American Airlines To Suspend Service To 15 Markets In October

(RTTNews) - American Airlines Group Inc. announced its decision to suspend services to 15 markets effective October. The move reflects weak demand as well as the expiration of the air service requirements associated with the Coronavirus Aid, Relief and Economic Security or CARES Act, the company said in a statement.

The airline continues to evaluate its network and plans for additional schedule changes in the coming weeks.

The company said the current suspensions will take effect on October 7, and are only in place for the October schedule period, which runs through November 3.

American Airlines plans to release its full, updated October schedule on August 29, and updated November schedule by late-September.

American Airlines, and several other airlines had cut flight schedules and fares over the past few months as the airline industry has been hard hit amid the rapid spread of the coronavirus and the related travel restrictions.

In March, U.S. President Donald Trump signed the $2 trillion coronavirus economic stimulus bill that included $25 billion in direct aid to the airline industry. In early July, American Airlines and four other airlines signed agreements with the U.S. Department of the Treasury on the federal loan terms under the CARES Act.

In late July, while reporting financial results for the second quarter, American Airlines had said COVID-19 and the resulting shutdown of the U.S. economy caused severe disruptions to global demand for air travel. It called the quarter the most challenging in American's history.

For the company, May and June revenue trends were encouraging, however, demand weakened somewhat during July as COVID-19 cases have increased and new travel restrictions have been put into place.

The company presently expects its third-quarter system capacity to be down approximately 60 percent year-over-year.

Last week, American Airlines extended its offer to waive change fees for customers who purchase tickets for travel, until December 31, 2020 in response to lower travel demand. This means that the travelers need not pay penalties for changing the origin and destination cities.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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