American invests in hubs, hires thousands as travel rebounds

American Airlines (AA, Dallas/Fort Worth) continues to invest in its hubs and plans to bring back thousands of employees and hire thousands more as the airline rebounds from the COVID-19 dive in travel.

In response to increasing travel demand, the airline expects to open three new gates at Charlotte Int’l before the end of the year in addition to the four it had opened there in February 2020 just before the pandemic, bringing its total number of gates at the airport to 94, reports the Charlotte Observer. American also recently opened four new gates at its largest and most profitable hub at Dallas/Fort Worth and expects to operate a larger domestic network from there this month, compared to August 2019. It has also opened a new concourse at Washington National, which has allowed it to up-gauge the hub to larger aircraft.

Speaking on a recent earnings call with financial analysts, chief executive Doug Parker said American served 44 million passengers on nearly 470, 000 flights in the second quarter of 2021 – more than five times the number of passengers and more than two-and-a-half times the number of flights it had carried in the same quarter in 2020 “We’ve ramped up the operation dramatically in response to customer demand, and our operational performance continues to improve as we grow in scale,” he said.

“The recovery is happening,” remarked president Robert Islom. “This quarter, we rebuilt the operations up from pandemic-level flying, effectively adding an airline the size of the old US Airways over the course of just a few months.”

He said American was bringing back 3,000 employees from leave and hiring nearly 3,500 new staff, included 350 pilots this year, and more than 1,000 pilots and 800 flight attendants next year.

Still, the airline reported a net loss of USD1.1 billion for the second quarter of 2021, but Parker noted it was the smallest since the start of the pandemic as demand for air travel continued to improve. “Our revenues in the quarter were 87% higher than they were just last quarter. Importantly, while we’re producing industry-leading unit revenues, we’re also controlling our costs. We expect our losses to narrow even more in the third quarter as we continue to march back to sustained profitability,” he said.

In addition, said Parker, American had entered the second quarter with more than USD21 billion of total available liquidity, the highest in its history. “We generated a cash build in the quarter for the first time since the pandemic. With this record liquidity and our confidence in the future, we’ve begun the de-leveraging of American’s balance sheet.” He said the airline had already prepaid the entirety of its USD950 million spare parts term loan, which was scheduled to mature in April 2023. “We’ve reshaped our networks, simplified our fleet, and build efficiencies into the business that will serve us well for years to come,” he concluded.

Robert Isom, the president of American Airlines Group and American Airlines, said AA’s second-quarter passenger revenue more than doubled sequentially to USD6.5 billion as demand surged. Leisure demand continued to outperform, and in many areas, had surpassed 2019 levels. As vaccinations increased, business travel has also started to return and forward bookings in key business markets were ahead of 2019.

Long-haul international travel was still expected to recover slower as travel restrictions and quarantine requirements remained in place in many countries, Isom said. However, demand for travel to Europe had increased considerably in recent weeks with the reopening of the European Union, he noted.