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American Airlines is preparing to cut service to up to 30 small and midsize U.S. destinations.
The move, first reported by CNBC, was confirmed to Travel Weekly on Thursday by a source familiar with the carrier’s thinking.
Under the Cares Act, airlines must currently petition the Department of Transportation for permission to stop serving a destination. American received $5.8 billion in Cares Act payroll support, part of the $25 billion doled out by Treasury pursuant to the legislation.
The grants, however, are slated to expire on Sept. 30, along with Cares Act stipulations on maintaining service to specific destinations.
Airline industry unions have lobbied in recent weeks for an extension of payroll grants through March. They’ve won the support of President Trump, a majority of the House and at least 16 Republican senators. However, the possible extension is bogged down in the broader deadlock between Democrats and Republicans over a new Covid-19 stimulus package.
If nothing changes, American could prove to be just the first U.S. airline to reveal plans to cut cities from its network. U.S. carriers have already issued a surge of formal warn notices to employees ahead of potential furloughs and layoffs beginning Oct. 1, when they expect to quickly downsize to align with travel demand that has stagnated at approximately 25% of last year. United and American alone have issued a combined 61,000 warn notices.
In prohibiting airlines from removing cities from their route networks as part of the Cares Act, Congress sought to maintain air connectivity in smaller U.S. markets even as airlines slashed their overall flight schedules.
A DOT spokesman said Thursday that it has not proposed extending those minimum service obligations beyond Sept. 30 but will monitor ongoing access by the public to the national air transportation network
“The Department is also prepared to implement any new provisions of law in this area if enacted by Congress,” the spokesman said.
Source: travelweekly.com
