Business

American Airlines to cut nine daily flights at RDU

Posted September 17, 2009 8:32 a.m. EDT
Updated September 17, 2009 11:11 a.m. EDT

— The parent of American Airlines said Thursday it has obtained $2.9 billion in new financing and is making changes in its flight schedule to help cope with weak demand and declining revenue in the airline industry.

The cuts include reduction of nine flights at Raleigh Durham International Airport. Details about how many workers will be affected are still to be determined, American said.

The changes at RDU all affect American Eagle flights, according to RDU spokesperson Mindy Hamlin.

Destinations cut include:

Hartford, Conn., serviced by three flights

St. Louis, three flights

Columbus, Ohio, one flight

Additionally, two daily flights to Boston are being cut, Hamlin said.

The changes will take effect in April and June, Hamlin added.

As of Thursday, RDU offers flights to 193 destinations.

“This is a common practice during tough economic times when passenger travel declines,” Hamlin said of the American Eagle reductions. “We have experienced this before. Often what happens is that other airlines will begin to look at the markets that are no longer being served from RDU. Where there is strong demand, other airlines often step in to offer service to those markets if they are in a position to do so. As always, we will continue to communicate with airlines about opportunities for service here.

“The important point is that RDU serves a strong, resilient market that is attractive to airlines,” she added. “Airlines at RDU continue to offer service to our travelers’ most popular destinations, and we will continue to communicate with them about opportunities here so when the economy.”

American and regional carrier American Eagle currently service 12 destinations out of RDU with 53 flights, including non-stop service to the U.K. by American.

"In Raleigh/Durham, service to three destinations will be discontinued and a total of nine departures will be eliminated. Raleigh/Durham will continue to provide service to eight destinations with 44 departures per day," American said in a statement.

AMR Corp. (NYSE: AMR) said it has obtained $2.9 billion in extra funding, including $1 billion in cash from an advance sale of frequent flyer miles to Citigroup.

The Fort Worth, Texas, company says it received $1.6 billion in sale-leaseback financing commitments from GE Capital Aviation Services, a unit of General Electric Co., and $280 million in cash in a loan from GE Capital Aviation Services secured by aircraft.

Of the $1.3 billion in new liquidity, all but $55 million will be included in the third quarter 2009 cash and short-term investment balance.

AMR says it will strengthen its flight network by increasing capacity at hubs in Dallas/Fort Worth, Chicago, Miami and New York. Those cities, and Los Angeles, are key parts of the company's plan to benefit from closer cooperation with British Airways, Iberia and other partners.

The company also said it will reduce operations at St. Louis.

American Eagle also announced plans to add a first class cabin to its fleet of 25 Bombardier CRJ700 regional jets and it signed a letter of intent with Bombardier Inc. for options to purchase 22 additional CRJ700 aircraft for delivery beginning in mid-2010.

The new CRJ700 aircraft will be fully financed.

"Today's announcement positions our company well to face today's industry challenges and allows us to remain focused on the future and on returning to profitability," said Gerard Arpey, chairman and CEO.

AMR said its capacity for 2010 is expected to increase by about 1 percent over this year, with domestic capacity flat and international capacity up about 2.5 percent.

Excluding the impact of cancellations this year from the H1N1 virus and the launch of Chicago-Beijing service in 2010 that was delayed from this year, mainline capacity in 2010 is expected to be roughly flat compared with 2009, the company said.

Employees affected by cutbacks will be allowed to relocate, the company said, although it expects the impact on employees to be minimal.

AMR will add 57 daily flights at O'Hare International Airport in Chicago, six new destinations from JFK International Airport in New York, two new daily American and Eagle flights at Los Angeles and 19 daily departures added to the airline's largest hub at Dallas/Forth Worth.

American and Eagle also will add 23 flights at Miami.

AMR shares rose $1.67, or 22.3 percent, to $9.02 in premarket trading.