- American Airlines announced a new flight schedule in response to low demand for flights
- The new flight regime will start as of Monday, March 16 and will last until May 06
- American stock price fell more than 75% in the last two years to trade at the lowest levels since 2013
American Airlines (NASDAQ:AAL) yesterday announced a new flight regime which will assume cuts in international flights by 75% as a response to the low demand amid the coronavirus outbreak.
Fundamental analysis: Collapse in demand
American Airlines, one of the major major airlines in the United States, announced it is forced to cut international long-haul flights by 75% amid collapse in demand. The company said it will continue to have two weekly flights to London and three to Tokyo.
“This change is in response to decreased demand and changes to U.S. government travel restrictions due to coronavirus (COVID-19),” American said in a press release.
“In addition to the international changes, the airline anticipates its domestic capacity in April will be reduced by 20% compared to last year and May’s domestic capacity will be reduced by 30% on a year over year basis”.
Short-haul international flights to Mexico, Canada, the Carribean, and Latin America will continue as scheduled.
“Given the decrease in demand related to COVID-19, American has requested temporary relief from this usage requirement — otherwise known as requesting a slot waiver — to better align capacity with demand without the risk of losing valuable takeoff and landing slots for the future,” it is added in the statement.
Delta, another major U.S.-based airline, said on Friday it would cut capacity by 40% in the next few months.
Technical analysis: 75% of market value wiped off
Shares of American Airlines have dropped more than 75% in the last two years, on the combination of flight cancellations, due to Boeing 737 Max grounding, and the coronavirus outbreak.
The latest push lower, fueled by the coronavirus outbreak, has seen the price action push through the key horizontal support near the $25 mark. Furthermore, the price penetrated the next support level just above the $15 handle to hit the 7-year low.
One of the last supporting zones is located near the $11 mark.
American Airlines announces cuts by 75% in long-haul international flights due to collapse in demand amid the coronavirus outbreak. The company will keep flights to London and Tokyo, while the domestic and short-haul flights will continue.
American stock price traders at a 7-year low as a result of the Boeing 737 Max crisis and the recent coronavirus outbreak.