One Crisis, All Air Carriers: Inside American Airlines
On Monday morning, American Airlines Flight 1 departed John F. Kennedy Airport in New York City, bound for Los Angeles. It had six passengers. The flight is normally one of the airline’s busiest and most profitable. Now it is a money pit, a cross-country symbol of how thoroughly the coronavirus pandemic has decimated commercial air travel in a matter of weeks.
Above - Patrick T. Fallon/Bloomberg
Never before has customer demand dropped so swiftly and never before has it been less clear when — or even if — the global airline industry will truly recover.
“This is scary,” said José Freig, American’s head of Latin America operations, who is now managing the company’s coronavirus response team. “It’s difficult to find a bottom on this one.”
In recent weeks, nearly every part of the airline, the largest in the United States, has been transformed by efforts to slow the spread of the virus. American is cancelling about 40% of its flights each day and expects more cutbacks in the days ahead as demand slides further. Those that are flying are mostly empty, with just a few people aboard, costing the company many thousands of dollars with each trip. With the exception of a few flights to Mexico and a few islands in the Caribbean, American has ceased most of its international routes. The company’s stock had fallen 66% since mid-February, before rebounding Tuesday.
“It’s very uncertain times,” said Dennis Tajer, an American Airlines pilot and a spokesman for the union representing pilots. “The flights are getting cancelled left and right.”
The company’s leaders are scrambling to keep the airline afloat. The chief executive, Doug Parker, spent last week in Washington, working with other airline CEOs to lobby the White House and Congress for a multi-billion-dollar bailout, the details of which could be announced soon. American said last week that it had secured $1 billion in financing and had a total of $8.4 billion in available liquidity. The company’s finance team is working with bankers to assess what other financing might be available. “We need help,” said Erik Olund, who oversees many of the airline’s maintenance facilities. Yet even with a bailout on the horizon, executives at American are deeply uncertain about the company’s future.
“There’s never been anything like this,” said Julie Rath, who oversees customer experience for the airline. “It’s not going to come back in the next couple months.”
Left - Tom Pennington/Getty Images
The company is trying to save cash any way it can. It has shut off coffee and water service in its break rooms. It has offered voluntary leave programs to employees. It has even changed the way it repairs planes: Instead of buying new parts when they are needed, it is cannibalising them from some of its hundreds of planes that are parked. And it is looking for new sources of revenue. Last week, American started running passenger-free flights loaded with cargo for the first time in 36 years. It is ferrying medical supplies, mail for active U.S. military troops, telecommunications equipment and electronics between Dallas and Frankfurt, Germany. “The world is in such a state, we’re in such a state,” said Rick Elieson, the airline’s president overseeing cargo and vice president for international operations. “It’s worth trying and figuring out.”
At American’s Dallas headquarters and at offices around the country, the company has instituted temperature checkpoints for people coming into the office. Those running a fever are not permitted inside. When customers make reservations, middle seats are being blocked to promote social distancing. Inside airports, kiosks and counters are disinfected regularly. Planes are being fogged with a special solution of chemicals meant to kill the coronavirus. Passengers can now scan their own boarding pass when getting on a plane, rather than handing it back and forth with a gate agent. Many airport lounges, including those in New York, Chicago, Miami and Dallas, are closed, with more expected to be shuttered in the coming days. In those still open, buffets have been replaced by prepackaged snacks and there is no more free alcohol. In first class, there are no more hot towels or hot nuts. Glass Champagne flutes have been replaced with plastic cups. Flight attendants can wear masks and gloves as they walk the aisles. On shorter flights, there is no more beverage service or food for sale.
“Sixty-eight days ago it was about being present and visible in the aisle and having a high number of customer touch points,” said Brady Byrnes, managing director of flight service. “Now we’re faced with social distancing and limiting customer touch points.”
Executives at American had been monitoring the coronavirus since January, when it began to disrupt travel in China and then other parts of Asia. The company’s pilots were among the first to take the outbreak seriously, suing American on Jan. 30 in an effort to stop flights into mainland China and Hong Kong. Even then, executives believed the outbreak would blow over. “Most of us thought that this would be isolated to China,” Olund said. “We thought this was just a blip.”
American had a pandemic plan and believed it was prepared to handle another health crisis, having dealt with Ebola, H1N1 and severe flu outbreaks in the past.
Then during a conference call Feb. 25, Richard Muise, the airline’s head of European operations, delivered a dire warning: People were getting sick in Italy, and fast. The government was moving to quarantine parts of the region around Milan.
“That’s when the alarm bell rang,” said Freig, now the manager of the coronavirus response team.
Just over a week later, the World Health Organization’s recommendation of sweeping travel restrictions began to effectively shut down much of commercial air traffic across Europe.
“Before that, things were changing every few days,” Freig said. “After that, things were changing by the hour, if not by the minute.”
It soon became clear that the company’s pandemic plan was inadequate.
“It was for everything that we had gone through, but nothing like this,” Freig said.
On March 11, President Donald Trump said he was halting commercial air travel between the United States and continental Europe. The next day, American’s call centres, already overwhelmed, experienced their highest ever volume — some five times the normal rate.
To handle the influx of calls from customers seeking to change their reservations, American reassigned workers from its airport lounges and gates, who are already familiar with the rebooking process, to handle the requests. In a matter of days, thousands of flights were canceled. Suddenly, the airline needed to park hundreds of planes simultaneously.
“Never have we had to ground the fleet at such a pace,” Olund said.
Around the country, American is parking its fleet as fast as it can — there will be 100 planes in Tulsa, Oklahoma; 100 planes in Roswell, New Mexico; 50 planes in Pittsburgh; more in Mobile, Alabama, and Greensboro, North Carolina. On Thursday, one plane after the next was landing at an American Airlines facility in Tulsa. When a captain walked off a Boeing 777 he had ferried from Miami, he paused on the tarmac and asked the ground crew to take his picture in front of it. The crew initially resisted, telling him that there wasn’t time. More planes were landing. The captain insisted.
“I’m a year away from retirement,” he said. “I think this is going to be my last flight.”
The parked planes need to be serviced daily by a team of 10 people. Every day, each plane needs to have its engine run, has to taxi far enough for the tires to rotate fully, and has to have its hydraulics, avionics and electronics checked. Even then, there are new precautions. The crews who service those planes used to be briefed in groups of 100 at a time. Now, American has staggered the shifts and is conducting 10 briefings of 10 crew members at a time. And with airlines expecting a slow recovery, many of the older planes American is parking right now, such as its fleet of Boeing 767s, will most likely never be used again.
Left - Mary Altaffer/AP
So far, American has avoided layoffs or furloughs. It has offered employees voluntary leave packages that allow them to keep medical and dental benefits, and in some cases a percentage of their salary.
It has been only weeks, however, and the uncertainty is gnawing at the company’s 130,000 employees. The airline is hemorrhaging cash and there is no recovery in sight.
“We’re seeing a lot of people nervous,” Olund said. “That they’re going to get fired, that they’re going to have a cut in pay, that they’re going to have a hard time taking care of their families.”
In an effort to stave off bankruptcy, Olund has tried to enlist his employees in the company’s lobbying effort.
“We’ve been telling them to get their congressmen on the phone,” he said. “Tell them this is the time for help.”
© David Gelles/The New York Times Company