American Airlines CEO: Transportation of COVID-19 vaccines will be ‘biggest distribution effort in history'

Doug Parker American Airlines CEO, joined Yahoo Finance to discuss how American Airlines is preparing to

transport COVID-19 vaccines when its ready for distribution.

Video Transcript

SEANA SMITH: So one of the sectors-- one of the industries, I should say-- directly impacted by all this, one of many, are the airlines. And Adam, I know you closely follow the airline industry and what we've been seeing play out there over the course of the pandemic. You spoke to American Airlines CEO Doug Parker about this a little bit earlier. What did he have to say, just about where they stand and what's going on at this point?

ADAM SHAPIRO: Well, he was actually in Washington DC, so he remains hopeful there'll be some kind of Payroll Support Program extension in whatever is the next round of stimulus. But we also talked about the fact that American is preparing to ship COVID-19 vaccine not only here in the US, but to Latin America. Here's some of what he had to say to us.

DOUG PARKER: Yeah, and it's-- obviously, it's incredibly important work and work that our team is very excited to play a role in. It's what we all do, as airlines. Half the cargo around the world flies in the bellies of commercial aircraft, and certainly, wide bodies, international wide bodies are a big part of that. So we're all going to be critical pieces of this vaccine distribution.

The tests you were mentioning, yeah, this is a real challenge for our team because some of these vaccines need to be held at-- kept the temperatures, you know, well below zero and different-- and there are different circumstances for different vaccines-- some in dry ice, some travel in these containers that are kept at those temperatures throughout the flight. So we've been working with both freight forwarders and with the pharmaceutical companies to ensure that we can indeed transport packages along-- all the way from Europe down to Santiago, Chile, and have proven we can do so and are ready, when there are real vaccines to be traveling, to play our part.

ADAM SHAPIRO: Will this all come out of-- I would imagine out of Miami for Latin America. But in the United States, when you take a role in shipping vaccine in the continental United States, would it be based out of Miami, or the different hubs where you have the cold storage facilities?

DOUG PARKER: Well, you know, it's not so much the facility. Well, it's some of the facility. But so much of it is just maintaining the temperatures while distributed throughout the world. So it's going to be everywhere. And these-- the containers themselves, actually, are-- that are loaded onto the aircraft contain the cooling units-- again, other than the dry ice that is being used by some, like Pfizer.

So it's the container itself. Yes, we need to have facilities in our airports. But it's going to be everywhere. The reason we did it as far as Santiago is to test if it can travel that far. But again, distributing within the United States is going to be, you know, on airplanes like American Airlines, as well as our competitors. We're all going to be involved in this process to make sure it gets throughout the country.

SEANA SMITH: And you've already earned different agencies. I think I was reading here that the American International Air Transport Association's Center of Excellence for Independent Validators in Pharmaceutical Logistics-- you've been doing this, your airline, for several decades already, so this is nothing new for American.

DOUG PARKER: No, it's not. And again, it's much more important suddenly. Not that it wasn't important work before, but this is going to be the biggest distribution effort in history as we all are working just as fast as we can. The vaccine is going to be distributed. That we know. What's really important is getting it distributed as efficiently and without as-- with as much-- without-- with as little spoilage as possible. And that's what we're prepared to do.

With a huge hub in Philadelphia, we, in American-- because of the pharmaceutical companies in and around Philadelphia, we've been doing this for a long time. We are good at it. We're prepared to do it. We're just making sure that we're able to provide this level of support on what is, obviously, a global important effort.

SEANA SMITH: I want to shift gears slightly to what's happening in Washington DC. Because American Airlines, the other legacy carriers, all of the carriers are going to be a crucial player in what you've just described, but we got to make sure you all are viable and there. The government came through in March with the CARES Act, but there's still need for more. Are you getting any indication that there'll be an additional Payroll Support Program in the stimulus talks that are going on right now?

DOUG PARKER: Yeah, thanks, Adam. Thanks for mentioning it. First off, in direct response to your question, I'm here in DC right now. We're starting to-- in the last couple of days, it feels better than it has over the last few months, but a lot of work to do.

So we're encouraged but know that we have work ahead. It's incredibly important work, this vaccine distribution. All along, we talked about the reason it's so important that the airlines get support is not because the airlines need financial support. We do, of course.

But it's not about airlines. We've all gone and raised more than enough capital to survive the pandemic and beyond. Now, it's about protecting the critical infrastructure that we provide to bring the economy-- to help the economy rebound.

And the beauty of the CARES Act is those funds-- the PSP funds-- went straight to our team members. It was a pass-through for us to pay employees, not furlough anyone, even though there wasn't enough demand for them to work. We, effectively, were accepting these funds to pay our team and keep them in place, keep the infrastructure in place.

Well, that's-- since October 1, that infrastructure has been deteriorating because PSP expired. People have been furloughed. Lots of people are on liens. We have over 100,000 people not working that otherwise would be working in our industry.

So as the economy rebounds, those people don't just immediately come back. For example, pilots, if we don't have pilots flying three takeoffs and landings on the same equipment type over a 90-day period, we need to get them back into training. And that's quickly approaching.

And so it's important in that infrastructure, as I've been saying, we've been saying all along for the economy, this vaccine distribution just takes it to a new level. That's-- those wide-body aircraft that we've been talking about the airplanes that are grounding, for the most part, because of low demand internationally. And the pilots that flew those airplanes are the ones that have been downgraded to different equipment types.

So come January, February, when there's a need for mass distribution of vaccine, we're highly concerned that we're going to be able to do as much as we could. Again, the vaccine will be distributed. But to be distributed as quickly as it can be requires those airplanes to be flying and have pilots trained to fly them. And that's not going to happen unless we get this PSP extension.

So we've been making that point. We are happy to be included in the proposal of $908 billion that was made by a bipartisan group, and we're highly hopeful that between now and year-end, Congress will do what's right, not just for airlines, but for our country and pass what is not any more stimulus, but actually emergency relief to get-- to take care of the needs of our country for at least the next four months until we can [INAUDIBLE] ourselves.

ADAM SHAPIRO: Seana, one other thing to keep in mind, American Airlines, like the other airlines, has lowered their cash burn-- their daily cash burn. At the end of the last quarter, it was at about $44 million. They are guiding now that it's going to be between $25 and $30 million a day.

That's still a lot, and they acknowledge it. And it's one of the reasons they say extended assistance through the Payroll Support Program would be helpful and help keep all of the airlines viable as they now need to get ready to start delivering these vaccines. Seana?