Categories
Airlines American

American Airlines will fly at full capacity — only 3 U.S. airlines have blocked the middle seat on domestic flights – MarketWatch

One new safety measure: more lines open at security

Travelers arrive for flights at a nearly-deserted O’Hare International Airport in Chicago, Illinois. The airport, which typically serves 8.2 million passengers a month, has significantly reduced air travel.


Getty Images

American Airlines
AAL,
-1.98%

has come under scrutiny for its decision not to block the middle seats on flights in the name of preventing coronavirus transmission — but many other airlines have taken this same stance.

The carrier announced last week that starting Wed., July 1, it would resume booking flights to full capacity.

Previously, the airline had said it would limit its flights to 85% capacity and block certain seats to ensure social distancing onboard its aircraft. Moving forward, passengers will be alerted if their flight is going to be crowded and be given the opportunity to switch flights free of charge.

Aside from American, other airlines that aren’t capping flight capacity or blocking seats include United
UAL,
-0.46%
,
Allegiant
ALGT,
-0.84%
,
Spirit
SAVE,
-0.39%

and Sun Country.

The move has drawn criticism from public-health experts. “We don’t think it’s the right message,” Robert Redfield, the director of the Centers for Disease Control and Prevention, testified during a Senate committee hearing on Tuesday. “It’s really important that individuals, whether [they’re in] a bus or a train or a plane, are social distancing to the degree that’s feasible.”

Delta is one of only a few U.S. airlines to block middle seats on its flights to promote more social distancing onboard aircraft during the coronavirus pandemic.


Getty Images

During that same hearing, Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, said the policy change at American “is something that is of concern.” Both Fauci and Redfield made the comments in response to a question from Sen. Bernie Sanders (I-Vt.), who asked why the government wasn’t working to stop “that type of activity.”

An American Airlines spokesperson said the company was “unwavering” in its commitment to safety. “We know our customers are placing their trust in us to make every aspect of their journey safe, and we are committed to doing just that,” the spokesperson said in an email.

“We have multiple layers of protection in place for those who fly with us, including required face coverings, enhanced cleaning procedures, and a pre-flight COVID-19 symptom checklist — and we’re providing additional flexibility for customers to change their travel plans, as well,” the spokesperson added.


Three other airlines made moves to reduce capacity: Alaska Airlines, Frontier Airlines and Southwest.

American Airlines is not alone in its stance. In fact, only three U.S.-based airlines — Delta
DAL,
-1.24%
,
Hawaiian
HA,
-1.92%

and JetBlue
JBLU,
-2.11%

— have blocked the middle seats completely on their domestic flights, reducing the capacity on their aircraft substantially.

Three other airlines have made moves to reduce capacity.

Alaska Airlines
ALK,
-1.54%

blocks “select” seats.

Frontier Airlines blocks 20 of its middle seats per flight to give customers the option to purchase a seat that will be more socially distanced. On one of the airline’s typical aircraft, one in five seats have a guaranteed empty middle seat next to them. “This is a confirmed measure we take on every flight — not a ‘we’ll make a best effort’ scenario,” Jennifer de la Cruz, Frontier’s director of corporate communications, told MarketWatch in an email.

Southwest Airlines
LUV,
-1.08%

has committed that none of its flights will be booked more than two-thirds full through Sept. 30. Southwest does not assign seats, though, so middle seats remain open, but passengers are encouraged to socially distance as much as possible when they board.

But experts have also questioned the efficacy of social distancing on planes as an approach to curb the transmission of the virus that causes COVID-19 on airplanes. To reduce the probability of exposure to a very low level, “you would need to make the seating density so low that it would be impractical to operate an aircraft economically,” Byron Jones, an engineer and professor at Kansas State University, told lawmakers during a hearing last week before the House of Representatives Subcommittee on Space and Aeronautics.

Read More

Categories
Airlines American

American Airlines Is Planning $1.5 Billion Stock, Convertible Sale – Bloomberg

Need help? Contact us

We’ve detected unusual activity from your computer network

To continue, please click the box below to let us know you’re not a robot.

Why did this happen?

Please make sure your browser supports JavaScript and cookies and that you are not blocking them from loading. For more information you can review our Terms of Service and Cookie Policy.

Need Help?

For inquiries related to this message please contact our support team and provide the reference ID below.

Block reference ID:

Read More

Categories
Airlines American

American Airlines outlines severance packages for high-level employees – CNBC

An airline employee walks past empty American Airlines check-in terminals at Ronald Reagan Washington National Airport in Arlington, Virginia, on May 12, 2020.

ANDREW CABALLERO-REYNOLDS

American Airlines has recently detailed severance packages for high-level employees if they are laid off when the terms of federal aid expire in the fall, people familiar with the matter said.

The severance packages for upper management include around nine months of pay and a little over two years of health-care coverage for at least some of the employees at the director level and above, one of the people said. 

The packages come as American and other airlines are preparing to shrink and offer employees voluntary separation options as the coronavirus pandemic continues to hurt demand. The virus and measures to stop it have pushed airlines including Delta, United and American to their first quarterly losses in years.

American declined to comment.

The terms of $25 billion in federal coronavirus relief set aside for U.S. airline payroll prohibit carriers that accepted the aid from laying off or cutting the pay rates of employees through Sept. 30. Airline executives have warned they expect they will have to shrink to compensate for weak travel demand. 

American late last month said it aims to reduce management and support staff by about 30% or around 5,000 jobs, starting with voluntary measures like buyouts. United also aims to reduce the ranks of its management and administrative employees by 30%, or around 3,400 people, it said last month. United, Southwest and Delta have offered voluntary separation packages for other work groups, such as flight attendants and customer service workers. 

Delta executives are discussing what voluntary separation packages could look like for senior management, according to a person familiar with the matter. Delta didn’t provide details on the voluntary senior management packages, or what involuntary severance packages might include. Southwest and United didn’t respond to a request for comment on Sunday.

In late May, American offered management and support staff buyouts and retirement packages, an effort to get employees off the payroll and avoid involuntary layoffs. Buyout options include a third of pay and full medical coverage through Dec. 31, along with five years of travel benefits. The airline told management and support staff that if they are laid off involuntarily later they will not receive severance. However, under the federal aid terms they will be paid through Sept. 30.

“If there are not enough early out volunteers, we will have to take the difficult step of involuntary separations,” said Elise Eberwein, American’s executive vice president of people and global engagement, in a May 27 staff note, outlining those options. She added that the cuts will be communicated to employees in July and that those employees would get a year of travel benefits and access to COBRA health coverage for 18 months. The deadline to volunteer for the buyouts and early retirements is Wednesday.

The high-level employees, a group that recently took pay cuts, and might receive the severance packages if they are involuntarily cut, could face more difficulty finding work at their level than other employees, said Tom McMullen, senior client partner at organizational consulting firm Korn Ferry. 

Severance packages “tend to ramp up for executives,” McMullen said. “Executives don’t find a new job in a month. They might find a job in a year.”

He added it will likely be challenging for laid off airline employees compared with those in a single ailing company because the “sector is fighting for its life.”

Read More

Categories
Airlines United

United Airlines announces executive cuts, part of 30% reduction in management, support staff – USA TODAY

, USA TODAY
Published 2:39 p.m. ET May 30, 2020

CLOSE

United Airlines will cut 13 of its 67 senior-executive positions, the company said Friday.

Eight of its executives will leave Oct. 1 and five openings will not be filled. 

The moves are part of United’s plan to cut management and support staff by at least 30% in October, the earliest it can do so under terms of $5 billion in federal aid it is getting to help cover payroll cost, according to the Associated Press.

United Airlines President Scott Kirby has issued bleak outlook after bleak outlook since the coronavirus crisis began hitting U.S. airlines in late February, noting each time that he was laying out a worst-case scenario.

The bleakest arrived this month during the airline’s quarterly earnings conference call.

Kirby said travel demand is essentially “zero,” and the airline is bracing for that to be the case for the rest of the year and into 2021. United has 93,000 employees.

And United isn’t the only airline to announce cuts to its administrative staff.

Airlines have suffered major losses since travel screeched to a near halt as the coronavirus pandemic spread across the globe, infecting nearly 6 million people and killing more than 366,000, according to Johns Hopkins data. Airlines executives say it could take years for air travel to recover.

American Airlines also made the call to cut its management and support staff by about 30%, according to an internal letter from Elise Eberwein, executive vice president of people and communication, obtained by USA TODAY.

Though the company’s pre-pandemic liquidity, assistance from the government bailout and cash raised provide some stability, the American Airlines letter said the company needs to make cuts where its “most significant expense” occurs: in compensation and benefits.

The airline’s management and support staff include about 17,000 people, American Airlines spokesperson Ross Feinstein told USA TODAY.

Is your airport on the list?: Cities push back as airlines seek dozens of new service cuts

Contributing: Dawn Gilbertson, USA TODAY; The Associated Press

Autoplay

Show Thumbnails

Show Captions

Read or Share this story: https://www.usatoday.com/story/travel/airline-news/2020/05/30/united-airlines-layoffs-senior-executive-cuts-announc

Read More

Categories
Airlines American

American Airlines says to cut management and support staff by 30% – Fox Business

Get all the latest news on coronavirus and more delivered daily to your inbox.  Sign up here.

American Airlines Group Inc must reduce its management and support staff by about 30% and may have to cut frontline employees as it downsizes due to the coronavirus outbreak, showed a letter to employees made public on Wednesday.

All major U.S. airlines have said they will need to shrink in the fall, once U.S. government payroll aid that bans involuntary job cuts expires on Sept. 30.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Competitor United Airlines Holdings Inc has also said it will need to reduce its management and administrative staff by about 30%.

Despite the bailout and other liquidity raises, American must “plan for operating a smaller airline for the foreseeable future,” Executive Vice President of People and Global Engagement Elise Eberwein said in the letter.

American, with over 100,000 employees, will offer voluntary options before implementing involuntary reductions if there is not enough take-up, she said.

AMERICAN AIRLINES’ LATEST CORONAVIRUS TRAVEL MEASURES INCLUDE THESE PERKS

Once it has reduced its management ranks, the company will turn to frontline employees including flight attendants and pilots, who will receive fresh voluntary leave and early retirement options in June with the aim of avoiding involuntary furloughs.

“This is a goal, though, not a commitment, and a stretch goal at that,” Eberwein said, adding the company will be working with unions in coming weeks and months.

CORONAVIRUS PUSHES BERKSHIRE TO SELL ENTIRE STAKES IN US AIRLINES: BUFFETT

American has said it is accelerating fleet retirement and expects to fly roughly 100 fewer aircraft in the summer of 2021. Nearly 40,000 employees have already opted for temporary voluntary leave or early retirement.

CLICK HERE TO READ MORE ON FOX BUSINESS

Earlier, American Chief Executive Doug Parker said the airline hoped to avoid furloughs and rejected speculation that it or another major U.S. carrier will have to file for Chapter 11 bankruptcy protection due to the coronavirus crisis.

(Reporting by Tracy Rucinski; Editing by Himani Sarkar and Christopher Cushing)

Read More

Categories
Airlines Southwest

Southwest Airlines Will Fly Again – Motley Fool

Why it’s a matter of when, not if, the airline industry rebounds.

Neil Patel

A history of bankruptcies in the airline industry has usually kept quality-focused investors away. It’s no surprise that the capital-intensive, cyclical nature of the business lends itself to wild swings in stock prices during unexpected economic shocks. Southwest Airlines (NYSE:LUV), currently the most valuable U.S. carrier by market capitalization, has seen its stock fall 49% during the last three months as the coronavirus pandemic has essentially halted passenger air travel worldwide.

According to the TSA, air travel demand was down 92% in the first 18 days of May compared to the same time period last year. This broad-based drop has caused Southwest to post a $94 million loss in the quarter ended March 31st, the company’s first quarterly loss since Q3 2011. The uncertainty of when things will return to any level of normalcy is seriously jeopardizing Southwest’s impressive streak of annual profitability, which reached 47 consecutive years last year. Fiscal year 2020 could very well be the end of that. To make matters worse, CEO Gary Kelly warned of the possibility of “a dramatically smaller airline” if things do not improve. Southwest has never laid off an employee in its entire history. These are truly unprecedented times.

Airplane flying over cloud cover.

Image Source: Getty Images

Government support

In March, the federal government passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to save the struggling economy. As part of this package, the U.S. airline industry was authorized to receive $25 billion in grants and $25 billion in loans and loan guarantees. Time will tell if the seemingly astronomical dollar amounts will help smooth the recovery. Delta Air Lines (NYSE:DAL) CEO Ed Bastian thinks it will be two or three years until business gets back to pre-coronavirus levels.

During adverse economic scenarios like the one we are currently facing, the issue that always presents itself is whether or not certain industries and companies deserve any government assistance. Known for having massive fixed costs and needing continuous reinvestment to grow, the airline business was characterized best when Warren Buffett once called it a “disaster for capital.” Although an investor in airlines since 2016, the Oracle of Omaha has since reversed course after exiting his entire positions in Southwest, Delta, American Airlines (NASDAQ:AAL), and United Airlines (NASDAQ:UAL).

As long-term investors, we are focused on owning those rare high-quality businesses. But high-quality can mean something different for everyone. In my view, it’s a company that can not only survive tough economic circumstances, but that can actually thrive and come out stronger on the other side. Therefore, it was really a head-scratcher to see Buffett buy airline stocks after years of disowning the industry. Sure, in good times everyone is happy and returns can be favorable. It’s times like now that force astute analysts to reassess their investment philosophies and redefine what quality means to them.

Fasten your seatbelt

After the horrific September 11th, 2001 terrorist attacks, it was unfathomable to think that air travel would ever get back to the way it was before. It wasn’t until 2004 that U.S. passenger miles had surpassed levels reached in 2000. As this article suggests, the airline industry will certainly bounce back. It may not even happen when a successful vaccine for the coronavirus is created, but it will happen eventually. As unattractive as they may be from an investing perspective, airlines have done a wonderful job at bringing the world closer together. I have no doubt that this will be the case again.

On Tuesday, Southwest said that new bookings are beginning to outpace cancellations, which could signal a turning point for the company and industry. Reduced capacity, significantly lowered revenue forecasts, and an unknown resolution to the current situation will lead to a turbulent ride for the stock, regardless of how enticing the valuation looks today. Southwest Airlines has had a stellar operating history, but there’s just too much uncertainty in the near-term to add the stock to your portfolio.


Neil Patel has no position in any of the stocks mentioned. The Motley Fool recommends Delta Air Lines and Southwest Airlines. The Motley Fool has a disclosure policy.

“>

Read More

Categories
Airlines Airports

U.K. Airlines, Airports Fear ‘Devastating Impact’ Of Possible Quarantine Rules – NPR

A British Airways plane sits parked behind a fence last month at London’s Heathrow Airport. An association of major British airlines expects the U.K. government to roll out quarantine restrictions to combat the coronavirus, though confirmed details remain unclear.

Ben Stansall/AFP via Getty Images


hide caption

toggle caption

Ben Stansall/AFP via Getty Images

A British Airways plane sits parked behind a fence last month at London’s Heathrow Airport. An association of major British airlines expects the U.K. government to roll out quarantine restrictions to combat the coronavirus, though confirmed details remain unclear.

Ben Stansall/AFP via Getty Images

Airlines and airport operators in the United Kingdom are not waiting for the government to publicly confirm their fears. Already, the groups representing major players in the U.K.’s air travel industry are pushing back on a proposal that would require travelers to quarantine after arriving from outside the country.

A spokesperson for Airlines UK — a trade body with British Airways, easyJet and Ryanair as members — says that the group understands from government officials that plans for a quarantine are in the works, but that details remain scarce at the moment.

“We need to see the detail of what they are proposing. Public health must of course be the priority and we will continue to be guided by Sage advice,” the group said in a statement emailed to NPR, noting that support measures will be necessary to ensure “that we still have a UK aviation sector once the quarantine period is lifted.”

“We will be asking for assurances that this decision has been led by the science and that Government has a credible exit plan, with weekly reviews to ensure the restrictions are working and still required.”

The prime minister’s office declined to comment, suggesting that details about the situation will be addressed in Boris Johnson’s speech Sunday evening. In his address, Johnson is expected to lay out a road map for the U.K.’s continued coronavirus response, which to this point has included weeks of broad lockdown measures nationwide.

The U.K. has suffered Europe’s highest death toll linked to COVID-19, with upwards of 31,600 confirmed patients dead, according to data compiled by Johns Hopkins University. Only the United States has reported a higher death toll worldwide.

The Times in London reports that under the new restrictions, travelers entering the U.K. — including citizens — would need to self-isolate for 14 days, with fines threatened for violators. The Airport Operators Association says it has received no word from officials regarding the possible quarantine — though the group’s chief executive, Karen Dee, pushed back strongly on the idea in a statement sent to NPR.

“Quarantine would not only have a devastating impact on the UK aviation industry, but also on the wider economy. Aviation is an enabler for many other industries, such as manufacturers, tourism and the hospitality industry,” she said, adding that airports in the country “cannot survive a further protracted period without passengers that would be the result of quarantine measures.”

“If quarantine is a necessary tool for fighting COVID-19,” she said, “then the Government should act decisively to protect the hundreds of thousands of airport-related and travel-related jobs across the UK.”

Read More