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American Sells 2020 Baird Global Industrial Conference on Simple Fleet and Network Strength

American Sells 2020 Baird Global Industrial Conference on Simple Fleet and Network Strength
Joe Cortez

With 2020 a lost cause for the aviation industry, American Airlines is looking towards a stronger 2021 on the wings of a simplified fleet and strong network partnerships. Presenting at the 2020 Baird Global Industrial Conference, the airline says they have a key advantage once flyers are ready take to the skies again.

There’s no doubt that 2020 will go down as the hardest year for commercial aviation, due to the COVID-19 pandemic. American Airlines is looking forward to 2021 as a rebuilding year, touting their fleet building strategy and network strength compared to other international airlines. Their comeback tour plans were presented at the 2020 Baird Global Industrial Conference on Thursday, Nov. 12, 2020.

American Touts Reduced Subfleets by 50 Percent and Strong Partner Network

In their 18-slide presentation at the industrial conference, American noted the challenges they faced this year. In the third quarter of 2020 alone, American’s revenue dropped by 73 percent – all directly attributed to the pandemic.

However, American says they are capable of weathering the storm due to their cuts in daily cash burn rate and available liquidity. In addition to the $13.6 billion available in liquidity, the airline notes they have an additional $3.2 billion available in unencumbered assets, including aircraft, parts, equipment and real estate.

Looking forward to 2021, airline executives say their strength is focused in two key areas: fleet simplification and network accessibility. By 2022, the airline plans on reducing their number of subfleets from 46 to 22, creating a more consistent customer experience across the board. In addition, American says they have one of the youngest fleets among the legacy three, with an average age of around 11 years.

Image Courtesy: American Airlines

In addition, the airline points to their hub network and partnership strategy as critical to meeting demand across the United States. With four large connecting hubs in three time zones – Charlotte Douglas International Airport (CLT), Dallas-Fort Worth International Airport (DFW), Miami International Airport (MIA) and Phoenix Sky Harbor International Airport (PHX) – American says they can capture more passenger unit revenue than Delta Air Lines, Southwest Airlines and United Airlines.

Beyond their network, their strategic alliances with Alaska Airlines and JetBlue in the United States, Gol Airlines in Brazil, and Oneworld partner Qatar Airways, flyers aboard the Fort Worth-based carrier are potentially capable of reaching major destinations around the world without difficulties.

Image courtesy: American Airlines

Recovering business travel in 2021 is still paramount to their recovery strategy. While screened passenger counts are uncertain at best, the airline believes managed corporate travel will be key to increasing passenger count, led by flyers in the financial services, professional services and discretionary consumer industries.

Image courtesy: American Airlines

Despite Optimism, Passenger Count May Not Recover Until 2022

While American’s plan is incredibly optimistic, industry leaders project airline recovery is far from certain. A Cowen analysis suggested airlines may not see pre-pandemic passenger loads until 2025, while Leeham News and Analysis suggests the best case scenario for the aviation sector is a recovery by 2024.

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