This week’s featured link
American Air CEO Says Bankruptcy Is an Option He Won’t Consider – Bloomberg
We have three related links this week. First, a recap of what American CEO Doug Parker said at an investment conference this week. (United CEO Scott Kirby seems to think the same thing.) I would agree that filing for bankruptcy protection is a failure, especially if you’re the first one to do it, but where we diverge is on the idea that nobody will be forced to file for bankruptcy this time around. That’s an optimistic view that can’t be backed up with facts as currently known. It’s the traveling public that will determine if bankruptcy needs to happen or not. American has a lot of debt, but it has a lot of liquidity as well. If travel comes back sooner than later, American will be ok. If not, then it won’t.
Two for the road
Letter to Employees on Job Cuts – American Airlines
American has frequently used a less urgent tone when talking about this crisis, but its actions are now suggesting something different. There will be a loss of 30 percent of employees in the management and support staff ranks either through volunteering or layoffs. That is a very steep cut, but it’s good to see American lead with management. Still, the difference between actions and tone is… strange.
Letter to Employees on Early Out Packages – Delta Air Lines
Delta is focusing on getting volunteers for its draw down but leaving the future more nebulous.