American Airlines Says Demand Improving But Plans 30% Cut in Administrative Staff Strength

The biggest US carrier, American Airlines, has sought to downplay the talk of initiating proceedings of bankruptcy under Chapter 11. On the contrary, the airline has recently told media that the demand is slightly improving. It must be mentioned that the airline has seen the revenues dip by 90% in the past few months during the lock down period. Nearly 40% of its employees have sought early retirement, temporary leaves and reduction in work. However, the airline is still planning to cut down the strength of its administrative staff as the operations are expected to be low key in the next few months are the bailout package date is over. Another reason for this is that the overall demand of air travel in USA is expected to shrink by at least 10% in summer of 2021.

On the brighter side, the American Airlines reservations have risen more than the demand for cancellations in the past 2 to 2.5 weeks. This gives hope to the airline. Even though the airline is currently operating at 20% of its capacity, this indicates that passengers are willing to do American Airlines booking once again. The optimism is not unfounded even though many states require passengers to go for a 14-day quarantine period. There is, however, an element caution to be exercised here as the airline is not likely to ply more planes on routes till significant improvement is seen over a reasonable time frame.

Now, the question is what is required to be done to keep this demand on improvement curve? As per the recent expert suggestions, there will be a demand for face coverings and deep cleaning. Face coverings is a requirement for passengers, frontline employees and crew members on most of the airlines. However, if any passenger comes to airport and boards the plane without mask, what shall the airline do? Will it decline it a seat? Will it offer a mask from its stock? Will it be considered an offence and action be taken for non-compliance? The airlines have adopted a rather soft stand on taking action against violators who do not wear face coverings.