American Airlines' CEO said he has no idea when travel will get back to normal, as the coronavirus wrecks the airline industry around the world
- American Airlines CEO Doug Parker said on Wednesday that he does not know when airlines will start to recover from the ongoing coronavirus pandemic.
- The airline is projecting a gradual recovery in the third and fourth quarters, despite some others predicting a longer-lasting crisis.
- Public health experts have been unable to provide any concrete insight about when regular travel can resume.
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American Airlines CEO Doug Parker said on Wednesday that he does not have a sense yet of when the airline industry will start to recover from the ongoing coronavirus crisis.
In a short but wide-ranging interview with CNBC's Squawk Alley, Parker said that it "certainly feels like we're at the bottom" of the crisis, and that it's impossible to know when revenues and sales will begin to trend upward again.
"I don't think I know that any better than anyone else," he said. "It depends on when our country starts moving again. It depends on when people feel comfortable. It depends on when Disneyland opens and shelter-in-place restrictions are lifted, and corporate restrictions on travel are lifted."
Parker said that over the past week, the airline had seen a slight uptick in bookings for more than 90 days in advance, as well as corporate interest in travel to events in the fourth quarter. However, he acknowledged that those bookings could change based on whether travel is possible by the travel dates, and whether customers feel confident leaving home.
Referring to the $50 billion federal aid package passed for the airline industry, Parker said that the airline was projecting things to stay bleak through the second quarter, before a "very gradual recovery through the third and fourth quarters."
In a communication to employees on Tuesday concerning a portion of the federal aid, Parker and airline president Robert Isom wrote that they expect Americans to be "regularly flying again" by September 30.
However, others have predicted that it could take significantly longer for the airlines to recover in a meaningful way.
In a research note dated April 1, Stifel analyst Joseph DeNardi wrote that even in a best-case scenario, travel demand would only return "to the pre-outbreak trend by mid-2021," noting that current trends suggest that a more "bearish scenario is playing out."
United Airlines CEO Oscar Munoz and president Scott Kirby said in a memo to workers in late March that they expected the comeback to take longer.
"If the recovery is as slow as we fear, it means our airline and our workforce will have to be smaller than it is today," they said, adding that "based on how doctors expect the virus to spread and how economists expect the global economy to react, we expect demand to remain suppressed for months after that, possibly into next year."
It is not clear when various travel restrictions and social distancing guidelines will begin to be lifted, nor what will need to be in place in order for that to happen. Widespread testing for the virus or for antibodies to the contagion, along with a greater ability for public health officials to trace contacts of those infected with the virus, are expected to be a prerequisite for travel to return before a vaccine is available. A vaccine for the COVID-19 coronavirus could be at least 18 months away.
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