DALLAS (AP) — Shares of American Airlines posted a record percentage gain Thursday after the carrier said it will aggressively add back flights in July — a bet that the slow recovery in air travel will gain speed this summer as states re-open their economies.
American said it plans to operate 55% of the U.S. flights that it ran in July 2019. That would a huge increase over the 20% schedule that American ran in April and May.
Overseas trips are expected to recover more slowly. American will operate just 20% of the international flights that it ran last July.
American could still cancel many July flights right up until departure time, but investors appeared to regard the planned schedule as a sign of confidence that air travel is coming back.
Shares of American Airlines Group Inc., which is based in Fort Worth, Texas, rose 41% to close at $16.72. That’s the stock’s biggest one-day percentage gain since the current company was formed by a 2013 merger with US Airways.
Other airline stocks were carried along in American’s slipstream, although they rose by smaller percentages. The stocks have been battered this year, and American’s shares are still down 42% in 2020.
American is adding flights to Florida, mountain states and other vacation destinations, indicating that leisure travelers are returning faster than people flying for business.
Bookings are still down everywhere, but they are down 80% in the Northeast compared with about 40% in states such as Texas and Florida that have reopened more of their economies, said Vasu Raja, American’s senior vice president of network strategy.
“If you’re a leisure customer, you know you can go to Florida and the hotels will be open, the restaurants will be open,” he said. “You’re unclear if that will be the case if you go to California.”
In April, restrictions aimed at curbing the spread of the new coronavirus caused air travel to plummet to levels not seen since the 1950s. Some days, fewer than 100,000 people passed through U.S. airport security checkpoints. The numbers have grown steadily since then, to roughly 300,000 people a day, but that is still nearly 90% below last year’s figures.
American has seen the same trend. At the end of April, it was carrying only 32,000 passengers a day. By the end of May, that had risen to 110,000 — still a tiny percentage of pre-pandemic crowds.
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