings for more than three months away and some reservations for corporate events in the fourth quarter.
“There are indications that the world is ready to start traveling again but they’re very preliminary and it’s certainly not happening today,” he said. “Whenever people are prepared to start traveling again our team’s going to be in place and ready to take care of them.”
Parker added that the airline is not planning to defer new aircraft orders, such as the Boeing 737 Max, which is still grounded after two fatal crashes, but American will retire older aircraft such as Boeing 757s and 767s earlier than planned.
“The new airplanes that are scheduled to come, we want,” he said. “We don’t have any intention of working with the manufacturers to defer or cancel those orders.”