Photo Credit: American Airlines aircraft at the airport American Airlines / American Airlines
American has made some capacity cuts, but they’re much more modest compared to that of its chief rivals Delta and United. Executives at the carrier said they were taking a more conservative approach to cuts due to volatility around fuel prices.
LinkedIn X Facebook Email Gift What specific premium products or hub changes is American planning to drive its turnaround? How much of American's underperformance versus Delta and United is due to strategy versus fuel exposure? Why is American confident that expanding capacity will pay off when competitors are cutting? Select a question above or ask something else
As the airline industry grapples with highly volatile fuel costs, carriers are either cutting capacity more aggressively or raising airfares.
But American Airlines is taking a different approach. In the second quarter, capacity for American was up 5.4%, and in the third quarter, it projects capacity will be up between 3% and 5%.
Cutting capacity typically gives airlines more pricing power, pushes up yields and load factors, and offsets fuel costs. And while American’s second-quarter earnings beat Wall Street expectations and it reported a profit of $71 million, the carrier still lagged behind Delta and United, which both reported profits of $1.6 billion and $805 million, respectively.
Even though American is flying more seats, executives defended the dec
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Tags: american airlines , earnings , jet stream
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