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American Airlines (AAL) Boosts Summer Schedule on Higher Demand

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American Airlines Group (AAL - Free Report) is boosting its domestic and international schedules for summer as it is seeing “strong demand.” After being significantly suppressed for the most part of 2020, air-travel demand is improving in 2021 with Americans getting vaccinated and travel restrictions easing.  

American Airlines expects its summer domestic capacity to be more than 90% of 2019 level. Meanwhile, international capacity is anticipated to be 80% of summer 2019 level.

On the domestic front, the carrier plans to widen its connectivity to Orlando, FL, offering customers nonstop services from Birmingham, AL; Dayton, OH; Indianapolis, IN and Louisville, KY, among other places. These services will operate on Saturdays, beginning Jun 5. Among other services, the carrier will also launch widebody service from Miami, FL to Los Angeles and New York.

While “international demand has been slower to recover”, American Airlines said that it will continue to offer more flights to several destinations in Latin America and the Caribbean. From Miami, the airline will offer services to Cali, Medellin and Bogota in Colombia; Guayaquil, Ecuador; Lima, Peru; San Juan, Puerto Rico, and some other destinations, this summer. On the whole, the Fort Worth, TX-based company will operate more than 150 new routes this summer.

On Apr 13, American Airlines, carrying a Zacks Rank #4 (Sell), provided an investor update, wherein it stated that it had witnessed positive cash burn (on an adjusted basis) in March. This can be linked to the recent uptick in travel demand owing to increased vaccinations and easing coronavirus-led restrictions. Previously, United Airlines (UAL - Free Report) , carrying a Zacks Rank #3 (Hold), revealed that it generated positive average daily core cash flow in March due to acceleration in customer demand for travel and new bookings in the month.

Key Picks

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