Two Takeaways From American CEO Doug Parker On Face The Nation
Parker appeared for a brief segment on Face the Nation, with the focus of the conversation on the upcoming expiration of the Payroll Support Act.
Moderator Margaret Brennan asked Parker if the President would take executive action if Congress could not pass a plan this week. Parker did not discount the possibility, but expressed hope for a Congressional solution:
“The president said he’s interested in doing an executive order if it makes sense. We think the better plan is to get legislation passed between now and then. We really do believe it can happen. We’re certainly- there’s certainly not much time left, but there’s enough time. And again, in some- oftentimes a deadline like this is what is needed to get action. We’re hoping that’s the case.
“We’re letting everyone know that this is a real deadline. Indeed, 100,000 aviation professionals are going to be out of work come October 1st. If we don’t get people to come together, we’re really hopeful they can. Again, we’ve been told by all sides that they are supportive of this, that it makes complete sense that they’re on our side. We just need them to work- to come together and do what’s best for America and for our country and certainly for the airline business.
Small problem for the hope of executive action: it is not clear under what authority the Administration would be able to unilaterally extend funding, even if well below the $25 billion “clean” extension Parker is seeking.
Second, Parker sees the return of business travel as the path forward for ending government payroll support. Brennan asks, “How much money and for how long becomes the follow up question here, right? I mean, how do you get customers to fly again before there’s a vaccine?”
“Well, we’re seeing some increase in- in as customers begin to return to the skies, understanding that indeed it is safe to fly. We’re seeing gradual improvement. The biggest thing- so a vaccine certainly would be really helpful. But, you know in between there, having quarantines go away, having you know- having companies bring people back into the office, returning to work. Those types of things have a huge impact on the need for air travel.”
My own travel consulting company has a pretty good pulse on air travel and I can tell you, business travel is largely dead. Yes, leisure travel is picking up a bit, but the idea that large corporations will start putting employees on airplanes seems far-fetched at this point.
Parker has been making the rounds, desperate for another taxpayer funded bailout ahead of October 1st. His problem, sadly, is that there is no end in sight and that even once a vaccine is available, many companies have realized they are just fine with Zoom instead of air travel. The industry is changing and talks of going back to “2019 levels” of demand increasingly seems like the wrong emphasis.