American Airlines has dramatically slashed its August through September planned schedules, as all US majors face the fact that the Covid19 epidemic in the US has been allowed to get out of control. The consequences are demand has dropped for late summer to fall air travel, on some routes by 70%.
American has also mortgaged its brand identity – putting it up as collateral with hundreds of airport slot pairs, so that it can raise another $1.2 billion.
Analysts were delighted American had seen sense, considering its previous “fly and be damned” approach a disaster in the making. American is considered to be the financially weakest of the major groups at the current time.
The reintroduction of the MAX could technically be as soon as October, yet airlines are baulking at the prospect of taking delivery – even getting the ones they already have airborne again.
“It’s almost as if they just don’t actually want them”, said one analyst. And they probably don’t. For one they have to pay for them, and if they put them into service it’s almost certainly now at the cost of taking another aircraft out of service for a second time in months. Pilots and crews have to be certified and right now that’s not something airlines want to focus on.
IAG – representing British Airways, Aer Lingus and Iberia, American Airlines, United and Delta (also representing AF-KLM and Virgin Atlantic), have all called for a US-UK-EU agreement on passenger COVID testing and management.
The reason, quite simply is to restart the profitable Transatlantic routes, especially to New York which represents about 40% of daily flights over the ocean.
With blocks on US citizens travelling to Europe (or returnees coming back from the US), and the pandemic raging in the country, a 14 day quarantine period is more than enough to stop any thought of travel that is basically more than essential.
Flights are already taking place, but aircraft are almost empty, schedule changes and cancellations are inevitable, and forward bookings are low heading towards unviable.
The airline groups and airports want to see a universal policy on individual testing before travel, so that quarantines can be dropped.
That means rapid testing kits and facilities.
China considered such a process but considered it unviable – rapid testing is unreliable and expensive. They opted for a written doctors certificate from incoming travellers, that has to prove you’re Covid negative.
You can watch this space – but it will be a while. None of the governments involved have even started to consider it.
Alaska has formally been invited to join Oneworld, but that’s not the bigger news. The airlines CEO during the company quarterly earnings call, warned airlines generally, to stop dumping low cost seats into the market because nobody was flying.
The argument is that those seats go either unsold anyway and force others to reduce prices – something they can ill afford under current circumstances.
Many airlines in the US are now cutting back their over optimistic schedules. The massive upsurge in Covid cases has simply destroyed the recovery they briefly started to enjoy.
Southwest posted a loss of $915m and announced a ban on anyone refusing to wear a mask in airports or aircraft.
It’s the strictest policy so far announced, designed to ensure passengers have confidence to fly.
Following a combined Belgian Government and Lufthansa Group bailout worth €290m, the airline is to be restructured.
The plan is to reduce the airline now, but then increase its size by 2026 to as many as 12 long haul A330 family aircraft. It currently operates ten, though most are grounded.