American Airlines CEO strikes optimistic tone, contrasting with peers at Delta and United
American Airlines CEO Doug Parker is optimistic that the country may be "ready to get moving again," even as his counterparts at other major carriers repeatedly warn of tough times ahead for the industry.
"In just the last week we started to see bookings outside of 90 days start to tick up a little bit," Parker told CNBC on April 15. "Those could be changed in the future... but it seems to be a little bit an indication that maybe our country is ready to get moving again.”
The leader of the world's largest airline continued his positive outlook in a separate message to travelers posted on American's website later the same day.
"When you’re ready to fly again, we’ll be here," Parker said after outlining all the steps American was taking to make travelers feel "safe and comfortable."
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But Parker's comments stand in stark contrast to those from Delta Air Lines CEO Ed Bastian and United Airlines CEO Oscar Munoz and president Scott Kirby. Delta and United are the world's third- and second- largest carriers, respectively, as measured by available seat miles for 2019.
"We expect to fly fewer people during the entire month of May than we did on a single day in May 2019," Munoz and Kirby told staff on April 15. They added that, while receiving $5 billion in payroll assistance from the government, employees should be ready for the airline to shrink its workforce after Sept. 30.
Who, then, is right?
Related: United Airlines warns staffing cuts to come as it slashes May flying by 90%
All recent indicators show passenger numbers way down. Screenings at Transportation Security Administration (TSA) airport checkpoints have held around 4% of the number a year ago for several days. Airlines for America data shows a similar bottoming out with passenger traffic down 97% year-over-year during the seven-days ending April 12.
Stabilizing traffic numbers, however, does not necessarily mean a recovery is in the offing.
Many states and major cities in the U.S. remain under shelter-at-home orders, including the economic juggernauts of California and New York. At the same time, restrictions on international arrivals remain in place in many countries around the world.
“I think this industry is going to be smaller for some period of time here as we build back, and I don’t know what that pace of recovery will be," Bastian told staff on April 8. "It will really be dictated based on when customers feel safe to travel again in large numbers.”
Related: Delta CEO says industry nears ‘bottom’ of coronavirus crisis, recovery a ways off
Bastian's message was, like that of Munoz and Kirby, that Delta would be smaller post-coronavirus — both operationally and in terms of its workforce.
Wall Street analysts estimate that passenger numbers will be around 30% lower next year than they were in 2019. This is about 10 points worse than forecasts just two weeks ago, an indication that things are getting worse -- not better.
In a report on April 13, Cowen analyst Helane Becker estimated that a 30% smaller airline industry could result in as many as 125,000 furloughs or lay offs. This would translate to a reduction of more than 35,000 staff at American, 25,000 at Delta and 27,000 at United.
"Job losses will come mostly from American, Delta and United as the other carriers look to wait out the downturn in demand," she wrote. "The airlines will likely look to make those hard decisions in September when hopefully demand starts to show improvement, with a clear indication of something returning to normal in 2021."
Related: US airlines’ first bailout aid was tougher to get and came with more strings than expected
Aside from Parker's comments, American has taken steps that show it takes the crisis seriously. The airline was the first to publish drastically reduced May and summer schedules of the major U.S. carriers, and could cut flights further if people do not start traveling again.
In addition, the airline has indicated that it will seek a $4.75 billion loan from the government's $2 trillion coronavirus bailout package. This is separate from the $5.8 billion in payroll assistance that it has already indicated it will accept.
The funds American plans to tap are, as analysts have pointed out, intended as something of a final alternative for companies that have exhausted nearly all other funding sources. Their only other option, barring the government funds, being bankruptcy.
Related: American Airlines’ summer schedule rebounds in some hubs, but not all
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Intro offer
Annual Fee
Recommended Credit
Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
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- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
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- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
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- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.
Rewards Rate
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
| 2X | Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Intro Offer
You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.As High As 100,000 points. Find Out Your Offer.Annual Fee
$325Recommended Credit
Credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.Excellent to Good
Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.