American Airlines Slashes October Schedule

American Airlines said it will cut its October flight schedule by 55%, compared with October last year as demand for air travel remains depressed due to the Covid-19 pandemic. American's domestic schedule will be 48% smaller in October compared with 2019, and its international schedule will be 68% smaller, a spokeswoman for the airline said.

But American is reallocating its capacity to meet demand where it is. The airline is adding nine seasonal flights from the U.S. to Mexican beach destinations, and it's adding new Florida and Phoenix flights from several northern cities.

This move is not surprising. In a letter to employees last week, CEO Doug Parker and President Robert Isom warned that the company could lay off or furlough as many as 19,000 employees on Oct. 1 when the CARES Act's payroll support expires. "It was assumed that by Sept. 30, the virus would be under control and demand for air travel would have returned," they wrote, adding that demand now suggests the airline will result in the airline being 50% smaller in the fourth quarter.

American expects to have 40,000 fewer employees total after Oct. 1, when employees taking voluntary separation offers are added to the projected number of involuntary furloughs.

Parker and Isom are urging Congress to consider a "clean extension" of the payroll support program to prevent massive airline-industry layoffs. News broke last week that the White House is considering executive action to address the issue, but how much room it has to act without Congressional approval remains uncertain. Further fiscal aid remains snarled in Congress, and it is unclear how much political will there is for further negotiations. Although more airline aid has the broad support of management and labor groups, some industry analysts have argued that another bailout will keep the industry too large to match demand.

American earlier this month said it would axe flights to 15 smaller markets altogether.