Business Travel Briefing
For April 30-May 14, 2020
The briefing in brief: American Airlines said it would never lose money again, but it lost $2.2 billion in the first quarter. (United, btw, lost $1.7 billion.) Southwest got a $3.3 billion bailout, but spent $639 million in the first quarter on share buybacks and dividend payments. New York-area airports now require tickets to enter a passenger terminal, kinda, sorta. Fewer than 400 people a day now fly to Hawaii. And more, including our daily Coronavirus update.

American Airlines today (April 30) reported a first quarter net loss of $2.2 billion. That wouldn't raise an eyebrow in these pandemic times, especially since United Airlines today posted a $1.7 billion net loss. What's notable about American's loss is chief executive Doug Parker's repeated vows that, as god was his witness, he'd never lose money again. Here's the sage Parker at the airline's 2016 annual meeting: "My personal view is that you won’t see losses in the industry at all," he said. "We have gotten to the point where we ... will have good years and bad years, but the bad years will not be cataclysmic. They will just be less good than the good years." He doubled down on the bizarre claim during a confab with security analysts in September, 2017. "I don't think we're ever going to lose money again," Parker said in much-quoted remarks. "We have an industry that's going to be profitable in good and bad times." And while there is no truth to reports that Parker retreated to Tara after today's airline's earnings call, his next public appearance might be in some new togs he saw in the window and couldn't resist.

JetBlue Airways has been the dominant player for years at slot-controlled Long Beach Airport. In fact, it was JetBlue's preferred Los Angeles-area airport until it decided it couldn't prosper without an LAX presence. But JetBlue has soured on LGB since local authorities decided not to allow international flights--or pay for a Customs facility. JetBlue subsequently has been shedding slots and this week the airport reallocated three of them to Southwest Airlines, three to Delta Air Lines and one to Hawaiian Airlines. This means Southwest now has as many flight slots (17) as JetBlue. Delta (12) is the only other carrier with double-digit slot capacity at Long Beach.
        New York Airports have imposed a ticketed-flyer-only rule for access to passenger terminals at Kennedy, LaGuardia and Newark The rule went into effect Tuesday (April 28), but don't expect it to be rigidly enforced. It seems more like an effort to keep homeless people out of the facilities. However, be prepared to show proof that you are ticketed to fly if challenged at a terminal entrance.
        Berlin/Tegel Airport closes "temporarily" on June 1 and may never reopen. The airport was due to shutter permanently on November 8 after the presumed successful debut of Brandenburg, which is now scheduled to open on October 31 after a nine-year delay. With Berlin's air traffic down to about one percent of pre-pandemic levels, any gap will be handled by Schönefeld, the former East Berlin airport.

As the airlines juggle flight schedules based on pandemic rules and shriveled passenger demand, you need a scorecard to keep track of the comings and goings. Turkish Airlines, for example, has dropped all flights worldwide until at least May 28. Also going: the LAX-London route operated by Air New Zealand It was due to end in October when ANZ launched its Newark-Auckland nonstop, but the carrier said the flight is officially toast. Ironically, Air New Zealand has delayed launch of the Newark flights until at least late 2021. On the positive side of the ledger, TAP Air Portugal is restoring a link to North America. Effective May 18, it'll resume two weekly flights between Lisbon and Newark. This time, however, narrowbody A321neo aircraft will be used on the run. Current plans call for service to expand to five weekly flights on June 3 and daily on July 1.
        Air France scored a 7 billion euro rescue package from the French government this week, but there are strings. Most intriguing? The airline will not be able to compete with French railroads from either Paris Airport--CDG or Orly--on routes that trains can do in 2.5 hours of less. However, the rule only applies to local point-to-point ticket sales. Passengers connecting at CDG or Orly from elsewhere in France or international points can book any flights that Air France chooses to operate on the short hauls. The good news? CDG is fully integrated into the French railroad system and you've long been better served by taking the train instead of flying onward from CDG on short hauls to places such as Lyon, Nantes and Bordeaux.
        Norwegian does not expect to resume transatlantic flights before the summer of 2021. In a presentation to bondholders this week, the low-fare carrier said resumption of service to the United States would focus on flights from New York/Kennedy and LAX.

The Transportation Department says it'll pay 50 percent of its contracted per-flight subsidiary to airlines participating in the Essential Air Service even when carriers don't run the flights. So long as carriers operate one roundtrip per day on the routes, DOT will pay 50 percent of the subsidy on the other cancelled flights. About 160 communities have EAS service and around half of the airports are in Alaska.
        Hawaiian Airlines says it resumes daily Honolulu-Seattle nonstops tomorrow (May 1). Which is weird considering traffic to Hawaii is down 99 percent year over year, according to state government statistics. The collapse began in late March and accelerated when the state imposed a mandatory 14-day self-quarantine for all visitors and returning residents. By the end of last week, the state said fewer than 400 visitors per day were arriving in the state.

Southwest Airlines this week reported a first-quarter net loss of $94 million. But never let it be said that even well-run carriers don't do things that infuriate taxpayers, who just footed the bill for the airline's $3.3 billion CARES Act bailout. Yet Southwest said this week that it burned through $639 million in the first quarter via stock repurchases ($451 million) and dividend payments ($188 million). Because of course it did ...