Parker pointed out that the airline dropped service to 13 cities as early as November “Squawk Alley” shortly after House Speaker Nancy Pelosi, D-Calif., rejected the idea of a separate aid package for airlines unless it was part of a wider stimulus measure.
Parker said American and other major airlines are pushing for further flight cuts in hope of additional government aid. “There will absolutely be a cessation of service for small communities and there will be far fewer services for larger communities,” he said with no further relief from the coronavirus.
Earlier this week, President Donald Trump stopped broader relief talks and then pushed for smaller measures that focused on airlines, small businesses, and stimulus measures for individual Americans.
On Thursday morning, before Pelosi’s comments, the president claimed “some very productive conversations” had resumed under stimulus negotiators.
The first round of government assistance during the pandemic took place in March. She prevented airlines from downsizing and asked them to maintain a minimum level of service until September 30th.
“It gave us the means to keep the workforce that the airline didn’t have enough demand to keep them busy,” said Parker. “This enabled us to serve more markets than we could otherwise have done.”
The travel industry has been severely impacted by the coronavirus pandemic. Air traffic has improved since its virus-era low in April, but averaged seven days TSA screenings remains about a third of its 2019 level.
According to Parker, American Airlines is forecasting a year-over-year revenue decline of around 75% for the third quarter, slightly better than the revenue decline of around 85% in the second quarter. The company estimates the decline in the fourth quarter by 65%. “So that’s a gradual improvement, but on an incredibly low basis,” he said.
“We can’t wait any longer. Of course, if we are forced to, we will actually cease service for many markets and it will be much slower to recover and help the country recover from this pandemic,” said Parker.
In addition to service cuts, American began Vacation about 19,000 workers this month after the first relief has expired. United Airlines has also given workers leave. Both companies said they would reverse the cuts if aid was extended.
Parker said the need to downsize is a consequence as it takes time to retrain workers on leave, especially pilots. It’s a process that can take between 12 and 15 months, Dennis Tajer, an American Airlines pilot and union representative, said on CNBC last week. “It’s a very big ship, and if you stop it, it takes a lot of energy to get it going again,” Tajer said.
“We’re at a point where unfortunately people are starting very slowly, but people are starting to go back to work. Companies are starting to talk about their people traveling again, and unfortunately all of this is being hampered by vacation” service delay said Parker. “We just won’t be able to snap back as quickly as demand has fallen.”
“This is bigger than just trying to keep the airlines afloat,” he added. “This is about keeping the critical infrastructure for our country alive in order to get it out of this pandemic.”