American Airlines cuts capacity over economic woes
American Airlines has decided to cut its flight capacity by three percent this year and retire up to 11 Boeing 757 planes in 2012, in part because of the lingering economic malaise.
“While our advance bookings are generally in line with last year, we are taking these additional steps in light of the uncertain economic environment,” its chief commercial officer Virasb Vahidi said in a statement Monday.
Vahidi said the decision was also driven by fuel costs and additional pilot retirements expected in the fourth quarter of this year.
In July, the company announced the largest aircraft order in history, for 460 planes from both Airbus and Boeing, backed by $13 billion in manufacturing financing.
The retirement of the 11 planes is linked to the start of deliveries from the massive order, according to American.
The company’s fleet of more than 900 aircraft runs more than 3,400 flights per day out of 260 airports in more than 50 countries.
Rumors that American Airlines’s parent AMR Corp will file for bankruptcy protection sent the company’s stocks plummeting a week ago.
The company said there was no concrete news behind the rumors, but also said that a court-guided restructuring “is certainly not our goal or our preference.”
The company hemorrhaged pilots in August and September, with 200 retiring — eight times the normal level — fueling speculation about the financial health of the company.
The company and the pilots’ union have denied the wave of retirements is related to inside information, with the union saying it is more likely the result of general concerns about volatile global markets.