Today American announced that it will cut thousands of jobs, retired additional aircraft ahead of schedule, and charge passengers a per-bag checking fee. It also said that domestic capacity would be reduced by 11-12% for the fourth quarter.
American reported a decrease of 2.0% in its load factor and a decrease of 6.6% in actual seat-miles flown for April (year over year). This falling of demand is killing the company as fixed costs continue to soar.
American Airlines was forced to cancel over 3,000 flights during a one week period in order to comply with Federal Aviation Administration (FAA) demands for safety inspections on the airline's MD-80 aircraft. The canceled flights meant reduced revenue and decreased satisfaction among American passengers, which placed negative pressure on the stock price.
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