Specialist
Former managing director at American Airlines Inc
Agenda
- Survivability and recovery outlook for United Airlines (NASDAQ: UAL) and Delta Air Lines (NYSE: DAL)
- Key operational challenges and actions taken to contain costs
- Financial positioning and potential changes in overall market strategy
- Path to recovery and ability to stimulate demand and confidence in the indKey operational challenges and actions taken to contain costsustry
Questions
1.
How are you assessing the impact of the coronavirus pandemic so far and American Airlines’ ability to mitigate some of these impacts? What would you highlight as its main risk?
2.
Could you outline the legacy carriers’ exposure and how that compares with the LCCs [low-cost carriers] and the ULCCs [ultra low-cost carriers], including the magnitude and length of impact, and overall agility?
3.
Can you elaborate on how American Airlines might approach shedding its hub structure?
4.
Could you outline the process if American Airlines decides to exit one of the main hubs where it operates? How would that change the company’s scale and competitiveness in that particular market?
5.
How are you assessing the positioning of United Airlines, American Airlines and Delta, and how these three might emerge out of the pandemic?
6.
What were your initial thoughts about American Airlines’ recent announcement to have flights at full capacity? What are some potential risks associated with this strategy?
7.
How would you assess American Airlines’ liquidity and ability to survive over the next few months if the pandemic expands with a second wave?
8.
What can American Airlines do to further reduce its cash burn? What respective levers could it pull and how should we think about the long-term consequences of some of these actions?
9.
Could there be some bottlenecks when it’s time for an airline to add capacity back and bring planes back, given that heavy maintenance checks have been deferred?
10.
Could any additional maintenance be required for some of the parked planes that are in long-term storage?
11.
You alluded to American Airlines retiring some of its fleet, such as Boeing 757, 767 and so on. What is your overall assessment of American’s retired aircraft and what other aircraft are at risk of being retired?
12.
How old must an aircraft generally be to be economically suitable for early retirement? To what extent does it vary across the aircraft models?
13.
How do you think American Airlines will pursue its overall mid-term domestic and international strategy during a recovery environment? What about in the long term as air traffic returns to past levels?
14.
Where does American Airlines still have any degree of competitive edge as the domestic market tightens and intensifies?
15.
How do you think American Airlines will approach some of its outstanding orders with Boeing, Airbus and Embraer? It had a total of 47 due for delivery in 2020 and 30 in 2021. How might it approach accepting, cancelling and deferring orders?
16.
How would you characterise American Airlines’ target customers and how might its strategy shift given today’s market changes?
17.
How do you expect leverage between American Airlines and airports and the hubs to potentially change as a result of the crisis environment? Who might gain or lose negotiating power?
18.
What can American Airlines or the industry do to try and stimulate demand during the recovery? Who bears what responsibilities? Is the burden being shifted across various parties?
19.
Who might absorb all the associated safety costs, whether pre-flight or during? Will it generally get passed on to the customers?
20.
Could you elaborate on the loyalty programme? Additionally, how do you anticipate revenue from ancillary services to trend once air traffic starts to return?
