[ News ]October 8, 2020 10:14 am ET
By John McDermott
American Airlines Halts Routes After CARES Expiration
American Airlines has announced drastic service cuts for the month of November. Bookings for the month are sitting at around a quarter of where they were last year, and American — along with the other two legacy carriers in the U.S. — has been forced to drop unprofitable routes.
The announcement is highlighted by American’s halt on services to eleven small cities, including Del Rio, Texas; Dubuque, Iowa; Florence, S.C.; Greenville, N.C.; Huntington, W.V.; Kalamazoo, Mich.; Lake Charles, Louisiana; New Haven, Conn.; Newburgh, N.Y.; Springfield, Illi. and Williamsport, Penn. The CARES Act’s expiration lifted requirements that American — and other U.S. airlines that took grants — serve all of the destinations previously on its route map, opening the door for the airline to drop the cities.
American had originally planned to cut 15 cities, but public support for flights in Roswell, N.M. and Stillwater, Okla. as well as delayed U.S. Department of Transportation approval to cut routes to Joplin, Mo. and Sioux City, Iowa put a hold on four services being cut.
“[Cutting services is] the last thing we want to do,” American Airlines CEO Doug Parker said, per The Points Guy, as the CARES Act deadline approached. “We like to serve markets, we like to fly airplanes and keep our people employed but there’s not enough demand there.”
Airlines and their labor unions were long advocating for a CARES Act extension that could have saved these routes before the Sept. 30 deadline passed, but Congress failed to agree on details of a stimulus package that would’ve likely included an airline industry bailout. On Tuesday, U.S. President Donald Trump announced he would stop negotiating the terms of a larger stimulus package until after the U.S.’s general election on Nov. 3.
American will fly about 44% of its November 2019 schedule next month. That’s lower than United’s planned 50% but still higher than low-cost rival Southwest’s planned 38% operation and legacy competitor Delta’s expected 29%.
Besides Thanksgiving weekend — usually dominated by business workers, students and extended families returning home for the holiday — and the holidays in late December and early January, the winter season is often defined by business travelers commuting to meetings or bases. Without that dependable business traveler, airline demand will likely remain sparse for months to come as a coronavirus vaccine is not expected to be approved by January or February at the earliest.
Airlines for America, a trade group that advocates for U.S. carriers, and the International Air Transport Association, aviation’s international governing body, join aviation analysts in anticipating a four-plus year recovery period before passenger counts pre-pandemic numbers.