Transcript: American Airlines CEO Doug Parker on "Face the Nation," September 27, 2020
The following is a transcript of an interview with American Airlines CEO Doug Parker that aired Sunday, September 27, 2020, on "Face the Nation."
MARGARET BRENNAN: The airline industry is one of the hardest hit this year due to the coronavirus, and we want to go now to the CEO of American Airlines, Doug Parker, who joins us from Fort Worth, Texas. Good morning to you.
AMERICAN AIRLINES CEO DOUG PARKER: Good morning, MARGARET.
MARGARET BRENNAN: You announced Friday that you came to terms with the US Treasury for a five and a half billion dollar loan. You could get another$2 billion if you need it. How long will this money last? And does it mean you won't have to carry out the 19,000 furloughs and job cuts you predict will happen this week?
PARKER: Oh yeah. Look, there's- we have plenty of liquidity this- this- that loan is part of the CARES Act from back in March. Some really important legislation, I think, for our country, certainly for our business, for the airline industry. It provided $25 billion dollars of loans to airlines. And that loan you're talking about is just the closing of our prorated share of that loan. But it also provided $25 billion dollars of payroll support, essentially a pass through- a pass through to the airlines to pay our people, even though we didn't have full work for them to keep airlines moving, to keep the country moving. That's- both of those things are really important. The loan program is complete. The payroll support program, unfortunately, expires on October 1st. Back in March, we all thought demand would be back. We wouldn't need support beyond this beyond this time. Unfortunately, that hasn't been the case. So on October 1st, that program, absent being extended, is going to expire. And indeed, they're going to be 100,000 aviation professionals who are out of work, who wouldn't be otherwise. That is why we are fighting so hard to get that payroll support extended.
MARGARET BRENNAN: So to be clear, your plan is still this week to lay off, or furlough, 19,000 people.
PARKER: Our plan actually is to get Congress and the administration to come together and get the COVID relief package passed that will include support and an extension of payroll support program--
MARGARET BRENNAN: Do you have any reason to believe that that is going to happen?
PARKER: We do. There's enormous bipartisan support for it. We have Republicans, Democrats, the administration all saying- knowing that this is the right program, that it makes sense. That indeed it should be extended because airline employees provide critical infrastructure. And once we furlough those employees, it's really hard- for example, to get pilots back in training. So once- once- once we've furloughed and shrunk airlines, our ability to continue provide services needed to pull the economy back out of this--
MARGARET BRENNAN: Right.
PARKER: --is going to be severely hampered. So, yeah, there's enormous support for it. You know, we have everyone putting us in every bill they have. We just need the bills to be laws. We need- we need laws not bills. And that's--
MARGARET BRENNAN: But that's--
PARKER: --that's what we're trying to. That's what we're going to do. I'm actually confident we can get it done.
MARGARET BRENNAN: I'm glad you're confident because hopes and as- as you're laying out there, I mean, Congress is just completely stalled on this. Did the White House give you an assurance that they will step in and give some kind of emergency aid to you if Congress can't deliver by September 30th?
PARKER: The president said he's interested in doing an executive order if it makes sense. We think the better plan is to get legislation passed between now and then. We really do believe it can happen. We're certainly- there's certainly not much time left, but there's enough time. And again, in some- oftentimes a deadline like this is what is needed to get action. We're hoping that's the case. We're letting everyone know that this is a real deadline. Indeed, 100,000 aviation professionals are going to be out of work come October 1st. If we don't get people to come together, we're really hopeful they can. Again, we've been told by all sides that they are supportive of this, that it makes complete sense that they're on our side. We just need them to work- to come together and do what's best for America and for our country and certainly for the airline business.
MARGARET BRENNAN: As you laid out, it was taxpayers back in the spring that gave the $25 billion to help you make payroll. The bet at the time was that the- our health professionals would have everything under control by September 30th. And that is just clearly not the case. So--
PARKER: Right.
MARGARET BRENNAN: What's- I mean, how much money and for how long becomes the follow up question here, right? I mean, how do you get customers to fly again before there's a vaccine?
PARKER: Well, we're seeing some increase in- in as customers begin to return to the skies, understanding that indeed it is safe to fly. We're seeing gradual improvement. The biggest thing- so a vaccine certainly would be really helpful. But, you know in between there, having quarantines go away, having you know- having companies bring people back into the office, returning to work. Those types of things have a huge impact on the need for air travel. We saw, you know, at American we had our- revenues were down some 85 percent in the second quarter.
MARGARET BRENNAN: Yeah.
PARKER: They're going to be down about 75 percent in the third quarter--
MARGARET BRENNAN: OK.
PARKER: They're going to be down at about 65 percent in the fourth quarter. And that's better than most companies--
MARGARET BRENNAN: Yeah.
PARKER: -But it's still down 65 percent--
MARGARET BRENNAN: Yeah.
PARKER: So it's a gradual return--
MARGARET BRENNAN: OK.
PARKER: -- but having revenues down 65 percent nine months later is a big problem.
MARGARET BRENNAN: All right. I'm sorry. I'm out of time. I got to leave it there. Good luck to you, sir. We'll be back in a moment.
