American Airlines Suspends Pilot Training
On Thursday, the infamous poster on X, JonNYC, shared a series of emails purportedly between a pilot recruit scheduled to start training with American Airlines this month. Someone from American Airlines was giving the bad news to the recruit that they were suspending pilot training for the rest of 2024.
JonNYC also noted that in the next 18 months, due to the US mandatory retirement age of 65, will lose approximately 1,300 pilots before the end of 2025.
The industry site, Skift, confirmed the suspensions from American Airlines management.
“American Airlines is pausing pilot hiring as it reevaluates its growth plans for the year. The carrier said it would temporarily pause new pilot hiring in September, October and November.
The decision doesn’t affect current pilots but some pilots who had received conditional offers will not be joining until after the pause is lifted.
“This decision allows us to optimize our capacity and tailor our talent growth plans to best serve the current needs of our airline,” American said in a statement. ” – Skift
It should be noted that while those three months had classes cancelled, December had not yet been scheduled and will not be scheduled now.
The Model Isn’t Working
Prior posts regarding pilot furloughs, pauses, or cancellations were met with a cheap answer: production delays from Boeing and engine deliveries for Airbus A320s. American did not blame the pullback on either of those issues for which they are dealing with both.
Three weeks ago, I wrote that American Airlines was “as messy as it gets.”
I was wrong. This week was worse.
American Airlines management revised Q2 revenue guidance down dramatically.
“American’s TRASM guidance for Q2 is now expected to be down approximately 5% to 6%, compared to its prior forecast of down 1% to 2%. Operating margin was also seen down 1%, in a range of approximately 8.5% to 9.5%.
Shares of American are having their worst day since June 2020, during the throes of the pandemic.” – Yahoo! Finance
The stock has dropped nearly 20% in the last three weeks as of close on Friday.. Pilot training has been suspended because the airline has too many pilots for the demand the airline is seeing. That’s shocking since we are at peak travel, given that the TSA just processed the most passengers (2.95MM) in a single day this week.
Is there a case to be made for anything but ineptitude or gross incompetence?
Are Heavy Travelers Booking Away From American Due To Strike Potential?
One possible answer could be that because American Airlines can’t afford to pay flight attendants more and also cannot afford to not meet their demands, and as such a flight attendant strike is almost certain to take place. In some frequent flyer groups I have seen high frequency business travelers booking away from the brand concerned that labor action will put their trips at risk of completion.
But is the flight attendant struggle mainstream enough to affect revenue drops the likes of 3-5% above guidance? Possibly. But that would have to reach $406-676MM based on the last two months and that seems far too great. And as the strike has not yet occurred, the revenue drop couldn’t be blamed on action taken.
Conclusion
Let me postulate the concept that American Airlines management is simply not up to the task. Vasu’s concepts were not good nor was his department’s execution. But Vasu wasn’t responsible for the prior five years of underperformance compared to peers, he wasn’t responsible for straddling unreasonable debt to the carrier, and it wasn’t Vasu that was responsible for doing nothing to address flight attendant contracts over the same period. It’s not the failure to deliver aircraft from Boeing, it’s not engine delivery issues for the A320, and it’s not even the recent racial issue which sent CEO Isom apologizing to the public.
Incompetence. Disinterest. Take your pick.