Slowly, the airline business is coming back to life as carriers set schedules for July that include more flights.
The latest is American Airlines, which says it plans to fly 55% of its domestic schedule in July, up dramatically from May when it flew 20% of its schedule from a year earlier.
“We’re seeing a slow but steady rise in domestic demand. After a careful review of the data, we’ve built a July schedule to match,” Vasu Raja, senior vice president of network strategy at American Airlines, said in a release announcing the airline’s schedule.
The optimistic outlook sent American shares surging Thursday. The carrier gained 41% to close at $16.72, the biggest one-day percentage jump since its merger with US Airways in December 2013. United gained 16% to $39.10, and Delta added nearly 14% to $32.38.
American is Increasing flights at a more aggressive pace than United Airlines, which is ramping up its July schedule to 25% of what it flew during the same month in 2019.
Still, all U.S. airlines are cautiously optimistic more people will book flights this summer because passenger levels have been steadily increasing. In April, American averaged 32,154 passengers a day. From May 1 through May 23, its daily customer level more than doubled to 78,178, then jumped to 110,330 a day from May 24 to May 29.
While the numbers are encouraging, passenger levels in the U.S. remain extremely depressed due to the Covid-19 pandemic prompting millions of Americans to cancel trips or avoiding booking flights. According to the Transportation Security Administration, the number of passengers and airline crew members screened at U.S. airports is down more than 85% from a year earlier.
Are airlines getting ahead of themselves and bringing back too many flights too soon? With carriers still burning through tens of millions of dollars every day, airline executives say they are being judicious in their planning. They are also quick to point out that more cities and states are opening up following Covid-19 lockdowns, so there is pent up demand to travel.
OAG, which tracks the airline industry and flight schedules, says the four biggest U.S. carriers — United, American, Delta and Southwest — are boosting their schedules in June by 27% from May. Most of that increase is due to additional domestic flights. As for international routes, the growth in flights has been much more gradual due to depressed demand.
“The industry is showing some signs of recovery, but there are noticeable changes in consumer behavior,” said John Grant, OAG’s senior aviation analyst. “People are booking later, seeking more flexibility in their travel bookings and not committing to payment until the last minute.”
Executives at the major airlines expect that demand below normal levels will force them to shrink.
American is cutting about 30% of its officer ranks, or about 20 positions, from retirements and open posts that won’t be filled, shuffling others, a spokesman said Thursday. The airline is offering early retirements and buyouts to management and administrative employees and last week said it would seek to reduce about 30% of those jobs, roughly 5,000 people. Airlines that took federal coronavirus aid are prohibited from laying off workers until Oct. 1.
The move comes less than a week after United said it would eliminate 13 of 67 officer positions.