American Airlines has added its Airbus A330-200s to the list of aircraft types it now plans to permanently retire due to demand erosion from the Covid-19 pandemic, the company said Thursday ahead of its third-quarter earnings call. The airline has already retired 150 airplanes in a fleet streamlining effort that saw it shed its Boeing 757s and 767s, Embraer E190s, Airbus A330-300s, Bombardier CRJ200s, and “certain other” regional aircraft. Out of a fleet of 1,350 airplanes, some 200 sit grounded due to the pandemic.
Separately, the airline recently reached an agreement with Boeing to secure rights to defer deliveries of eighteen 737 Maxes scheduled for delivery in 2021 and 2022 to 2023 and 2024. The company also finalized a series of sale-leaseback transactions to finance its remaining Airbus A321 deliveries in 2021. As a result, American now has financing secured for all of its planned deliveries through next year.
The moves account for part of what the airline calls aggressive action to reduce costs and preserve cash amid a reported net loss of $2.4 billion during the third quarter; the airline estimates it has removed some $17 billion from its operating and capital budgets for this year, achieved primarily through cost savings achieved from reduced flying. Although the company saw improvements in demand and load factors in the third quarter, it still expects to see a 50-percent reduction in fourth-quarter capacity year-over-year.
Speaking during Thursday’s call, American Airlines CEO Doug Parker reiterated calls for another round of financial support from the federal government following the airline’s shedding of 19,000 jobs on October 1 with the expiration of the Coronavirus Aid, Relief, and Economic Security (CARES) Act’s Payroll Support Program. Another 20,000 employees have opted for “early out” or long-term leave.
Asked about the airline’s need for still more government money once the next potential round of CARES Act support expires in six months, Parker insisted he does not see American calling for another package in the spring as people become more comfortable with traveling.
“I happen to believe that what we’re seeing now, even in this environment, is a gradual return of revenues,” said Parker. “We expect that to continue. I think six months from now certainly you’ll see a better environment than we have today irrespective of what may or may not have happened as it relates to the pandemic itself because people are becoming more and more comfortable with travel and cities are opening up…And from an airline cyclicality perspective we’ll be headed into our summer, which is always higher demand. So our view is that six months of PSP extension would be the last PSP extension you would need to keep that [employment] infrastructure in place.”