American Airlines CEO: ‘We're prepared to handle a shock like this’

US airlines merged and restructured to be able to withstand an extraneous shock such as COVID-19, Doug Parker says.

Over recent years American Airlines CEO Doug Parker (pictured) has been the foremost proponent of the notion that the US airline industry has learned from its past mistakes. He views the COVID-19 coronavirus outbreak as the test the industry needs to pass to prove that US airlines are able and willing to withstand shocks.

Routes can be dropped and picked up again later with little financial damage, which was not the case when US airlines faced previous crises, Parker said.

“The US airline industry will manage through this,” Parker told the J.P. Morgan Industrials Conference on March 10.

“We have every intention of operating a robust capacity in 2021. American is prepared to handle a shock like this.”

American has cut its summer capacity by 10% and will “accelerate” the retirement of older aircraft, Parker said. He noted that “not one CEO asked for government relief” when meeting with the Trump administration last week.

There is “real demand” for air travel in the US, evidenced by a spike in bookings made when American dropped fares in the last few days, Parker said.

Since overseeing the merger of US Airways and American, Parker has pushed for a longer-term view of the industry. Shocks will happen and US airlines are now able and prepared to push through them rather than seek a bailout or enter bankruptcy, Parker has said.

He emphasized to analysts and investors at the conference that the US airline industry will emerge in a better condition than before the coronavirus outbreak because the industry will finally have proven that it has changed its financial fundamentals.

Photo credit: American Airlines

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