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US Airways and American Airlines announce job cuts; GOL and TAM take a dive

All North and South American carriers, except for Expressjet (+0.7%), saw drops in their stock prices on Wednesday (28-Oct-2009), as the wider market fell, with the Dow down 1.2% at the end of trading. The AMEX Airline Index fell 4.8% as a result, despite a fall in oil prices (-2.6%), to USD77.46.

US Airways announces plans to realign operations

US Airways (-0.3%) announced plans to realign its operations to focus on the airline's core network strengths, which include hubs in Charlotte, Philadelphia and Phoenix, and a focus city at Washington's National Airport. The carrier will make the following changes to facilitate the realignment strategy:

The carrier will also reduce its staffing by approximately 1,000 positions during 1H2010, including approximately 600 airport passenger and ramp service positions, approximately 200 pilot positions and approximately 150 flight attendant positions.

American Airlines also planning job cuts

American Airlines (-7.8%) also announced plans to cut jobs, stating it plans to cut up to 700 positions from its maintenance and engineering operations, in line with its smaller fleet. In line with the job cut plans, American Airlines plans to wind down operations at its Kansas City Maintenance Base in 2010, after closing the base in Sep-2009. Operations at other locations, including in St Louis, will also be downsized. The carrier stated it will offer “voluntary separation offers” for unionised staff.

The carrier also revealed during trading it has hired Rothschild to assist in acquiring a small stake in Japan Airlines, following similar moves by Delta Air Lines (-5.9%).

BTS reports 13% drop in average fare for 2Q2009

The US Bureau of Transportation Statistics (BTS) reported average domestic fares in 2Q2009 fell to their lowest second quarter level since 1998, dropping 13% year-on-year in the largest year-to-year decline on record.

While fares in 2Q2009 fell to the same level as in 2Q1998, overall prices measured by the inflation rate rose 32.3% during the period. In the 14 years from 1995, the first year of BTS records, fares rose 1.5% compared to a 41.4% inflation rate.  From 2001, fares declined 8.3% compared to a 21.2% inflation rate increase.

TAM and GOL take a dive

TAM (-8.8%) and GOL (-8.1%) stocks meanwhile took a dive on Wednesday, as the Bovespa fell 4.8%.

North & South America selected airlines daily share price movements (% change): 28-Oct-09