American Airlines CEO quells US bankruptcy talk, says demand improving

American Airlines CEO quells US bankruptcy talk, says demand improving

American Airlines Group Inc's is not considering a Chapter 11 bankruptcy filing, Chief Executive Doug Parker said at a conference on Wednesday, and shot down speculation that a major U.S. carrier could disappear due to the coronavirus pandemic.

FILE PHOTO: FILE PHOTO: American Airline CEO Doug Parker
FILE PHOTO: CEO of American Airlines Doug Parker at a golf tournament in Pebble Beach, California February 11, 2016. REUTERS/Michael Fiala/File Photo

REUTERS: American Airlines Group Inc is not considering a Chapter 11 bankruptcy filing, Chief Executive Doug Parker said on Wednesday and dismissed speculation that a major U.S. carrier could disappear due to the coronavirus pandemic.

"Bankruptcy is failure. We're not going to do that," Parker told a conference, adding: "I don't think you'll see any airline go by the wayside as a result of this crisis."

Shares in American rose 5.5per cent in late trading.

The U.S. airline industry is expected to be 10per cent to 20per cent smaller in the summer of 2021, Parker said, and its recovery would depend on how passenger demand and revenues evolve.

Earlier this month, Boeing Co Chief Executive Dave Calhoun told NBC he thought that a major U.S. carrier could go out of business in the fall, when government payroll aid for airlines will expire.

U.S. airlines, suffering an unprecedented downturn in air travel because of the pandemic, have warned they may need to eliminate jobs after Oct. 1 but Parker said the company aimed to avoid furloughs.

Nearly 40,000 of its more than 100,000 employees have opted for an early retirement, reduced work schedule or temporary leaves, he said.

American's revenues are down by about 90per cent due to the outbreak, but demand is improving and net receipts have been in positive territory for the past 2-1/2 weeks after a period when airlines were receiving more cancellations than new bookings.

"More and more people are feeling more comfortable today, but we need to get to a point where all Americans are as comfortable flying as they should be," he said.

American's planes were about 56per cent full over the long U.S. Memorial Day weekend, albeit in drastically reduced capacity, he said. American is flying about 20per cent of its normal schedule.

(Reporting by Tracy Rucinski; Editing by Bernadette Baum and Howard Goller)

Source: Reuters

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