American Airlines restarts $205mn projects at Dallas hub

American Airlines (AA, Dallas/Fort Worth) will resume USD205 million worth of mothballed projects at Dallas/Fort Worth after a faster-than-anticipated upswing in travel demand, The Dallas Morning News reported. American put more than USD1 billion in projects on hold for 2020 and 2021 after losing USD8.9 billion in 2020 as nationwide air travel dropped by 60%. This included a USD100 million flight kitchen and a USD100 million parts warehouse at Dallas/Fort Worth initially announced in late 2019. However, in a recent regulatory filing, it said it planned to reinstate most of its fleet to service in anticipation of a surge in air travel demand this summer, after noting that its seven-day moving average of net bookings was back to 90% of 2019 levels as of March 26. The carrier said on March 31 that it had also repaid – in full – USD2.8 billion of revolving loans which it had borrowed from 18 lenders in April 2020 in response to the pandemic and its impact on the demand for air travel. The airline, the newspaper said, had consequently reworked its lease for two projects at Dallas/Fort Worth, which would see the airport finance the projects at a cost of about USD2.7 million for American in the first year of the deal. “They asked us to front the cost due to our lower borrowing cost,” Jeff Benvegnu, director of airport real estate, explained at a recent board committee meeting. American is looking at the new flight kitchen to replace a 1982 building that is too small to support the airline’s growing operations at its largest hub. Airport officials said that catering backups had caused more than 2,300 flight delays in summer 2019. The parts warehouse has been proposed to help American’s maintenance operations and to more efficiently dispatch spare parts to airports across the country. This will help aircraft resume operations faster and reduce delays and cancellations.