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American Airlines is Adding Back Capacity as Demand Returns

By Howard Smith – Jun 4, 2020 at 8:55AM

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After seeing increased customer demand in May, American plans to be at 55% domestic capacity in July.

American Airlines Group (AAL -1.71%) is gearing up for a busier summer flying season after seeing improving demand in May. The airline announced that it now plans to fly 55% of its domestic schedule and 20% of international flights in July, compared to last year's capacity. This comes after data from May flights showed a jump of 71% of average daily customers versus April. 

A week ago, it was reported that the airline was planning cutting more than 5,000 managerial and administrative staff as it planned on "rightsizing the airline and its cost structure." Today the airline said, "we're seeing a slow but steady rise in domestic demand. After a careful review of data, we've built a July schedule to match."

airplane taking off with sun rising in background

Image source: Getty Images.

The airlines July flight schedule marks the lowest year-over-year capacity reduction it has seen since March. Data provided by the company showed that its average load factor increased from 15% in April, 2020, to 41% in the first three weeks of May, to 55% in the last week of the month. International demand has been slower to return, though, and it said it was going to delay the return of some previously announced international routes until August. 

The company is also offering incentives in a "Summer of Deals" promotion that includes doubling frequent flier mileage for flights booked during June for travel prior to Sept. 30, 2020. The airline is also trying to boost customer confidence by focusing on cleaning and distancing procedures. In its Admiral Club lounges, the company said it was adding foot-operated doors for touchless access to restrooms, new plexiglass shields, sanitizer stations, and signage for proper distancing. 

Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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