By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Travel Radar - Aviation NewsTravel Radar - Aviation News
  • Breaking News
  • Aviation
    • Aircraft
    • Airlines
    • Airshow & Events
    • Careers
    • Manufacturing
  • Travel
    • Airports
    • Points & Loyalty
    • Technology
    • Trip Reviews
  • Newsletters
Reading: Can American Airlines Weather the Storm?
Share
Sign In
Notification Show More
Font ResizerAa
Font ResizerAa
Travel Radar - Aviation NewsTravel Radar - Aviation News
  • Breaking News
  • Aviation
    • Aircraft
    • Airlines
    • Airshow & Events
    • Careers
    • Manufacturing
  • Travel
    • Airports
    • Points & Loyalty
    • Technology
    • Trip Reviews
  • Newsletters
Signin Sign In
Follow US
Copyright © Travel Radar Media Ltd. 2024 | All Rights Reserved
Travel Radar - Aviation News > News > Can American Airlines Weather the Storm?

Can American Airlines Weather the Storm?

Travel Radar
Last updated: 17 March 2020 15:10
By Travel Radar Staff 3 Min Read
Share
Can AA Weather the storm? © Flickr Commons
Can AA Weather the storm? © Flickr Commons
SHARE

According to Forbes magazine as at January this year, American Airlines (AA) was the second biggest in the world* second only to Delta. And yet it seems that it may be especially vulnerable to the effects of the coronavirus on commercial carriers. Why is that?

In 2011 the airline filed for bankruptcy, with very high debt (of almost $30 billion) and continual labour disputes. Now it has greater than $34 billion indebtedness, far more than its main US competitors: United has $20b and Delta $17b.

Rather than paying off some of its debt mountain, it bought back shares from the market. The markets have little confidence in AA, its stock price today is 15,14, having lost about 50% of its value in a month. To be sure, Delta is also suffering, having lost 40%, but the bulk of that can be attributed to the epidemic.

© Flickr Commons

Labour costs on average amount to about 35% of total operating expenses of many airlines and AA is more heavily unionised than its competitors. The unions will find it hard to sympathise with management at AA.

Amongst the nine major US airlines, AA ranks at the bottom of passenger satisfaction. Measures include on-time arrivals, mishandled baggage and cancelled flights. It seems that if there’s a reasonable alternative, the flying public isn’t going to have much sympathy with American either.

On Monday AA announced that it would cut 75% of its international flights, after earlier suspending services to China, Italy, and Seoul whilst reducing frequency to Tokyo. The operator will only continue with three long-haul routes: Dallas to London-Heathrow, Miami-Heathrow and Dallas-Tokyo. It will continue short international flights in the region, Mexico, Canada and so forth. Its mainstay–the US domestic market–will also be trimmed; by up to 30% in May.

Of course, AA isn’t alone; almost all major airlines and many smaller ones have cut schedules drastically, as much as 90% and yet others are effectively grounded. It’s simple and obvious to take those steps, although gruelling for all involved.

Yesterday the representative body for airlines in the US, (‘Airlines for America’) which includes AA, announced that it would seek $50 billion in federal aid; much more than the $15 billion sought after the terror attacks in 2001.

No commercial enterprise can be expected to make allowance for crises of the magnitude of the coronavirus, and it’s reasonable for companies to appeal to the central government for relief in these cases. For governments, it then becomes a case of triage; who’s worth saving?

In the coming months, it may not be American Airlines.

*measured by revenue, profit and value of assets. Emirates ranks 7th by revenue.

You Might Also Like

Data breach affecting its customers of Air France-KLM

Aviator: The Flight-Inspired Game Taking Off in the Online World

Digital IPC Eligible for Passengers Inbound to Sydney

AvNav Reveals Upgrades at EAA AirVenture Oshkosh 2025

5 Italian Airports allows Liquid over 100ml in hand-carry

Share This Article
Facebook Twitter Email Copy Link
What’s your thoughts?
Love1
Sad0
Happy0
Angry0
Travel Radar
By Travel Radar Staff
Follow:
Articles from guest contributors wishing to remain anonymous are credited to this account. Want to contribute to Travel Radar either in-name, or anonymously? Get in touch: [email protected]
Previous Article Virgin A350-1000 ©flights.com.kw Virgin Atlantic Asks Staff to Take Unpaid Leave
Next Article All images ©Wikimedia Commons SA Express Suspends Operations
6 Comments
Subscribe
Login
Notify of
guest
guest
6 Comments
Oldest
Newest Upvoted
Inline Feedbacks
View all comments

Stay Connected

FacebookLike
TwitterFollow
InstagramFollow
YoutubeSubscribe

Trending News

ba
A British Airways Trip to Bucharest
Airlines Airports Travel
A Cathay Pacific A330 aircraft.
Cathay Pacific Orders More Boeing 777-9 for Fleet Renewal
Aircraft Airlines Aviation
Passenger traffic at Heathrow Airport
Myth vs. Fact: Airport Rules that Confuses up to 90% of Brits
Airports Careers Did You Know
Aer Lingus introduces new mobile update
Aer Lingus’ Major Mobile Update for Travellers
Aviation Points & Loyalty Technology
Klyuchevskoy volcano prior to eruption
Klyuchevskoy Volcano Eruption Prompts Red Aviation Alert
Breaking News Incidents & Accidents Route Development Travel
//

Travel Radar is the leading digital hub for all things aviation and air-travel. Discover our latest aviation news, aviation data, insight and analysis.

Discover

  • About Us
  • Contact Us
  • Careers
  • Press & PR
  • Privacy & Legal

Our Content

  • News
  • Data
  • Images
  • Jobs
  • Subscribe

Signup to our Newsletter!

And get the latest aviation news via our weekly news digest!

© Travel Radar Media Ltd. 2015-2025 | ISSN #2635-0696 | Trademark #UK00003579704
wpDiscuz
adbanner
AdBlock Detected
Ads help us bring you high-quality, independent journalism for free. Support us by whitelisting us from your ad blocker.
Okay, I'll Whitelist
Welcome to the TR Community!

Sign in to your account

Register Lost your password?