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:
- Reducing Las Vegas services from 64 to 36 daily departures by Feb-2010;
- Closing stations in Colorado Springs and Wichita;
- Redeploying the airline's 15 E-190 aircraft on routes between Boston-Philadelphia and on the Boston-LaGuardia leg of the US Airways Shuttle;
- Suspending five European destinations from the carrier's international gateway in Philadelphia:
- Seasonal service to Brussels, Belgium and Zurich, Switzerland will transition to year-round service in late 2010;
- Returning its Philadelphia-Beijing flight authority to the DoT until economic conditions improve, while retaining the option to reapply for this authority in the future;
- Rightsizing and repositioning its crew bases in Philadelphia, Charlotte, Phoenix and Washington, D.C. by closing crew bases in Boston, LaGuardia and Las Vegas. The Las Vegas and LaGuardia bases are expected to close on 31-Jan-2010, and Boston will close on 02-May-2010.
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.
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 (-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