American says don’t worry about holiday flights: ‘We will have everybody we need to fly the schedule’

Oct 21, 2021

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As American Airlines approaches a critical holiday flying period rife with questions about its operational preparedness, the carrier — currently the world’s largest airline — says it is prepared for the challenge.

“We’re getting ready for the holiday season,” American President Robert Isom said Thursday on the carrier’s third quarter earnings call. “We expect a lot of passengers. We’re making sure we have the right people in the right places at the right times (and) we’re flying a full schedule.”

Isom noted that on completion factor, “We’re beating the other network competitors, doing a real nice job, (and) we look forward to the holidays.” He said that in September, American operations were “the most reliable in the company’s history.”

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Vasu Raja, chief revenue officer, said that during the holiday period, American expects to offer less capacity than it did in the summer. “Our (available seat mile) production is less than what we were producing in July,” he said. Added Isom, “The holiday is no larger than what we flew during the summer.”

American faced summer operational challenges due to the combination of poor hub weather combined with crew shortages, particularly during Father’s Day weekend.

On Wednesday, during the United Airlines earnings call, CEO Scott Kirby questioned whether competitors lacking vaccine mandates could ensure crews would be ready to fly during holidays. “Caveat emptor,” Kirby warned passengers booked on other carriers, referring to the Latin phrase meaning buyers should be vigilant.

In response, American CEO Doug Parker said, “We’re highly confident we will have everybody we need to fly the schedule. It won’t be a process that will be cumbersome on the operation. It will be some combination of testing and masks and social distancing.”

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As far as vaccine issues hindering operations, Parker declared, “We’re not remotely concerned now.”

While United requires that employees be vaccinated, the other three largest U.S. airlines have varying policies. Delta has no mandate, but has higher health care costs for unvaccinated employees. On Tuesday, Southwest abandoned a plan to put unvaccinated workers with pending exemptions on unpaid leave after a Dec. 8 deadline. American, meanwhile, appears to be encouraging unvaccinated employees to apply for exemptions.

In the pandemic, American Airlines took a different tack than competitors, rapidly rebuilding its domestic flying and making key hubs Charlotte and Dallas/Fort into two of the world’s two busiest airports. “We did a tremendous ramp-up to get to what we were doing during the summer,” Isom said. One result is that American remains the largest carrier in the world,

One analyst asked what was the point of ramping up the schedule more rapidly than peers. Parker responded, “We’re all working to add back capacity, to meet the demand we know is coming.” However, he said, “To get back more capacity than others, of course it’s not the goal. The goal is to maximize shareholder value (and) we feel good about our ability to improve relative margins.”

That underscores how the nation’s four big airlines responded differently to the pandemic. Delta sought to enhance its premium image, particularly by keeping the middle seat empty when contagion risk was a primary concern early in the crisis. United flew less, but placed a major aircraft order, and now looks to having the biggest widebody fleet when international travel resumes. Southwest added more cities than it ever had. American not only kept flying, but also enhanced codeshare agreements with Alaska and JetBlue, carriers strong in regions where it had been weak.

‘Caveat Emptor’: United CEO says rival airlines may regret lack of vaccine mandates

On the call, an analyst asked Parker whether American lawyers are talking with Justice Department lawyers about a settlement after the Justice Department filed a lawsuit in September. The agency alleges that the partnership between American and JetBlue is anti-competitive and will lead to higher ticket prices.

Parker said he is aware of no talks. “The company is not interested in these sorts of talks about settling this,” he said. “We feel very good about our case.”

“We’re going to go win the lawsuit,” he said. “This is highly beneficial to consumers. We’re perplexed as to why they filed this lawsuit.”

Pushing back: American and JetBlue strike back against DOJ complaint over Northeast alliance

Perhaps helping American’s cause are recent expansions by rival Delta both in Boston and New York, where its growth has been viewed by some as a weigh to counter the combined presence of American and JetBlue as partners.

For the third quarter, American reported an adjusted net loss of $641 million. “While we don’t like reporting losses, this was our smallest quarterly loss since the pandemic began,” Parker and Isom wrote in a letter to employees. Revenue was $9 billion, down 25% from the third quarter of 2019. July was profitable, American said, but the spread of the delta variant led to lower passenger counts and losses in August and September. The carrier offered guidance for the current quarter, projecting revenue to be down 20% from the same quarter in 2019, with capacity down between 11% and 13%.

Follow the leader: At Boston, Delta pushes to become No. 1 airline, surpassing JetBlue in departures

Featured photo by Zach Griff/The Points Guy.

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