Regional carrier Compass to close doors in April with loss of American Airlines flying
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
Compass Airlines will close it doors in April when American Airlines cuts the majority of its contract flying amid sweeping coronavirus-related capacity reductions.
The shut down was relayed by Rick Leach, CEO of Compass-owner Trans States Holdings, in a memo to employees on Thursday viewed by TPG. Compass is the second Trans States-owned carrier to close it doors due to the crisis with Trans States Airlines ceasing operations on April 1.
“All our remaining capacity will be completely cut for an undetermined period and our other, once viable, prospective opportunities have been tabled for the foreseeable future due to the sweeping impact of this crisis,” said Leach. “These challenges… have forced us to make the incredibly difficult decision to pull down the Compass operation.”
Trans States remaining operating subsidiary, GoJet Airlines, as yet appears unimpacted by the crisis. GoJet flies Bombardier CRJ550s for United Airlines.
The 20 Embraer E175s that Compass flies for American will either be returned to lessors or shifted to other airlines, Leach said in the memo without providing details.
As previously planned, Compass will end flying E175s for Delta Air Lines at the end of March.
Trans States’ decision to shut down both its namesake carrier and Compass comes as the airline industry faces a cash crunch. Demand for air travel has plummeted amid the spread of COVID-19, forcing nearly every carrier to slash schedules and stop spending cash in order to preserve the company.
U.S. airlines are seeking more than $50 billion in government aid to get them through the crisis. However, International Air Transport Association (IATA) director general Alexandre de Juniac has warned that it will not be enough to save every carrier.
“It is clear that we will see… probably consolidation, [and] unfortunately some airlines will be disappearing,” he said Tuesday.
Other independent regional carriers are undoubtedly under pressure from the fall in demand and the related cuts being made by their mainline affiliates. Analysts have named Phoenix-based Mesa Airlines, which flies Bombardier CRJ900s and E175s for American and United Airlines, as another at risk airline.
Regional affiliates owned by their mainline partners likely face fewer risks. Alaska Airlines owns Horizon Air; American owns Envoy, Piedmont Airlines and PSA Airlines; Delta owns Endeavor Air; and United has stakes in CommutAir and ExpressJet Airlines. In addition, American and United both have minority stakes in Republic Airways.
American, Delta and United have all slashed schedules. American said Sunday that it will cut domestic flying by up to 30%, though further cuts are expected; Delta is essentially winding itself down with a 70% system capacity cut; and United is reducing capacity by 60%.
Compass was not immediately available for comment on the memo.
Featured image by Fabrizio Gandolfo/SOPA Images/LightRocket via Getty Images.
Welcome to The Points Guy!
WELCOME OFFER: 60,000 Points
TPG'S BONUS VALUATION*: $1,200
CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
- Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
- 2X points on travel and dining at restaurants worldwide, eligible delivery services, takeout and dining out & 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for travel through Chase Ultimate Rewards®. For example, 60,000 points are worth $750 toward travel.
- With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Earn 2x total points on up to $1,000 in grocery store purchases per month from November 1, 2020 to April 30, 2021. Includes eligible pick-up and delivery services.