American Airlines made the surprise announcement in a statement released Thursday afternoon.
As per the mega carrier, all long-haul international flights are to be suspended through May 6, including all routes from Miami International Airport to Aruba, Brazil, Chile, Colombia, Ecuador, Guatemala, El Salvador, Saint Maarten and Peru. In addition, all flights to Europe are also grounded, except for one flight daily from Miami and Dallas to London Heathrow, as well as three flights per week from Dallas to Tokyo Narita.
American Airlines’ domestic flights, on the other hand, will drop by 30 percent in April with further reductions expected to be enacted in May.
According to the mega carrier, they will also be offering 13,500 employees the option for voluntary unpaid leave, which would allow them to keep their health benefits, as well as early retirement for those who have 15+ years of service at the company. In addition, American Airlines also announced a hiring freeze and pay freeze, as well as the suspension of new flight attendant training classes.
"This is a crisis unlike any we’ve faced in the past. Together, we will continue to be aggressive on all fronts so that we ensure American’s future is intact...We are in the fight of our lives, and we will win. Now is the time to come together and rally against a common enemy," American Airlines president Robert Isom said.
Isom, in another statement, announced that American Airlines will be making their first cargo-only flights in 36 years.
According to Isom, American Airlines will temporarily convert some of their passenger planes into cargo-only aircraft, in order to focus on shipping items such as medical supplies, mail for active U.S. military personnel, telecommunications equipment, electronics and e-commerce packages between the United States and Europe.
"Challenging times call for creative solutions, and a team of people across the airline has been working nonstop to arrange cargo-only flight options for our customers," Isom stated.
Flights will be operated only by necessary crew members, the airline added.
American Airlines made the announcement after the United States’ State Department issued a Global Level 4 Health Advisory urging its citizens to not travel internationally and for American expatriates to return to the United States if possible.
While not mentioned as being one of the reasons for the grounding, American Airlines made the announcement about a week after upper management confirmed to the public that one of the pilots based at their Dallas-Fort Worth hub has tested positive for the coronavirus.
Aside from grounding its fleet and suspending most of its flights, American Airlines is also taking out a $1 billion line of credit from Citibank, in the event of even more financial pain in the travel industry in the wake of COVID-19.
The loan brings the company’s "available liquidity" to a total of $8.4 billion, of which $4.2 billion is in unrestricted cash, which it can then use to prepare for the coming months.
Isom, in his statement, warned however that the company? – and the rest of the airline industry? – do not expect things to get better anytime soon.
"While these steps are unparalleled in our history, we expect demand to fall even more before it gets better," Isom said, adding that more network reductions are being worked in real-time as flight bookings decline.
Earlier this week, airline stocks plummeted in trading, including a 25 percent decrease for American Airlines shares.
The current plunge in demand for air travel brought about by severe travel restrictions across different countries is considered by many to be aviation’s biggest crisis since the September 11 terrorist attacks.
Other major American carriers such as United Airlines and Delta Airlines have shut down their operations in the wake of the coronavirus pandemic. Budget airlines Jetblue, Spirit and Allegiant have likewise cut their flights in the meantime.
As of press time, the coronavirus has been confirmed to have infected 274,092 and killed 11,369 people around the world.
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