American Airlines to cut seat capacity further on international and domestic routes in late August 2009

American Airlines has decided to reduce seat capacity further on international and domestic routes in late August 2009.

The carrier said in a statement that it was resorting to this step as it “continues to face significant economic challenges.”

In the statement, American Airlines, based in Fort Worth, Texas, the United States, and a subsidiary of AMR Corporation, explained that the airline would make a little more reductions on international routes than on domestic routes.

Gerard Arpey, chairman and chief executive of AMR Corporation, said in a presentation at the Bank of America-Merrill Lynch Global Transportation Conference in New York that American Airlines, overall, planned to slash international capacity by 4.5% and domestic capacity by 9% in 2009 compared to 2008.

However, Arpey added that American Airlines, despite the tough economic situation worldwide, would go ahead with its plans to “refresh” its fleet with new, fuel-efficient planes.

He defended the additional cuts in capacity by saying that the reductions that American Airlines had carried out in 2008 benefited the company and, as a result, the company did not have to make major changes to its summer schedule.

According to Gerard Arpey, advance bookings through August 2009 were down by around 2 percentage points from 2008, which he blamed on the drop in demand for air travel resulting from the global financial depression as well as the outbreak of the A(H1N1) flu.

Meanwhile, in a message to the employees, Jeff Brundage, American Airlines’ senior vice-president of human resources, said the cut in flights would lead to less number of jobs.

Brundage said that about 1,600 jobs would be affected for the time being, which includes reductions announced earlier.

Jobs in the departments of airport services, cargo service and flight service would be affected. At present, the airline estimates that the job cuts could come to 40 posts at American Airlines’ Kansas City base, 300 posts in airport services, 50 jobs in cargo service, and nearly 1,200 posts in flight service.

American Airlines said that it had 67,000 employees as of March 31, 2009 – which was down from 71,800 employees on March 31, 2008, and 97,800 employees on March 31, 2002.

It may be noted that, on June 11, 2009, Delta Air Lines, headquartered in Atlanta, Georgia, the United States, and the biggest airline operator in the world, had announced additional cuts in capacity on the carrier’s international routes.

The routes that Delta suspended include its service from Atlanta to Shanghai in China and Seoul in South Korea; from Cincinnati to Frankfurt in Germany and London’s Gatwick Airport; and from New York to Edinburgh in Scotland.