American's Pandemic Reality: We Will Be a Much Smaller Airline, Says CEO
Skift Take
To keep cash coming in, American Airlines needs passengers to buy tickets for late this year and early next. But there's a problem. American doesn't know what flights it will fly that far in advance.
Passengers looking to lock in cheaper airfare late this year or early next on American Airlines — or any U.S. carrier — may want to consider the risks. Amid so much change, carriers are unlikely to fly what they're selling.
American executives made that clear Thursday on their first-quarter earnings call, telling analysts the carrier will emerge from the Covid-19 as a smaller company. American is retiring its Boeing 757s, Boeing 767s, Airbus A330-300s and Embraer E190s, a net decrease of 80 mainline airplanes, and considering other retirements, mainly of older narrow-body jets. In addition, the airline's regional arm permanently will park roughly 20 Bombardier CRJ200 jets, an inefficient 50-seat airplane.
American's executives told analysts they had no choice. Demand is not returning soon, they said, and American has been burning $70 million in cash per day. Executives said they can cut burn to around $50 million by June, but it remains a significant problem, and the airline cutting flights and raising liquidity, includin
