AA Warns of More Cuts

[Wretched Wrench]

American Airlines warns of more cuts
Hubs, routes, maintenance all under scrutiny
By August Cole, CBS.MarketWatch.com
Last Update: 3:31 PM ET July 1, 2003


SAN FRANCISCO (CBS.MW) -- American Airlines said Tuesday that it is continuing to assess its route and hub structure as the world''s largest airline navigates a historic industry downturn with fewer planes in the air.


So far, Fort Worth, Texas-based AMR Corp., parent of American, has been in discussions with officials from cities where the carrier currently operates. The talks have centered on the tough decisions American must make as it plots a course toward sustainable profitability, the company said in a statement.

The company did not give a specific time frame for any review but some sort of decision is expected soon.

The reality is we will not be able to fly every nonstop route we fly today, nor will we be able to provide the same level of service in markets that cannot profitably support our current flight schedule, said CEO Gerard Arpey.

At the halfway point for the 2003 financial year, American is reviewing its flight operations in Chicago, Dallas/Forth Worth and St. Louis; maintenance work in Fort Worth, Kansas City, Mo. and Tulsa, Ok.; as well as eight reservation offices in the U.S.

Shares of AMR (AMR: news, chart, profile) were last down 29 cents to $10.71.

August Cole is spot news editor at CBS.MarketWatch.com in San Francisco.

 

[AirplaneFan]

Well we all know that AA won''t abandon any of its flights out of LGB
. They all must be making money.

 

[WingNaPrayer]

and officially to employees AA says . . .

American is announcing today that it is nearing decisions about its network and infrastructure as part of the Turnaround Plan unveiled in May. Designed to ensure AA can "Lower Costs," "Fly Smart," "Pull Together, Win Together," and "Build A Financial Future," this network and infrastructure review includes examining everything from the performance of key routes and the space AA occupies at major airports to the structure of its midcontinent hubs at Chicago, Dallas/Fort Worth and St. Louis. The previously announced fleet plan calls for 57 fewer planes than a year ago and a reduction of another 57 planes from the network by next summer. AA is reviewing where the remaining flying can generate maximum revenues. Additionally, AA is looking at the efficiency of its other major facilities including its eight domestic reservations offices and three major maintenance bases. As part of the review, AA has been meeting with business, community and political leadership in cities where it flies or has major bases of operation. Decisions based on the review will be coming shortly.

*****
You can''t say you weren''t warned. None of these "cutbacks" are going to stop until that stock starts paying a dividend again.

 

[LambertMan]

Oh god....

I would have to assume make that most of the cuts would be going to STL. As AA loses more and more money, STL becomes more vunerable and less important to the AA structure. I really feel they are going to eventually get it tear it down to the size of say, NW@MEM, DL@DFW, or CO@CLE, and who knows maybe they will completely dismantle it. This is just my negative outlook on these things, nothing has gone well at STL lately.
I really don''t want them to keep STL as a second tear hub, I would rather them leave completely and keep MIA, DFW, and ORD and let another carrier come in and try and fill the void.
But who knows, maybe I am getting ahead of myself. But here is my bet if they are serious about these cuts and they are as major as I think they will be...
STL loses many of their S80 routes that are in a close range (500 miles?). The D concourse at STL goes completely RJ. And worst, LGW possibly axed. HNL is not endangered, its sold out constantly.
DFW loses flights here and there, but not many. ORD sees marginal cuts also.