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American Airlines CEO quells U.S. bankruptcy talk, says demand improving
May 28, 2020
(Reuters) – American Airlines Group Inc’s (AAL.O) is not considering a Chapter 11 bankruptcy filing, Chief Executive Doug Parker said at a conference on Wednesday, and shot down 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 said, adding: “I don’t think you’ll see any airline go by the wayside as a result of this crisis.”
However, 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 (BA.N) 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.
Global airlines are suffering an unprecedented downturn as the coronavirus pandemic has brought air travel to a near standstill.
American’s revenues are still down by about 90% due to the outbreak, but demand is improving and its net receipts have been in positive territory for the past 2.5 weeks after a period when airlines were receiving more cancellations than new bookings.
“Passengers are feeling more and more comfortable flying,” Parker 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.