American Airlines Group Inc (AAL) announced on Thursday that it intended to cancel flights to 15 airports across the United States in October amid weak demand for air travel.
Starting on October 7th, the air carrier will suspend flights to:
– Williamsport, Pennsylvania
– Stillwater, Oklahoma
– Springfield, Illinois
– Sioux City, Iowa
– Roswell, New Mexico
– New Windsor, New York
– New Haven, Connecticut
– Lake Charles, Louisiana
– Kalamazoo-Battle Creek, Michigan
– Joplin, Missouri
– Huntington, West Virginia
– Greenville, North Carolina
– Florence, South Carolina
– Dubuque, Iowa
– Del Rio, Texas.
A bit over 700 flights to and from those airports are to be suspended, while the company also warned of additional flight cuts.
“This is the first step as American continues to evaluate its network and plans for additional schedule changes in the coming weeks,” the air carrier said in a statement.
American Airlines shares closed lower for the seventh time in the past ten trading sessions on NASDAQ on Thursday. It has also been the steepest single-session loss since August 17th. The stock went down 1.42% ($0.18) to $12.50, after touching an intraday low at $12.26, or a price level not seen since August 5th ($11.55).
Shares of American Airlines Group have retreated 56.45% so far in 2020 compared with a 4.79% gain for the benchmark index, S&P 500 (SPX).
In 2019, American Airlines’ stock went down 10.68%, thus, it again underperformed the S&P 500, which registered a 28.88% gain.
The debate regarding airline aid has stalled, since congressional Democrats and White House officials have not yet managed to agree on a broader COVID-19 aid package. There are opinions that a deal will probably not be reached until September.
Policy makers have been debating for weeks whether US air carriers should be granted additional $25 billion in payroll assistance, which would preserve tens of thousands of airline jobs for another six months.
Analyst stock price forecast and recommendation
According to CNN Money, the 16 analysts, offering 12-month forecasts regarding American Airlines Group’s stock price, have a median target of $10.50, with a high estimate of $27.00 and a low estimate of $1.00. The median estimate represents a 15.93% downside compared to the closing price of $12.50 on August 20th.
The same media also reported that at least 8 out of 20 surveyed investment analysts had rated American Airlines Group’s stock as “Hold”, while 3 – as “Buy”. On the other hand, 7 analysts had recommended selling the stock.