American Gets $2.9 Billion In Financing, Adjusts Route Network
American Airlines, blaming the one-two punch of record oil prices followed by deep recession, announced two major initiatives -- $2.9 billion in new financing and network adjustments of eliminating unprofitable routes and allocating those planes to its four major hubs an Los Angeles, starting next summer.
Its four hubs are Chicago, Miami, Dallas/Fort Worth and JFK. Chicago will see the biggest growth, with over 50 daily flights. Chicago will get 12 new cities in the U.S. and three new international destinations. American is making Chicago a major gateway to Asia; service to Beijing will launch in the spring.
Other new AA destinations will include Honolulu, Anchorage and Vancouver. American Eagle will also offer new service to a number of cities, and customer service will be enhanced as Eagle deploys most of its 25 CRJ-700 aircraft –which will be reconfigured to offer a competitive First Class cabin- in the Chicago market.
Eagle has also signed a letter of intent with Bombardier to exercise options for the purchase of 22 additional CRJ-700s for delivery beginning in the middle of 2010. These new planes will complement the 126 aircraft (84 737s and 42 787s) American has ordered from Boeing. The new CRJs will be fully financed, with no impact on American’s cash balance.
In Miami, American and Eagle together will add 23 daily flights. Including changes that will take place by the end of 2009, Miami will serve four new domestic and three new international destinations. At DFW, overall capacity will increase modestly as 17 new daily departures at AA offset some Eagle CRJ flying that is being shifted to Chicago. Service to San Salvador will be reinstated after a two-year hiatus.
In New York, JFK service will grow by seven flights a day and include six new destinations, three domestic and three international (Madrid; Manchester, U.K.; and San Jose, Costa Rica). Two daily flights will also be added at LaGuardia Airport. In Los Angeles, American and Eagle will add two daily flights. The growth at the American hubs and Los Angeles will be offset by reductions in St. Louis and Raleigh/Durham.
