Despite what’s been a steady increase in airline traffic thanks to the ongoing vaccine rollout, we’ve seen a number of American airlines struggle to keep planes in the air. Whether that be due to technical difficulties on specific plane models or having to cut back on flights due to financial issues, airline companies haven’t recovered much in 2021. It’s a similar story with American Airlines (NYSE: AAL), which announced it had to cancel hundreds of flights amidst a variety of different issues.
American Airlines confirmed over the weekend that it would be canceling hundreds of flights over the weekend due to a few reasons. This includes staff shortages and maintenance problems, with the airline struggling to ramp up capacity back to pre-pandemic levels. Around 6% of the airline’s normal schedule, or around 180 flights, were canceled on Sunday. Additionally, it’s possible that more of these flights will end up being canceled throughout the rest of the week, or even throughout the rest of the month.
“The bad weather, combined with the labor shortages some of our vendors are contending with and the incredibly quick ramp up of customer demand, has led us to build in additional resilience and certainty to our operation by adjusting a fraction of our scheduled flying through mid-July,” said American Airlines spokeswoman Sarah Jantz in a statement. “We made targeted changes with the goal of impacting the fewest number of customers by adjusting flights in markets where we have multiple options for re-accommodation.”
American Airlines said that it plans to cut its long-term schedule by around 1% throughout the summer to help fix some of these problems. However, it’s not the only airline that’s been forced to make similar flight cancellations. Delta Air Lines (NYSE: DAL) also announced it plans to cut around 300 flights over the weekend as well, for similar reasons as American Airlines.
The airline industry has long been considered due for a massive bull run, given just how much airlines have suffered throughout 2020. However, most airline stocks have struggled even in 2021. Vaccine rollouts in many countries have been slower than anticipated, which hasn’t led to the explosion of air travel that many analysts expected there would be.
American Airlines is up around 1.2% in response to the news in pre-market trading. Shares of American Airlines are still up around 47% since the start of the year. However, other analysts are choosing competing airlines instead as their top picks. Wolfe Research analyst Hunter Keay upgraded both Delta and Alaska Air just before the weekend, thinking both stocks trading “bizarrely” cheap compared to their competitors like American Airlines. Although air travel might return back to normal at a slower rate than previously expected, most airline stocks are expected to do reasonably well going into the future.
American Airlines Company Profile
American Airlines is the world’s largest airline by scheduled revenue passenger miles. The firm’s major hubs are Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington, D.C. After completing a major fleet renewal, the company has the youngest fleet of U.S. legacy carriers. – Warrior Trading News
