American, Delta say demand uptick helping cash burn; United requiring health checklists

American, Delta say demand uptick helping cash burn; United requiring health checklists

FILE PHOTO: Rows of empty seats of an American Airline flight are seen, as coronavirus disease (COV
FILE PHOTO: Rows of empty seats of an American Airline flight are seen, as coronavirus disease (COVID-19) disruption continues across the global industry, during a flight between Washington D.C. and Miami, in Washington, U.S., March 18, 2020. REUTERS/Carlos Barria/File Photo

WASHINGTON/CHICAGO: American Airlines Group Inc and Delta Air Lines Inc said on Wednesday (Jun 10) that a modest recovery in demand was helping to slow daily cash burn rates in June after the US government reported record low passenger numbers in April amid the coronavirus pandemic.

US airlines carried 3 million passengers in April, a staggering 96per cent decline from April 2019, the Transportation Department said on Wednesday. 

Total US airline passengers were the lowest since 1974 when the government began collecting monthly data. By comparison, there were 76.1 million total US airline passengers in April 2019.

US airlines have grounded nearly half of all airplanes, canceled hundreds of thousands of flights and the industry is still burning through billions a dollars a month. But many airlines are adding back flights in July as demand modestly rebounds.

Speaking to shareholders at the company's annual meeting, American Airlines Chief Executive Doug Parker said while passenger numbers are improving, they are "still a fraction of what they were last year and particularly internationally."

That makes it difficult to know how many flights it will operate in the fall, when US payroll aid for airlines runs out, and in the summer of 2021.

Still, American and Delta each said their daily cash burn rate was expected to slow to about US$40 million in June. American had previously forecast a US$50 million-per-day cash burn.

Delta forecast a 90 per cent plunge in second-quarter revenue and warned it would need to renegotiate its debt agreements to avoid a default next year.

To restore confidence in flying, United Airlines said on Wednesday it is now requiring all passengers to complete a health self-assessment during their check-in process, based on recommendations from the Cleveland Clinic.

Chicago-based United's "Ready-to-Fly" checklist will ask passengers to confirm they have not experienced COVID-19-related symptoms in the 14 days prior to flying and to agree to wearing a face covering.

The Transportation Department said U.S. airlines carried about 2.8 million domestic passengers and 132,000 international passengers in April. International passengers fell 99per cent over April 2019 as the United States imposed flight restrictions on many international visitors.

Passenger traffic has recently risen from April lows and fell only 85 per cent in the week ending Jun 7, while total flights are down 72 per cent.

Airlines for America, an industry trade group, said demand for future air travel remains down 82 per cent and revenue for future flights is down 92 per cent.

Source: Reuters

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