American Airlines’ Strategy Amidst Surging Demand

American Airlines to Cut About 1% of Flights

American Airlines (AAL) is scaling back the number of flights it offers, despite surging demand. This is to avoid logistical strains during what is expected to be a very busy summer for airlines. The air carrier was among the first to add flights to meet pent-up demand, but now it is trimming about 1% of its offerings, or 950 flights.

Adding more flights quickly makes it harder for airlines to solve problems when something goes wrong. Two summers ago, American Airlines was hit with bad weather and a labor dispute which caused significant logistical headaches for the company. Despite high demand for flights, American Airlines has decided it would rather offer fewer flights than deal with another summer of unhappy passengers and scheduling difficulties.

Avoiding Mistakes of the Past

Earlier this month there were several storms which caused delays and cancellations at some of the country’s largest airports. That played a role in American Airlines’ decision to reduce its flights so the airline will be more nimble if and when it needs to manage problems. Additionally, vendors who supply airlines with everything from food to wheelchair services are short-staffed as demand surges. American Airlines is concerned this could hamper operations and frustrate customers—another reason why it is scaling back its offerings.

A reduced number of flights also gives American Airline access to a larger pool of pilots when needed. Over the weekend the company was forced to cancel flights due in large part to a shortage of pilots, something it hopes to avoid in the future.

Still Flying High

Despite the reduction in flights, American Airlines is flying much more than its rivals, including United Airlines (UAL) and Delta Air Lines (DAL). Its planned flight schedule for July is 20% larger than the schedules of Delta and United. The flights being cut are in markets where there are several options to accommodate American Airlines customers.

With demand surging amid easing pandemic restrictions, the airline industry has been rapidly adding more flights. American Airlines’ decision to scale back the number of flights is an acknowledgment of the potential for logistical difficulties during a time of big changes for the industry. The decision may reduce sales in the short term, but American Airlines’ leadership believes it is the right choice in the long term from a customer-experience standpoint.

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ABOUT Meg Richardson Meg Richardson is a writer specializing in markets, technology, and personal finance. She loves breaking down seemingly complex ideas and making them readable and interesting for everyone. She holds an MFA in writing from Columbia University. When she is not writing about finance, she enjoys running in Central Park and drawing cartoons.

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