American Airlines To Cut 700 October Flights Amid CARES Act Cash Uncertainty

American Airlines, which has received around $5.8 billion in payroll support, said it could make deeper schedule cuts if Congress isn't able to CARES Act funding past September 30.
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American Airlines  (AAL) - Get Report said Thursday that will suspend flights to 15 U.S. cities in early October amid questions over the fate of fresh stimulus from lawmakers in Washington and slumping consumer demand.

The biggest U.S. carrier said the move, which is slated to begin on October 7, will impact 700 flights from 15 airports smaller-sized airports, but could expand the capacity cuts if Congress isn't able to provide further financial support following the $25 billion in payroll assistance granted earlier this year as parts of the Coronavirus Aid, Relief and Economic Security (CARES) Act. to maintain a minimum level of service until September 30.

New Haven, Connecticut, New Windsor, New York and Springfield, Illinois are among the 15 cities that will faced reduced service, American Airlines said.

"This is the first step as American continues to evaluate its network and plans for additional schedule changes in the coming weeks," American Airlines said in a statement. "The airline will continue to re-assess plans for these and other markets as an extension of the Payroll Support Program remains under deliberation. The full, updated October schedule will be released Aug. 29, and American anticipates releasing its updated November schedule by late-September."

American Airlines shares were marked 1.75% lower in early trading Thursday to change hands at $12.42 each. Rival Delta Air Lines  (DAL) - Get Report slipped 1.5% to $27.26 each while United Airlines  (UAL) - Get Report traded 2.74% lower at $33.50 each.

“It is crucial that leaders in Washington return to the negotiating table immediately and continue the important work they started," said Tori Emerson Barnes, executive vice president for public affairs at the U.S. Travel Association. 

"Since March, more than half of the 15.8 million pre-pandemic jobs supported by the travel industry have disappeared, leaving workers and small businesses in every pocket of America vulnerable to the economic pain of this public health crisis," she added.

“Travel industry businesses and workers cannot wait until September or until after the election, Barnes urged. 'Congress must come together immediately to pass meaningful legislation to provide relief, protection and stimulus to all segments of the travel industry.”