Improving demand: American Airlines, United add flights as demand recovers from virus

Marco Green
June 6, 2020

The announcements boosted airlines shares, with American leaping 41.1 percent to end the day at $16.72, and United gaining 16.2 percent to $39.10. 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 worldwide travel could remain depressed for around three years. American Airlines announced that it will be adding more domestic flights for the upcoming months.

Citing increased interest from consumers in USA states that have reopened more quickly from the restrictions imposed to contain COVID-19, American will fly 55 percent of its domestic schedule in July and almost 20 percent of its global schedule.

"As an airline, we've consciously bet on demand coming back".

The airline also increased frequency of flying to Asheville, North Carolina (AVL), Savannah, Georgia (SAV), and Charleston, South Carolina (CHS) for business and leisure travellers.

By comparison, American flew just 20 per cent of its domestic schedule in May and is flying 25 per cent in June, said Vasu Raja, American Airlines' senior vice president of network strategy. "We have bet the economy", Mr Raja said, noting American has been operating a larger schedule than United States rivals.

In Europe, Iberia - part of the International Consolidated Airlines Group - told customers on Thursday it is starting a schedule of regular flights from Spain in July as a first step to building back a full service. That is still down from the peak 6,800 daily flights before the crisis. The July figure is equivalent to 40 percent of capacity a year earlier, compared with 30 percent in June, the airline said on Thursday.

Airlines from America to Australia are ramping up flights in June and July, with US carriers targeting the great outdoors.

Compared to the spring, American is increasing frequency of flying from hubs, including Dallas Fort Worth International Airport (DFW) and Charlotte Douglas International Airport (CLT) to destinations customers are searching and booking most, with increased flying to major cities in Florida, Gulf Coast cities as well as mountain destinations. According to a press release on its website, American Airlines will be flying "more than 55 percent of its July 2019 domestic capacity in July 2020".

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