American Air to Cut Overseas Flights 25% in Slow Recovery
(Bloomberg) -- American Airlines Group Inc. will reduce its summer 2021 international schedule by 25% from pre-pandemic levels, signaling that travel abroad will be especially slow to recover from the effects of the coronavirus.
The carrier will drop 15 routes and shift its focus on Asian service to Dallas-Fort Worth instead of Los Angeles.
The retrenchment is fueled by American’s decision to retire its Airbus SE A330-300 and Boeing Co. 757 and 767 aircraft -- wide-body jets used on international flights -- after the pandemic nearly erased demand for travel. The airline also parked its A330-200s for at least two years, further reducing flying capacity.
International business traffic, the most lucrative segment for airlines, is expected to be the last part of the industry to return from government and corporate travel restrictions. American doesn’t expect long-distance international demand -- for business or leisure -- to return to 2019 levels until 2022 at the earliest, said Brian Znotins, the airline’s vice president of network planning. American in July will operate just 20% of the international service it flew a year earlier.
“I view this as resetting the base,” Znotins said in an interview. “Our growth trajectory will remain the same -- we just took three to four years out of that growth. And 2022-2023 should return to 2019 levels, and we’ll keep growing from there as we had planned. It’s just like we erased three years of history.”
American rose 2.5% to $13.39 at 10:46 a.m. in New York. It jumped as much as 9.3% earlier, propelled with other airline shares after United Airlines Holdings Inc. said it would boost its August domestic schedule to nearly half of last year’s level. American had dropped 54% this year through Tuesday, while a Standard & Poor’s index of the five biggest U.S. airlines fell 49%.
Domestic air travel worldwide improved slightly in May from April, but international traffic remained “virtually stopped,” Alexandre de Juniac, director general of the International Air Transport Association, said in a statement Wednesday.
“We are only at the very beginning of a long and difficult recovery,” he said. “And there is tremendous uncertainty about what impact a resurgence of new Covid-19 cases in key markets could have.”
American will drop flights from Philadelphia to Berlin; Dallas-Fort Worth to Munich; and Los Angeles to Hong Kong and Beijing; among others. It also won’t begin four international routes that had been planned for next year.
The Fort Worth, Texas-based airline will shift the focus of its Los Angeles hub to domestic flights instead of ones to Asia and South America. American also will seek government permission to move its Los Angeles-Shanghai route to Seattle.
Growth to India and Asia will be based in part on an alliance announced earlier this year with Alaska Air Group Inc. American will keep plans to add service from Seattle to London and Bangalore, India, next year. American also will continue to fly to the hubs of joint business partners, including British Airways Plc, and expects to operate a full schedule to London Heathrow by 2021.
Miami will remain the hub for flights to the Caribbean, Latin America and South America. Philadelphia will continue as the main location for trans-Atlantic flights, once European travel restrictions are lifted.
American also will discontinue:
- Charlotte, North Carolina, to Barcelona, Rome and Paris
- Los Angeles to Buenos Aires and Sao Paulo
- Miami to Milan and Brasilia
- Chicago to Venice, Italy
- Philadelphia to Budapest and Dubrovnik, Croatia
The scrapped routes that had been planned for next year are:
- Philadelphia to Casablanca, Morocco
- Chicago to Prague, Budapest and Krakow, Poland
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