American Airlines soars 41% as plan to add July flights sparks relief rally

By David Shepardson and Tracy Rucinski WASHINGTON/CHICAGO (Reuters) - American Airlines Group Inc shares jumped more than 40% on Thursday after announcing a big boost to U.S.

Reuters June 05, 2020 04:06:40 IST
American Airlines soars 41% as plan to add July flights sparks relief rally

American Airlines soars 41 as plan to add July flights sparks relief rally

By David Shepardson and Tracy Rucinski

WASHINGTON/CHICAGO (Reuters) - American Airlines Group Inc shares jumped more than 40% on Thursday after announcing a big boost to U.S. flights next month following dramatic cuts caused by the coronavirus pandemic, as well as some leadership changes to cut costs.

American shares ended up 41% at $16.72 on the bullish announcement in very heavy trading, though still down 45% since mid-February.

The stock had lost more than its peers due to its higher debt load and fears of a sluggish recovery. While analysts cheered signs leisure demand is picking up, they warned that business and international travel could remain depressed for around three years.

American, the largest U.S. carrier, also announced on Thursday the outcome of an early out program for management, saying 14 officers will be leaving the company.

"As we plan for a post- Coronavirus recovery, we know we will be living with the effects of the pandemic for some time," American Chief Executive Doug Parker said in a memo to employees.

Still, the airline will fly more than 55% of its July 2019 domestic capacity next month and also boost its international flights schedule, flying nearly 20% of its July 2019 schedule.

By comparison, American flew just 20% of its domestic schedule in May and is flying 25% in June, said Vasu Raja, American Airlines' senior vice president of network strategy.

"As an airline, we've consciously bet on demand coming back. We have bet the economy," Raja said, noting American has been operating a larger schedule than U.S. rivals.

Raja told Reuters the airline would fly just over 4,000 flights on peak days in July compared with nearly 2,000 on peak days in May. That is still down from the peak 6,800 daily flights before the crisis.

Other U.S. and foreign carriers are also adding flights to summer schedules as demand increases.

In total, American plans to fly 40% of July 2019 capacity, boosting flights from New York City airports, Los Angeles and Washington as well as its Dallas Fort Worth and Charlotte hubs. It is also increasing flights to major cities in Florida, Gulf Coast cities and mountain destinations as national parks and outdoor recreational spaces reopen.

American plans to resume service to additional European and Latin American destinations in August, and to Rio de Janeiro, Brazil, from Miami on July 7.

(Reporting by David Shepardson and Tracy Rucinski; Editing by Christopher Cushing, Steve Orlofsky and Tom Brown)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.