American Airlines halting service to 15 small cities after federal aid runs out in October

Key Points
  • American is suspending service to 15 small U.S. cities in October after the terms of federal aid requiring the flights expires.
  • American is the only airline providing scheduled, commercial service to nine of them.
  • Airlines have pushed for additional federal aid but Congress has yet to reach a deal for a new pandemic relief package that would include another round of support to carriers.
A member of a ground crew walks past American Airlines planes parked at the gate during the coronavirus disease (COVID-19) outbreak at Ronald Reagan National Airport in Washington.
Joshua Roberts | Reuters

American Airlines said Thursday it plans to suspend service to 15 small U.S. cities with low demand in October after the terms of federal aid requiring the flights expires, a move that would cut off scheduled flights to nine destinations in as many states.

American and the other U.S. passenger carriers that accepted portions of $25 billion in federal payroll support were required to maintain minimum levels of service through Sept. 30.

American is currently the only carrier offering scheduled service to nine of the airports where it plans to suspend flights. They are:  Del Rio, Texas; Dubuque, Iowa; Florence, South Carolina; Greenville, North Carolina; Joplin, Missouri; New Haven, Connecticut; Roswell, New Mexico; Stillwater, Oklahoma and Williamsport, Pennsylvania.

American also plans to suspend flights to these airports: Sioux City, Iowa; Kalamazoo/Battle Creek, Michigan; Huntington, West Virginia, New Windsor, New York, Springfield, Illinois;  Lake Charles, Louisiana. 

American said it advised the affected airports before its Thursday announcement.

American Airlines cuts services in 15 smaller and mid-sized markets
American Airlines cuts services in 15 smaller and mid-sized markets

"We really had no inkling or forewarning that this was ever in consideration," said Steve Stockam, manager of the Joplin Regional Airport.

"It's obviously a huge impact for our community because American is the only airline here," Stockam said.

Stockam said he was hopeful that the flights would be restored before the Thanksgiving and Christmas holidays so locals can "get to where they need to go."

Airline labor unions and executives from carriers including American have urged lawmakers to provide another $25 billion in payroll grants and loans to airlines. While the initiative has gained bipartisan support in Congress, lawmakers have failed to reach a deal for another national coronavirus aid package that could include the additional airline aid.

That aid package was meant to help preserve airline employee jobs and prohibited layoffs until Oct. 1. But demand has only recovered to less than a third of normal summer volumes and airlines have warned more than 75,000 employees that their jobs are at risk when the aid terms expire.

American had been preparing to cut service to as many as 30 cities, CNBC first reported last week. The cuts take effect on Oct. 7 through Nov. 3. The airports were selected because they have attracted little demand and aren't likely to rebound in the near term, according to a person familiar with the matter.

Air travel demand has plunged because of the pandemic as concerns about the virus and travel restrictions keep many would-be customers away. The number of people flying has increased from more than five-decade lows hit in April but remains weak for the peak summer season.

Federal data show the Transportation Security Administration screened an average of 708,684 people a day this month, down 71% from a year ago.

Delta Air Lines and United Airlines didn't say whether they were planning on similar cuts after the aid expires. Southwest Airlines said it's not currently preparing to suspend service because of the expiration, but the carrier is lowering its September capacity to 40% of last year's level and in October it will fall to 50% of the same month in 2019.

American's shares fell 1.4% Thursday to $12.50. Delta's fell 0.2% to end at $27.62, while United's dropped 1.1% to $34.05. Southwest added 0.6% to close at $34.46.

Global air traffic levels could return to 2019 standards by 2023: BofA Securities
Global air traffic levels could return to 2019 standards by 2023: BofA Securities