American Airlines has 'no plans' to close hubs when it shrinks post-coronavirus
American Airlines is promising to come back at all nine of its U.S. hubs even as executives admit that they do not have a full view of the impact the coronavirus pandemic will wreak on the airline business.
The promise comes as the Fort Worth, Texas-based carrier unveiled deep cuts to its schedule as it continues to grapple with the impact of COVID-19 during a quarterly earnings call on Thursday. American reported a $2.2 billion net loss in the first quarter -- worse than even its $2.1 net loss in all of 2008 at the height of the Great Recession.
American will fly just 15% of its Miami (MIA) schedule, and and up to 15 departures a day from New York's John F. Kennedy (JFK) and LaGuardia (LGA) airports in May. And in June, U.S. capacity will be down 70% year-over-year and international capacity 80%.
In addition, 10 international long-haul routes due to resume in May and June have been delayed by at least a month.
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“We have no plans to close any hubs, in fact far from it," said Vasu Raja, senior vice-president of strategy at American, on the capacity cuts during the call. "The core of our customer proposition is to provide connectivity.”
When and by how much American restores its hubs remains to be seen. Its major connecting complexes at Charlotte (CLT) and Dallas/Fort Worth (DFW) remain in place through the summer, albeit with fewer flights than last year. Hubs at Chicago O'Hare (ORD), Philadelphia (PHL) and Phoenix (PHX) remain in place to a lesser degree depending on the day of week and where one is flying.
Coastal hubs in Los Angeles (LAX) and Washington Reagan National (DCA), as well as New York, have taken the largest short-term hits. American vice president of network planning Brian Znotins described them as "spoke-like" in a March interview.
"We’re just now starting a clean-sheet exercise of what 2021 will look like," said Raja when asked for color on the restoration of American's hubs.
Raja did not comment on whether Charlotte, Dallas/Fort Worth and Washington -- previously American's three "most profitable" hubs -- would come back before others.
Related: American retires 80 Airbus, Boeing and Embraer jets due to coronavirus pandemic
Few people are flying as COVID-19 continues to take its toll. The latest data from trade group Airlines for America (A4A) shows the average number of passengers on flights in the U.S. rose to 17 from fewer than 10 during the week ending April 28 -- a positive sign but still a dismal spot for the industry.
The immediate issue facing airlines is how to cut costs to line up with near-zero demand. In addition to slashing capacity, carriers are parking jets and offering staff voluntary early retirement and unpaid leave packages to par their workforces. Southwest Airlines has delayed the deliveries of some 75 Boeing 737 MAX jets due in the next two years to some time in the future.
Still many continue to bleed cash even as they slash expenses. American hopes to reduce its daily cash burn to just $50 million a day by June from around $70 million currently.
"We all expect the recovery will be slow and demand for air travel will be suppressed for quite some time," said American CEO Doug Parker on Thursday. "Difficult decisions lie ahead of all of us.”
Related: American delays Bangalore, Casablanca and many seasonal routes to 2021
Below is a list of the changes to American’s international route resumption plans:
Resuming on June 4, unless noted
- Chicago O'Hare - Athens and Dublin on June 5, and London Heathrow (unchanged)
- Dallas/Fort Worth - Amsterdam and Frankfurt (all unchanged)
- Miami - Buenos Aires, Santiago and São Paulo (all previously due to resume on May 7)
Resuming on July 7, all previously due on June 4
- Los Angeles - London Heathrow
- Miami - Rio de Janeiro
- New York JFK - Buenos Aires, London Heathrow and São Paulo
- Philadelphia - London Heathrow
- Raleigh/Durham - London Heathrow
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| 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. |
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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.