American Airlines begins return of workers after payroll relief

By Tracy Rucinski

CHICAGO (Reuters) -American Airlines is beginning the phased return of furloughed workers after the U.S. Congress passed a pandemic aid package with $15 billion in payroll support for airlines, its executives said in a staff memo on Tuesday.

“While pay and benefits will be restored right away, people will be asked to return to the operation in phases,” Chief Executive Doug Parker and President Robert Isom said in the memo, released by American.

Air passenger traffic is down by about 70% versus a year ago as the coronavirus pandemic continues to wreak havoc on the travel industry. U.S. airlines furloughed tens of thousands of employees when an initial $25 billion in federal payroll support that banned job cuts expired in October.

United Airlines executives warned on Monday that its recall of furloughed employees after the fresh aid would be “temporary,” saying “we just don’t see anything in the data that shows a huge difference in bookings over the next few months.”

American said the relief would help airlines serve passengers once the pandemic subsides, and in the nearer term, aid in the distribution of COVID-19 vaccines and other critical supplies.

Airlines have said they do not expect a robust travel recovery until vaccines or effective treatments are widely available.

American, which has furloughed nearly 19,000 employees since October, stands to receive roughly $3 billion from the payroll package, one person briefed on the matter said.

The new aid package includes similar conditions as the previous one, such as caps on executive compensation and share buybacks, and requires airlines to repay 30% of the payroll grants over time, offer the government warrants, and restore some routes.

The program could stave off job reductions for the time being at Southwest Airlines, which has asked unions to accept pay cuts to prevent its first-ever furloughs next year.

A Southwest spokesman said the company had no updates on the potential furloughs and would closely examine the final terms and conditions of the program once the bill becomes law.

Among other large U.S. carriers, Delta Air Lines avoided furloughs this year after reducing work hours for its largely non-union staff. Its unionized pilots agreed to pay cuts to avoid furloughs through 2021.

(Reporting by Tracy RucinskiEditing by Chris Reese; Philippa Fletcher and Bill Berkrot)

U.S. airlines caution on winter challenges as COVID-19 cases rise

(Reuters) – Delta Air Lines and Southwest Airlines on Thursday cautioned that the recent surge in COVID-19 cases may have a negative impact on travel over the winter holidays, a period the sector had hoped would see improved bookings.

The United States on Wednesday reported new COVID-19 infections reached an all-time daily high for a second day in a row and the number of people hospitalized also surged to the highest ever during the pandemic.

“With the U.S. hitting a grim milestone of 10 million positive cases and outbreaks in Europe and other parts of the world, all signs point to a challenging winter ahead,” Delta Chief Executive Ed Bastian said in a memo to employees on Thursday.

Earlier, low-cost carrier Southwest said an improvement in revenues in the past few months was losing steam in recent weeks, prompting caution about December trends.

“While the company expected the election to impact trends, it is unclear whether the softness in booking trends is also a direct result of the recent rise in COVID-19 cases,” Southwest said.

“As such, the company remains cautious in this uncertain revenue environment.”

The COVID-19 pandemic brought travel to a near halt earlier in the year, forcing airlines to scale back operations and seek government aid.

(Reporting by Tracy Rucinski; Editing by Sonya Hepinstall)

U.S. House Speaker Pelosi to meet with top U.S. airline CEOs

By David Shepardson and Tracy Rucinski

WASHINGTON/CHICAGO (Reuters) – House of Representatives Speaker Nancy Pelosi will speak on Friday afternoon with the chief executives of top U.S. airlines, who are urging Congress to approve another $25 billion in assistance to keep tens of thousands of U.S. workers on the payroll past Sept. 30, sources said.

Pelosi and House Transportation Committee Chairman Peter DeFazio are expected to hold a 2:45 p.m. EDT (1845 GMT) call with the chief executives of United Airlines, American Airlines, Delta Air Lines, Southwest Airlines, JetBlue Airways, Hawaiian Airlines, Alaska Airlines and others, a Democratic aide told Reuters.

In an interview with NBC’s “Today Show” on Friday, American Chief Executive Doug Parker urged lawmakers to “come together and get it done. … We just need people to do what’s right. I know we’re better than this, and our people deserve better.”

At the end of this month, the $25 billion in federal payroll assistance airlines received when the coronavirus first began spreading around the world is set to expire.

Airlines and unions are now pleading for a six-month extension as part of a bipartisan proposal for another $1.5 trillion in coronavirus relief, while simultaneously negotiating with employees to minimize thousands of job cuts that are expected without another round of aid.

White House Chief of Staff Mark Meadows met with major airline chief executives on Thursday. He said President Donald Trump is also open to a stand-alone measure to aid airlines, though congressional aides say that is unlikely to win support given aid requests from so many other struggling industries.

American has said it plans to end service to 15 small communities without additional government assistance and furlough about 19,000 workers.

Air travel has plummeted over the last six months as the coronavirus pandemic has claimed nearly 196,000 American lives and prompted many to avoid airports and planes, seriously depressing airline revenues.

Congress also set aside another $25 billion in government loans for airlines, but many have opted not to tap that funding source.

(Reporting by David Shepardson and Tracy Rucinski; editing by Jonathan Oatis)

Airline CEOs plead with White House to avert looming U.S. job cuts

By Jeff Mason and David Shepardson

WASHINGTON (Reuters) – White House Chief of Staff Mark Meadows met with major airline chief executives on Thursday as the industry braces for thousands of job cuts in two weeks, and urged lawmakers to embrace a $1.5 trillion coronavirus aid package proposed by a bipartisan congressional group and endorsed by President Donald Trump.

Meadows told reporters said that if House of Representatives Speaker Nancy Pelosi was willing to move a bill that would support airline workers and prevent layoffs, Trump would support it, noting the looming layoffs of thousands of workers set for Oct 1.

American Airlines Chief Executive Doug Parker said airlines would also be working with Pelosi.

​Meadows said the administration had examined executive action options, all of them less than ideal.

Airlines did not offer a new proposal but again made the case that helping avert airline job cuts was one good reason to pass a broad coronavirus relief bill.

After the meeting with Meadows, Parker said it was “not fair” that thousands of airline workers were about to be laid off. “We’re just here to plead with everyone involved to get to a quarterly package before October 1.”

Southwest Airlines Chief Executive Gary Kelly said the initial payroll support plan “didn’t go far enough and long enough.”

American has said it plans to end service to 15 small communities without additional government assistance.

At the end of this month the $25 billion in federal payroll assistance airlines received when the coronavirus first began spreading around the world is set to expire.

Congress also set aside another $25 billion in government loans for airlines, but many have opted not to tap that funding source.

Companies such as American are now pleading for a six-month extension while they simultaneously negotiate with employees to minimize thousands of job cuts that are expected without another round of aid.

Air travel has plummeted over the last six months as the coronavirus pandemic has claimed nearly 196,000 American lives and prompted many to avoid airports and planes, seriously depressing airline revenues.

(Reporting by Lisa Lambert, David Shepardson and Doina Chiacu; Editing by Steve Orlofsky and Jonathan Oatis)

EPA approves a virus-killing coating for American Airlines, studies use by schools

By Tracy Rucinski

CHICAGO (Reuters) – The U.S. Environmental Protection Agency said on Monday it has granted emergency approval for American Airlines to use a disinfectant against the coronavirus on certain surfaces that lasts for up to seven days, and is studying whether it could be effective in places like schools.

EPA Administrator Andrew Wheeler said at a news briefing that SurfaceWise2, made by Allied BioScience Inc, is the first long-lasting product approved by the agency to help fight the spread of the novel coronavirus.

American Airlines will begin spraying its airplane cabins with the disinfectant in its home base of Texas after the state filed the request for emergency approval. The carrier hopes to eventually use it across its entire fleet, including its American Eagle regional partners.

The spray does not eliminate the need for cleaning, officials said.

Southwest Airlines, also based in Texas, has been using a two-step process in its cabins that involves an EPA-approved disinfectant spray followed by a separate antimicrobial spray that coats surfaces for at least 30 days.

Reuters first reported on Sunday emergency approval of SurfaceWise2 for use by American and by Texas-based Total Orthopedics Sports & Spine’s two clinics for up to a year.

Airlines have rolled out deeper cleaning and disinfecting of airplanes and airport facilities in an effort to convince people that it is safe to resume flying during the pandemic.

(Reporting by Tracy Rucinski; Editing by Chizu Nomiyama and Bill Berkrot)

Southwest Airlines warns it may need job cuts without jump in travel

CHICAGO/WASHINGTON (Reuters) – Southwest Airlines Chief Executive Gary Kelly told employees on Monday it needs a dramatic jump in passenger demand or it will be forced to take new steps to reduce staffing.

Employees face a Wednesday deadline whether to participate in a voluntary incentive program to leave the airline. “Although furloughs and layoffs remain our very last resort, we can’t rule them out as a possibility obviously in this very bad environment,” Kelly said in a message to employees. “We need a significant recovery by the end of this year — and that’s roughly triple the number of passengers from where we are today.”

(Reporting by Tracy Rucinski and David Shepardson; Editing by Chizu Nomiyama)

Southwest Airlines extends 737 MAX cancellations through October 1

FILE PHOTO: A number of grounded Southwest Airlines Boeing 737 MAX 8 aircraft are shown parked at Victorville Airport in Victorville, California, U.S., March 26, 2019. REUTERS/Mike Blake/File Photo

(Reuters) – Southwest Airlines Co on Thursday said it was extending the cancellation of Boeing’s 737 MAX planes from its flying schedule until Oct. 1, a day after the Federal Aviation Administration warned it had uncovered a new issue that must be resolved before the plane can be ungrounded.

The airline had previously planned to keep the jet off its flying schedule through Sept. 2. Boeing Co’s MAX fleet has been grounded since March, following a second fatal crash in five months.

Southwest, the world’s largest MAX operator with 34 jets, said the delay will result in removing about 150 flights out of its total peak daily schedule of 4,000.

The FAA on Wednesday said it had identified a new potential risk that Boeing must address on the planes.

Reuters reported on Wednesday that Boeing will not conduct a certification test flight until July 8, under a best-case scenario. The test is a necessary step before Boeing can submit a formal request for approval of a software upgrade for the planes.

Southwest said it “made this decision before any developments of the past few days.”

Once the FAA approves the MAX for flight, Southwest has said it would take about 30 days to get the jets up and running again.

American Airlines said on Thursday it did not “have any schedule announcement to make at this time.” United Airlines on Wednesday said it was extending cancellations into September.

Boeing shares were down 2.5% at $365.48 on Thursday.

(Reporting by David Shepardson in Washington and Ankit Ajmera in Bengaluru; Editing by Saumyadeb Chakrabarty and Bill Berkrot)

United Continental pulls 737 MAX flights out of schedule

FILE PHOTO: A worker from United attends to some customers during their check in process at Newark International airport in New Jersey , November 15, 2012. REUTERS/Eduardo Munoz/File Photo

(Reuters) – United Continental Holdings Inc said on Monday it had pulled Boeing Co’s 737 MAX flights out of its schedule through early July, following similar moves by rivals American Airlines Group Inc and Southwest Airlines Co.

United, with 14 MAX jets, had largely avoided cancellations by servicing MAX routes with larger 777 or 787 aircraft.

But the airline’s president, Scott Kirby, warned last week that the strategy was costing it money and could not go on forever.

Boeing’s 737 MAX planes have been grounded worldwide since March after an Ethiopian Airlines jet crashed, killing all 157 aboard, just five months after a similar crash of Indonesia’s Lion Air flight.

(Reporting by Ankit Ajmera in Bengaluru; Editing by Anil D’Silva)

With 737 MAX grounded, airlines face daily scheduling challenges

FILE PHOTO: Southwest Airlines Co. Boeing 737 MAX 8 aircraft sit next to the maintenance area after landing at Midway International Airport in Chicago, Illinois, U.S., March 13, 2019. REUTERS/Kamil Kraczynski

By Tracy Rucinski and Allison Lampert

CHICAGO/MONTREAL (Reuters) – Following the global grounding of Boeing Co’s 737 MAX jets, U.S. and Canadian airlines that fly the roughly 175-seat aircraft face a fresh logistical challenge every day: which flights to cancel and which to cover with other planes.

Southwest Airlines Co and American Airlines Group Inc, the two largest MAX operators in the United States, said they have bolstered their reservation and operations teams to figure out how to spread flight cancellations across their networks, not just on MAX flights.

American Airlines, for example, had most of its 24 MAX jets flying in and out of Miami, where load factors have been full during the Spring Break season.

“We can’t just cancel all of those flights, so the goal is to spread out the cancellations across our entire system to impact the least amount of customers,” American Airlines spokesman Ross Feinstein said.

This means that an American Airlines flight from Miami to the Caribbean initially scheduled on a 737 MAX may now fly on a 737-800 with a similar seat configuration, while that 737-800 flight is canceled.

“It’s a challenge to explain to customers who weren’t previously booked on a MAX why their flight is canceled,” Feinstein said.

The 737 MAX jets were grounded last week following two fatal crashes in the past five months, the causes of which are under investigation.

Southwest, the largest MAX operator in the world with 34 jets representing about 5 percent of its total fleet, is canceling about 150 flights per day due to the grounding, but not all on MAX routes.

Steve West, Senior Director of Southwest’s Operations Control, said the company is trying to cancel flights five days in advance, while looking at issues such as weather, that could free up jets, like last week’s snowstorm in Colorado.

Southwest and American were already grappling with a larger than the normal number of out-of-service aircraft, further straining their fleets.

So far United Airlines, with 14 MAX aircraft, has not canceled any flights due to the grounding but has had to put smaller aircraft on some routes and fly the larger 777 to places like Hawaii.

It is unclear how long the grounding will last. Deliveries are also on hold, meaning an additional hit to airlines due to receive more of the jets this year.

Boeing has over 5,000 orders for the MAX, which sold fast thanks to its higher fuel-efficiency and longer range. Now airlines face a dent to 2019 profits.

Calgary-based WestJet said it took steps prior to the MAX grounding to start protecting trans-border flights to sunny destinations that were previously scheduled to fly with the carrier’s 13 MAX planes.

Meanwhile, Air Canada said on Tuesday it would remove its 24 737 MAX aircraft from its schedule until at least July 1, 2019.

“It is easier to put the aircraft back in the schedule than to pull it out,” said a source familiar with the carrier’s thinking, who is not allowed to publicly discuss its strategy.

 

(Reporting by Tracy Rucinski; Editing by Nick Zieminski)

Southwest cancels more U.S. flights as it inspects engines

Emergency personnel monitor the damaged engine of Southwest Airlines Flight 1380, which diverted to Philadelphia International Airport after the engine blew apart and shattered a window, killing one passenger, on a runway in Philadelphia, Pennsylvania, April 17, 2018. REUTERS/Mark Makela

By David Shepardson

WASHINGTON (Reuters) – Southwest Airlines canceled more flights on Monday as it worked to complete inspections of engines like the one that failed last week in a deadly accident over Pennsylvania.

Flightaware.com, a website that tracks aviation cancellations, said Southwest canceled 129 flights on Monday, or 3 percent of its total flights, and delayed 468 other flights, or 11 percent. By contrast, other major U.S. carriers had each canceled four or fewer flights on Monday, the website said.

Southwest said the cancellations were the result of the company’s announcement last Tuesday that it would begin voluntarily stepping up inspections of some CFM56-7B engines over the next 30 days. The airline said on Sunday it canceled about 40 flights.

It said on Monday it anticipated “minimal delays or cancellations each day due to the inspections.”

The company added it “will continue our work to minimize flight disruptions by performing inspections overnight while aircraft are not flying, and utilizing spare aircraft, when available.”

Late on Monday, Representative Bill Shuster, chairman of the U.S. House Transportation Committee, introduced an amendment to a bill to reauthorize the Federal Aviation Administration that would require regulators to ensure airline engine safety and report to Congress.

The measure would bring airlines, manufacturers, regulators and others “together to share best practices and implement actions to address airline engine safety” and require a review of regulations, guidance, and directives related to airline engine operation. The House is expected to vote on a bill to reauthorize the FAA later this week.

The FAA and European regulators on Friday ordered emergency inspections within 20 days of nearly 700 aircraft engines similar to the one involved in the fatal Southwest engine blowout.

Southwest said the cancellations were not a result of the emergency directive.

The engine explosion on Southwest flight 1380 on Tuesday was caused by a fan blade that broke off, the FAA said. The blast shattered a window, killing a passenger, in the first U.S. airline passenger fatality since 2009. Southwest has declined to answer questions about its CFM56-7B inspection program, including how many engines were inspected before the accident, and if the engine that failed had been inspected and if the new inspections turned up any problems.

A Southwest flight in August 2016 made a safe emergency landing in Florida, after a fan blade separated from the same type of engine and debris ripped a hole above the left wing prompting two service bulletins from engine manufacturer CFM International, a joint venture of General Electric and France’s Safran .

(Reporting by David Shepardson; Editing by Peter Cooney)