American Will Shrink But Maintain Hubs, Says Executive in Earnings Call
By Harvey Chipkin
American Airlines will not eliminate any hubs even as it becomes a smaller airline as a result of the Covid-19 pandemic, said Vasu Raja, senior vice president of strategy, on the carrier’s first quarter earnings call. “We do not plan for mass scaled hub closures; in fact, our hubs are a massive asset,” Raja said. American’s largest hub is Dallas/Fort Worth, while others are in Charlotte, New York, Chicago, Miami, Los Angeles, Phoenix, Philadelphia and Washington. May capacity on the carrier will be down 80%, and American expects capacity to be down 70% in June. Raja said American is pursuing fleet simplification in lieu of reducing hubs. Having fewer aircraft types, he said, will reduce costs related to parts and tooling. It will also make the airline nimbler, enabling American to more easily move aircraft to respond to demand. Raja said the carrier will also lean on partnerships, including its renewed relationship with Alaska Airlines, so that it can offer certain routes to customers at a lower cost. The carrier reported a $2.2 billion net loss in the first quarter, compared with a net profit of $185 million during the first quarter of 2019.