Dow Jones Gerard Arpey, chairman and chief executive of AMR Corp, parent of American Airlines, said Thursday that the carrier will cut more seat capacity this autumn, as the airline continues to face significant economic challenges.
The Fort Worth, Texas-based airline will make slightly more reductions on international routes than domestic flights, Arpey said during a presentation in New York at the Bank of America-Merrill Lynch Global Transportation Conference, which was webcast.
Overall, the airline now plans to cut 2009 domestic capacity by 9%, and international capacity by 4.5%, compared with 2008.
With the recession weighing on global passenger traffic, "the cuts we implemented last year have been helpful, and as a result, we did not make major changes to our summer schedule, Arpey said But looking forward, we think an adjustment to our fall schedule is warranted, so we are making additional cuts beginning in late August.
Arpey said that, despite tough economic times, the airline will continue with plans to refresh its fleet with newer, fuel-efficient aircraft.
Also making a presentation at the conference, Greg Taylor, senior vice president of corporate planning and strategy at United Airlines, a unit of UAL Corp. (UAUA), said the airline currently doesn't plan to cut more flights, but is ready to do so if needed. A year ago, the airline announced hefty capacity cuts, trimming U.S. routes by 17% and grounding dozens of aircraft. In March 2009, the airline announced a 15% cut in international service.
As reported earlier, Chicago-based United has sent out proposals to aircraft makers with an eye toward buying new planes. While United hopes to reach a deal this autumn, the company has plenty of time to decide on replacement aircraft, Taylor said. "In five to 10 years from now, about half our fleet will hit 25 years" in age, and will need to be replaced, he said.
United recently completed upgrades in premium-class cabins, while reducing the number of business-class seats. Now the airline is mulling makeovers in coach class, Taylor said. "We continue to look at opportunities to improve coach seats with a new product."
