American Airlines to Put Most Jets Back in Service as Travel Rebounds
(Bloomberg) -- American Airlines Group Inc. expects to put most of its fleet back in service in the second quarter following “recent strength in domestic and short-haul international bookings” that hint at a gathering travel rebound.
Falling infections and hospitalizations and rising vaccinations have spurred demand after a blow early this year when the U.S. required negative coronavirus tests for international travelers, American said in a regulatory filing Monday. The seven-day average of net bookings on March 26 was about 90% of the 2019 level and domestic flights are 80% full, the company said.
American’s upbeat assessment underscored recent progress against a pandemic that caused an unprecedented decline in travel last year. Earlier this month, the carrier reported “what looks like the beginning of a very large uptick” in demand. American on Monday projected that strong bookings would continue into the second quarter, but cautioned that visibility was limited.
“Despite some areas of Europe going under new lockdowns and the U.S. CDC still advising against unnecessary travel, the recovery is in full swing,” Andrew Didora, an analyst at Bank of America Corp., said in a report. Airline bookings are “seeing a more pronounced improvement since early February, led by leisure.”
As if to underline the uncertainty facing the travel recovery, however, U.S. airline stocks fell as Rochelle Walensky, head of the Centers for Disease Control and Prevention, pleaded with Americans to wear masks and stick with Covid-19 measures.
“I’m going to reflect on the recurring feeling I have of impending doom,” Walensky said at a press briefing. “We have so much to look forward to, so much promise and potential of where we are and so much reason for hope, but right now I’m scared.”
American slipped 1.3% to $22.63 at 2:37 p.m. in New York, the shallowest decline on a Standard & Poor’s index of major U.S. carriers. The shares had climbed 45% this year through March 26, the most on the industry stock gauge.
The Fort Worth, Texas-based company parked 22 Boeing Co. 737-800 jets and at least 15 regional planes as demand sagged last year, and permanently retired 158 aircraft from its fleet. American operated 1,399 planes at the end of 2020, before reactivating any stored aircraft.
The demand outlook for long-haul international flights is also cloudy. Much of Europe is lagging behind the U.S. in vaccine distribution, and some countries have recently imposed more restrictions on movement and gatherings.
First-quarter system capacity will be down 40% to 45% from the same period in 2019, American said. That represents a slight improvement from the airline’s previous outlook of down 45%.
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