In an internal update shared on Twitter, Compass Airlines has lamented that it will completely terminate its operations. It’s a statement that will be maintained not just until the end of the coronavirus pandemic, but forever. The airline said that it would close its doors in two weeks after unexpected capacity cuts from its partners.
Compass faced “insurmountable obstacles”
An internal memo has been shared on Twitter in which the CEO of Compass Airlines informs its employees that Compass Airlines’ operations will be no more. Writing to his employees today, Mr. Rick Leach said that the effects of coronavirus have severely hampered the airline, so much so that it could not continue.
However, this is a different tune to what we heard more recently from Compass.
Just last week, the regional US-based airline was hopeful that it could sustain its operation despite cuts from Delta Air Lines and American Airlines. However, as both of these carriers terminated even more services, Compass was left struggling to stay afloat.
In the internal memo, Mr. Leach wrote:
“Demand has diminished to the point that American has made the decision to remove a large majority of American Eagle flights in Los Angeles starting on April 7, which will effectively eliminate all our remaining flying…We are now faced with two insurmountable obstacles…[These challenges] have forced us to make the incredibly difficult decision to pull down the Compass operation in conjunction with the temporary wind down of American’s regional operation in Los Angeles.”
Mr. Leach continued to say that no airline was immune to the effects of Covid-19 but that the collapse of Compass Airlines was still difficult for him to take.
Minneapolis-based regional carrier Compass Airlines will shut down operations, its CEO says in an internal memo pic.twitter.com/qpUWT4sAcS
— Kyle Potter (@kpottermn) March 19, 2020
Sustaining its operation was not entirely its decision
The escalation of the coronavirus and how it would affect operations was largely out of Compass Airlines’ hands. More so than other airlines that are struggling under the pressure of reduced travel interest.
That’s because the airline operates and thus relies on the stability and schedule of some of the US’ largest airlines. Ultimately, these airlines had the final say over how much capacity they would need from Compass Airlines.
Delta was due to complete its contract with Compass Airlines sometime around July this year however developments in the coronavirus pushed that date even earlier in the calendar. Compass was, therefore, due to conclude services as Delta Connection at the end of this month. It, of course, was not an ideal situation for the carrier. Despite this, Compass was rather sanguine about the situation. That was until American Airlines issued a capacity decrease of 14% in April.
The pressure to maintain its operation was too much under this new chrysalis. Without supporting partners, the airline had little of its operation left.
What happens now?
Compass Airlines has said that the next step will be to move its aircraft to other airlines when it closes its operation. It currently has 32 Embraer E175 with a seating capacity of 76 but that fleet is split between American and Delta. Until now, Compass operated 12 E175 with Delta Air Lines under the brand Delta Connection. The remaining 20 E175 operated with American Airlines as the American Eagle brand.
Some of these aircraft have already been vouched for. Back in August 2019, Delta declined to renew its contract with Compass Airlines. As such, an arrangement for the aircraft was predetermined. The aircraft will be transferred to the regional airline Republic Airways. Republic Airways operates under the American Eagle and Delta Connection brand as well as for United Express.
It is also thought that Compass’ E175s that fly for American Airlines will be transferred to Envoy Air. Again, this is a regional airline working under the American Eagle brand. Compass will transfer these aircraft to Envoy Air in April 2020.
With Compass Airlines’ demise, it appears that suggestions about airlines threatening collapse amid coronavirus are all too real. That said, we hope more can be done to save those airlines that need it.
Will you miss Compass Airlines? Let us know your thoughts in the comments.